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The GVH’s tips on the Public Procurement Authority’s “Daily public procurement” mobile application

The promotion of fair competition in public procurement procedures is considered a public interest. Consequently, repulsing public procurement cartels is a primary goal of both the Gazdasági Versenyhivatal (GVH - Hungarian Competition Authority) and the Közbeszerzési Hatóság (KH - Public Procurement Authority). Currently, the GVH raises the awareness of potential tenderers and awarding contracting authorities of the risks of cartels and provides guidance on how such cartels should be dealt with via its daily tips”, which are available on the Daily public procurement” application of the KH.

The “Daily public procurement” application is the KH’s news channel, which provides daily updates for those who are interested in public procurement. Since its launch on 9 May 2017 more than 4000 users have downloaded the application, which can be downloaded free of charge both on Android and iOS devices.

In the “Daily-tip” menu point the GVH will be providing tips on a weekly basis for the next year. The short pieces of practical advice for contracting authorities and tenderers will be based on the two descriptive booklets of the GVH, which are also available in the menu point of “Daily good practice”. A push notification message is sent to the subscribers of the Daily-tip heading when a new tip is published.

The first tip of the GVH also conveys the basic message of the whole series:

Tip for contracting authorities: Public procurement cartels are also harmful to you!

Public procurement cartels increase the prices of the projects to be carried out and worsen the quality of them. In the absence of a cartel you can get more and better quality for the same amount of money.

Fight against the cartels!

For further details, see the brochure entitled “Public procurement suspected of cartel activities?’’ issued by the competition authority for contracting authorities.

The above-mentioned descriptive booklet entitled “Public procurement suspected of cartel activities?” helps the contracting authorities to recognise cartels and to support the GVH's investigations, as well assists awarding contracting authorities to create an unfavourable tendering environment for cartels. The- How to stay clean?” titled booklet helps small and medium sized tendering enterprises to avoid engaging in cartel behaviour in public procurements.

The mentioned booklets and tips of the GVH are aimed at developing competition culture in connection with cartels. The GVH launched a communication campaign against cartels with the slogan It cannot be kept secret”in 2015 and also created a microsite to enhance the education’s efficiency. As part of this campaign it also introduced an innovative contact option, known as the CartelChat.

Making the GVH tips and two of its booklets available on the KH’s mobile phone application is one of the forward-looking examples of cooperation between the two authorities. The KH also wants to provide other authorities with an opportunity to publish valuable content through its “Daily public procurement” news channel supporting the public procurement profession, however, it must be emphasised that this opportunity can only be taken advantage of after prior agreement has been obtained from the KH.

Budapest, 3 January 2018

The Hungarian Competition Authority

The Public Procurement Authority

Andrea BASA, Spokesperson

dr.Barcsa Tímea, Head of the Cabinet Office

H-1054 Budapest, Alkotmány u. 5.

1026 Budapest, Riadó u. 5.

(+36-1) 472-8902, +3630 618-6618

(+36-1) 882-8501, +3630 944-3847

,

barcsa.timea

www.gvh.hu

www.kozbeszerzes.hu

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Vodafone received a significant reduction of its fine amounting to several hundred million HUF due to its various compliance actions

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) significantly reduced the fine imposed on Vodafone Magyarország Mobil Távközlési Zrt. (Vodafone), because the telecom association showed an extraordinary level of compliance and it also proved that it had taken explicit steps to change its behaviour. The amount of the fine imposed on the undertaking (approximately 200,000,000 HUF) is therefore less than half of the amount that would have otherwise been imposed on the basis of the Notice on Fines, taking into consideration the fact that the GVH has previously condemned Vodafone on several occasions for implementing unfair commercial practices and it is therefore regarded as a repeat offender.

The GVH investigated whether Vodafone had communicated to consumers genuine figures about the price of its phones when in its commercial campaigns promoting its offers to its consumers, published from October 2013, it did not showcase the excess monthly fee which was to be paid in addition to the discount price of the devices (1 – 19,999 HUF) during the commitment period.

According to the decision of the GVH, Vodafone provided misleading information about the real price of the devices in its commercials when it did not showcase the monthly (extra) fee, which in fact had to be paid and which meant that even during the commitment period after purchasing the phones consumers were burdened with extra costs in addition to the so-called unit price which was advertised as the basic service. This may have given the average consumer the false impression that – even though only when committing to a loyalty period – they were being offered a particularly favourable price, and they may have falsely believed that only the highlighted part of the price had to be paid in relation to the device (beyond the monthly base-fee, which is, however, related to the telecommunication service).

The GVH deemed the above-described type of communication unlawful. Despite the fact that Vodafone did not admit to the infringement, as a sign of its cooperation

  • it strengthened its compliance programme to an extent that went beyond the usual market practice;

  • it changed its commercial practice and eventually the sales construction of its devices as well; and

  • it offered the affected consumer group the possibility to freely cancel their fixed-term contracts, thus undertaking a significant financial burden.

The GVH regarded the above actions – especially the indemnification-like contract termination offer – as significant mitigating circumstances, and consequently it set the amount of the fine, which was calculated on the basis of the costs of the particular campaigns, at 200,000,000 HUF, taking into account other factors as well.

The GVH emphasised that it regards the potential compensation of wronged or disadvantaged consumers and undertakings, as well as the most effective utilisation of its resources, as primary aims of its competition supervision activities. It may facilitate the achievement of these goals through its fining practice by recognising, as mitigating circumstances, active reparations, compliance efforts and via an increased level of cooperation during proceedings.

The GVH will continue to prominently encourage the compensation of wronged consumers in its competition supervision proceedings.

Case number: Vj/12/2016.

Budapest, 22 December 2017

Hungarian Competition Authority

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-890
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

Further information:
GVH Customer Service
Tel: (+36-1) 472-8851
Email: http://www.gvh.hu

 

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The Hungarian Competition Authority has shut down the www.orangeways.com website

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) has prohibited the continuation of a commercial practice relating to passenger transport on the www.orangeways.com website in the framework of interim measures and at the same time has obliged the undertakings pursuing the commercial practice in question under the brand name of orangeways to delete the related content from their website.

The GVH has initiated a competition supervision procedure against the concerned undertakings due to their commercial practice under the brand name of orangeways, as it is strongly assumed that the undertakings have been engaged, and continue to be engaged, in unfair commercial practices against consumers. According to the available data, the undertakings among others have not acquired the necessary permissions required by sectoral legislations for their conduct. The undertakings under investigation conduct their commercial practice primarily through the www.orangeways.com website, and it is via this website that consumers can book seats on various bus services and buy their tickets.

In the course of the competition supervision procedure, the GVH established that the conditions for ordering interim measure were met. This means that:

  • based on the consumer complaints and on the basis of legally binding measures taken by various authorities it can be reasonably assumed that the commercial practice is unlawful;

  • the interim measure is justified in order to prevent further infringements of consumers’ interests;

  • the continuation of the commercial practice would jeopardise the economic competition and

  • it can be found that the measure is urgent and there is no other way in which further financial losses for consumers could be efficiently prevented.

Case number: Vj/100/2016.

Budapest, 21 December 2017

Hungarian Competition Authority

 

Information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: (+36-1) 472-8902
Mobile: +36 30 6186618
Email:
press@gvh.hu
http://www.gvh.hu

Further information:
GVH Customer Service
Tel: (+36-1) 472-8851
Email:
http://www.gvh.hu

 

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The GVH’s first case concerning an influencer is closed by the acceptance of commitments

The Hungarian Competition Authority (GVH) has accepted the commitments offered by GoldenEye Kreatív Kft and Magyar Telekom Nyrt. (Telekom), according to which the communication practice of the influencer, and the contracting practice relating to marketing cooperation with influencers have changed. Additionally, the commitments also include communication activities with educational purposes. The GVH did not establish an infringement in the case and therefore did not impose a fine. According the GVH, beside the targeted circle of consumers, the commitments are also capable of reaching and guiding advertisers, business partners, and other influencers.

The GVH investigated whether the contents and posts which had been appearing on the Facebook page of Kasza Tibor from the 1st of August 2016 promoting Telekom products, services, and the brand in general, could be regarded as unfair commercial practices, given the fact that Telekom paid for these contents. However, in the case of certain posts it was presumed that this fact was not obvious to the consumers reading the posts.

As regards to promotion through the use of influencers on social media, in general the GVH established that

  • consumers widely follow popular well-known persons, influencers, bloggers, vloggers, youtubers etc. on social media for the purposes of entertainment and obtaining information;

  • the business practices carried by the contribution of influencers, influencers and also the order and support of those are becoming increasingly popular among market participants and advertisers;

  • it cannot be qualified as an independent opinion or neutral content if the publisher of the post has an economic interest in the publication, irrespective of whether this interest is a paid sum, framework contract, gift product or service, dividend, premium or any other form of income etc.;

given that social media posts take many different styles/forms, contain different contents, and may be paid or supported in a variety of different manners, non-independent contents often appear in such a way that there is no, or no obvious reference to the fact that they are of a commercial nature.

The GVH was of the opinion that while a number of competition supervision procedures could be launched on different markets, that given its stance in these types of cases, the public interest could be protected more efficiently – at least in the short term – through the acceptance of commitments which would provide guidance for different market participants. The GVH also took into account international recommendations and guidance, but also taking into account differences relating to language and consumer habits, it found that the fact of the accepted commitments could act as an efficient and effective warning for the market participants.

The undertakings also have to follow mutatis mutandis the advertising and other regulations and prescriptions of the used platform, which – according to the currently available information – are not contrary with the expectations formulated by the GVH; however, these regulations serve not only consumers but also the rational economic interests of the given platform.

Although with regard to the commitments the GVH did not qualify the posts investigated in the given case, a paid content which appears among the posts of an individual (regardless as to whether this person is a public figure, influencer, underage youtuber, blogger, vlogger) can be considered as lawful if

  •  it appears simply, unequivocally, in an understandable way, furthermore
  • it is clearly pointed out to consumers that it is not an independent neutral opinion or recommendation as there is a reward or other direct economic interest behind it. This includes such cases where

 o    the maintainer of the page receives some kind of benefit, present or service for the post, in return for the recommendation, or where

 o    someone promotes his/her own undertaking or the product of his/her own undertaking (but this relation is not evident from the commercial practice and it is also not well known).

Moreover, it is important to note that in cases where there is no obvious sign that the posts of influencers and other private person with a significant number of followers contain a promotion, not only the editor of the given page may be held responsible, but also the advertiser and the undertaking which contributes to the publishing and formation of the post.

Case number: Vj/110/2016.

In connection with the present case, the GVH has published a guideline entitled #GVH#Megfeleles#Velemenyvezer, which is available here on its website.

Budapest, 21 November 2017

Hungarian Competition Authority

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

Further information:
GVH Customer Service

Tel: (+36-1) 472-8851
Email:
http://www.gvh.hu



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The GVH exercises its new power for the first time to investigate the acquisition of the cable network in Oroszlány

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) initiated a competition supervision proceeding against DIGI Távközlési és Szolgáltató Kft. for the first time to investigate a concentration meeting the enforcement threshold of HUF 5 billion and not having been notified to the GVH.

Pursuant to the Hungarian Competition Act, in the case of a concentration of undertakings the authorisation of the GVH must be sought in cases where the aggregate net turnover of all the undertakings concerned exceeds HUF 15 billion and the net turnover of each of at least two of the groups of undertakings concerned exceeds HUF 1 billion. In addition, according to the rules applicable from 15 January 2017, the GVH is empowered to investigate smaller concentrations in a separate competition supervision procedure where the aggregate turnover of the participating undertakings concerned exceeds HUF 5 billion and the possibility of a significant decrease in competition on the relevant market cannot be excluded. Such transactions can be investigated by the GVH within 6 months after their realisation.  The GVH has not launched such an investigation ex officio since the entering into force of the new rules.

In August 2017 DIGI Távközlési és Szolgáltató Kft. took over in twenty municipalities the communication system and the related portfolios of subscribers and contracts of Greencom Kft. within the framework of a transaction which qualifies as a concentration. In order to investigate this concentration the GVH launched a competition supervision transaction under the case number Vj/49/2017, as the concentration reached the threshold of HUF 5 billion subject to authorisation and in the case of one municipality (Oroszlány) the possibility of a significant decrease in competition arose. The GVH deliberated the necessity of initiating the procedure after receiving a complaint from a private person.

The initiation of the competition supervision procedure does not mean that the concentration will in fact lead to harmful effects that necessitate intervention; furthermore, in such cases the realisation of such a transaction without prior notification does not qualify as a violation of the stand still obligation. The procedure intends to clarify the facts in order to allow possible competition effects to be assessed and evaluated. In accordance with the applicable law the GVH has to close the procedure within four months.

Case number: Vj/49/2017

Budapest, 8 November 2017

 Hungarian Competition Authority

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

 

 

Further information:
GVH Customer Service

Tel: (+36-1) 472-8851
Email:
http://www.gvh.hu



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