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The GVH terminated the competition supervision procedure against M-RTL

Based on a market signal and information in the public domain, the GVH noticed that Magyar RTL Televízió Zrt. (M-RTL), a significant participant of the nationwide television advertisement market, had been selling advertisers RTL Klub and RTL3 (Cool, Film+ and RTL II) channels in a package at a so-called bundled price (SAP+) since 2015; moreover it only offered more favourable terms if the advertisers undertook to advertise a certain percentage of their whole advertising on the RTL channel. These behaviours of M-RTL, through which it had presumably abused its dominant position, were likely to distort competition on the nationwide television advertisement market.

Similar concerns had previously arisen in procedure Number Vj/66/2011 relating to the merger of M-RTL and IKO Televisions Kft. In its resolution made on 19 December 2011, the GVH cleared M-RTL’s acquisition of control over IKO Televisions Kft. by accepting commitments that M-RTL would sell advertising space of the above-mentioned channels separately. According to the GVH’s decision the two-year period given for the realisation of the commitments (until the end of 2013) would ensure that there was enough time for market participants to adequately prepare for the changes resulting from the increase of M-RTL group’s portfolio, by for instance, certain channels cooperate to sell advertising space. According to the GVH, the two-year period would allow certain channels to become stronger on the advertising market, thereby resulting in competitive pressure for the group of undertakings established due to the above-mentioned merger.

After the closure of the 2014 business year and the closure of the ongoing contractual negotiations, the GVH was able to measure the potential effects of M-RTL’s behaviour. On 15 June 2015, the GVH initiated the competition supervision procedure Number Vj/49/2015 due to a presumed infringement of an abuse of a dominant position.

Since the initiation of the procedure there has been a restructuring of the market, due primarily to an increase in the portfolio of the Atmedia Kft. channel achieved in 2016. As a consequence of these changing market circumstances, the presumed dominant position of M-RTL could not be established and the GVH therefore terminated the procedure Number Vj/49/2015 by its resolution made on 20 June 2016.

Case number: Vj/49/2015.

Budapest, 15 July 2016

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: basa.andrea@gvh.hu , press@gvh.hu
http://www.gvh.hu

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Significant reduction in drop-off and parking fees - Budapest Airport offered commitments

The Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH) has accepted the commitments of Budapest Airport Budapest Liszt Ferenc Nemzetközi Repülőtér Üzemeltető Zrt. (Budapest Airport Zrt.) according to which it undertakes to reduce both drop-off fees and short-stay fees, and to change the rebates of its bonus card (Bónuszkártya). The reduced fees and rebates will be available till 31 December 2019, thereby ensuring the maintenance of the current efficient competition on the market of long-stay parking. The GVH did not establish an infringement and therefore did not impose a fine.

The GVH examined that the prices and conditions set and applied by Budapest Airport for drop-offs and short and long term stays at the airport were capable of eliminating undertakings providing parking and transfer services in the area of the airport from the relevant market.

On the basis of the commitments, the GVH obliged Budapest Airport to

· reduce the price charged for using the Terminal and Premium parking lots for the first five minutes after driving in for the third time in a day and for all subsequent visits on the same day: to HUF 300 (approximately EUR 1) for use of the Terminal parking lot and to HUF 400 for use of the Premium parking lot;

  • provide rebates for Bónuszkártya owners in the form of a 15% discount when using the Terminal parking lot and a 20% discount when using the Premium parking lot; in other words, the Terminal parking lot bonus card offers HUF 60,000 to spend in return for paying HUF 50,000 and the Premium parking lot bonus card offers HUF 28,750 to spend in return for paying HUF 25,000;
  • increase the maximum limit of Bónuszkártya to HUF 325,000;
  • make it possible for undertakings which offer parking services within a 15 km radius of bus parking spots on the arrival level of the airport to rent parking spots for a maximum 2 hours per occasion, with no limit on the amount of times a vehicle can drive in per day. If applying for all three parking cards, the monthly price per spot will be HUF 150,000 (+VAT) in case of the Premium parking lot, HUF 225,000 (+VAT) in case of Terminal parking lot and HUF 300,000 (+VAT) in case of using both parking lots.

These reduced fees and rebates will be unchanged and available till 31 December 2019.

After assessing the statement containing the commitments, the GVH established that the public interest could be efficiently protected via the acceptance of the the commitments because

  • the additional costs resulting from the increase of of prices on 10 December 2013 which are borne by undertakings providing long-stay parking services may decrease as a consequence of the commitments, thereby ensuring continued efficient competition;
  • establishing the alleged infringement would result in delays and further procedural costs that would be difficult to estimate;
  • the commitments comply with verifiability requirements.

During the assessment of a commitment application the main goal of the GVH is to ensure that the public interest is efficiently protected. Through the acceptance of commitments, undertakings are more efficiently able to align their conduct with the applicable competition law; furthermore, such decisions provide guidance for other market participants. When making its decision the GVH assesses the circumstances for and against accepting the commitments, taking into consideration the characteristics of the relevant market.

Case number: Vj/43/2014.

Budapest, 28 June 2016

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: basa.andrea@gvh.hu , press@gvh.hu
http://www.gvh.hu

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Current issues of competition law – joint conference of the GVH and the Hungarian Competition Law Association

Over the last 25 years competition law has evolved and become a complex field of law in Hungary. From time to time, the application of, and compliance with, competition law raise a number of questions. In the First Hungarian Competition Law Forum, the most prominent experts in this field shared their views on the recent issues arising in the area of competition law.

At the first of what was intended to mark the beginning of a new tradition of such conferences, Miklós Juhász, the President of the Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH) highlighted in his opening speech that the GVH is as interested as the market participants themselves in creating an environment where law-abiding behaviour ensures fair competition; furthermore he emphasised that this endeavour would be supported by the competition authority in accordance with the law. He stated that in order to achieve the above-mentioned goals and to create a more client-friendly operation at the GVH, the latter has initiated competition law amendments, continuously supervised its notices and guidance and facilitated a wider dissemination and greater understanding of competition law rules among both the business community and the general public.

In his speech, Zoltán Hegymegi-Barakonyi, the President of the Hungarian Competition Law Association emphasised the importance of the development of a culture of competition: he considers the further improvement of the compliance of small and medium-sized enterprises as the most difficult challenge. Through the introduction of international practice, he presented that compliance programmes which are more simple but similar to the ones of bigger competitors are needed for assuring the compliance of small-sized undertakings with few resources.

The introductory presentation of the conference by Pál Csiszár, director of the Directorate-General of the European Commission dealt with the current practice relating to merger control on oligopolistic markets.

Further topics of the conference concerned the significant recent developments. The guest of honour of the Competition Law Forum was the Emeritus Professor Richard Whish, an esteemed legal academic at King’s College London. Along with a member of the Competition Council and other prominent lawyers, he took part in the panel tasked with discussing exchange of information cases. The same panel discussed the liability questions arising in regards to the undertakings participating in a cartel. Through the use of practical examples, the panel members presented the types of information and data, which although prohibited by competition law, tend to be exchanged in merger takeovers and in horizontal and vertical agreements. They also touched upon liability issues in relation to cartel members acting as contributors or helpers in cases involving fundamental rights, taking into account the decisions of the Hungarian (concrete cartel, pharma cartel) and other EU Member States’ competition law authorities.

With the participation of András György Kovács, the President of the chamber of the Curia and András Tóth, the head of the Competition Council the following panel discussed the recent developments relating to the judicial review of administrative decisions. Krisztina Rozsnyai, the Ministerial Commissioner of the Ministry of Justice offered an insight into the background of the amendments of the Act on Administrative Procedures (Ket).

The afternoon panel discussed recent developments in the area of private enforcement from the perspectives of the legislative, the administrative and the judicial branches, the perspective of legal representatives, and the transposition of the Directive on Antitrust Damages Actions into Hungarian law. The conference concluded with the corporate community, the Hungarian Competition Authority and the Hungarian Competition Law Association sharing their perspectives.

During the conference’s breaks participants were able to view the exhibition of the legal history research that was commissioned by the GVH on Act XX of 1931, which contained the early competition law rules and institutional design.

The presentations of the First Hungarian Competition law Forum are available on the website of the GVH.

Budapest, 14 June 2016

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: basa.andrea@gvh.hu , press@gvh.hu
http://www.gvh.hu

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The GVH continues to monitor the hotel booking market after closing its sectoral inquiry

The Hungarian Competition Authority (Gazdasági Versenyhivatal, GVH) prepared its report on its sectoral inquiry on the online accommodation booking market. Due to the positive changes that took place on the market during the sectoral inquiry, the GVH does not foresee intervention this year. However, as a member of the Monitoring Working Group in the framework of the European Competition Network it continues to monitor market developments.

In the summer of 2013 the GVH launched a sectoral inquiry into the hotel online booking market due to the identification of phenomena in the contracting practices of the online intermediaries which indicated that the competition between online travel agencies (OTAs)/online booking portals offering the same hotel rooms was restricted.

The sectoral inquiry focused on the so-called ‘price parity clause’ which could be found in the agreements of both international and large domestic OTAs. Pursuant to such a clause a hotel binds itself not to offer its rooms for prices that are lower than those given to the website of the OTA on other distribution channels.

According to the online intermediaries the use of parity clauses served the protection of their investments. Considering that a significant part of the services provided in the course of the hotel intermediary activity (search, comparison, views of pictures and ratings) is free of charge and available also prior to the booking, the investments of the intermediaries in the supporting IT systems might easily be abused (free-riding).

Pursuant to the conclusions of the sectoral inquiry, the benefit of the price parity was seen in the form of a reduction of the searching costs (searching time) of consumers. In contrast, price parity had a negative effect on hotels, as they would only be able to make larger profits if they could apply favourable prices on their own distribution channels and on platforms applying lower commission rates.

In order to better understand the consumer side of the market the GVH also commissioned market research. The aim of the research was to gain insight into the preferences of consumers in Hungary in relation to travelling, specifically concerning the gravity and role of intermediary portals and consumers’ behaviour when using hotel booking portals.

The GVH found that through the appearance of OTAs, the market had become more transparent as several accommodation offers could be compared even on the website of just a single OTA. This transparency led to an increase in price competition among hotels and in capacity utilisation of the hotels; however, there was no substantive price competition among the OTAs on the market and the prices of accommodations were roughly the same in all sales channels in the first half of the period affected by the sectoral inquiry.

The position of the GVH is in line with the conclusions of international procedures on the topic, according to which the wide parity clauses (i.e. comprising all sales channels) may restrict competition by standardising market prices and increasing barriers to entry. It may give raise to particular competition concerns with regard to the market concentration in Hungary. The application of wide parity clauses does not result in efficiency benefits to such a nature and to the extent and does not enhance consumer welfare to a degree that could justify the total restriction of competition among the single sales channels.

In 2015 the larger international OTAs (Booking.com, Expedia) narrowed the applicability of the price parity clause on the Hungarian market, too. As a consequence, OTAs will only stipulate in the future that the hotels shall not offer less favourable conditions to intermediaries than what they publish on their own websites. Furthermore, the parity clause will not apply to other intermediaries and to other booking channels (telephone, fax, e-mail, etc.), which means that hotels will be able to provide discounts.

In the opinion of the GVH, also taking into consideration the danger of the free-rider phenomenon, the use of a narrow parity clause may be the correct solution to the current market issues. A narrow parity clause may pave the way for accommodation providers (hotels) to be able to freely apply different price policies via certain sales channels. On the other hand, OTAs may announce special promotional periods at the expense of their commission rates and may also compete on prices.

After the draft report of the sectoral inquiry was released, the largest Hungarian-owned market player of the Hungarian online booking market, Szallas.hu, indicated to the GVH that it plans to switch to the application of a narrow parity clause, thus following the international market players. Consequently, in practice all larger market players will apply narrow parity clauses, which will hopefully also influence the conduct of players with smaller market shares. In light of these changes, the GVH does not foresee intervention in the market processes this year; however, it does not rule out intervening if market developments do not show a strengthening of competition.

The GVH – as a member of the Monitoring Working Group established in the framework of the European Competition Network (ECN) aimed at observing the changes on the online intermediaries market and the effect of the introduction of narrow parity clauses –will also monitor any further market developments in this respect subsequent to the termination of the sectoral inquiry.

The full report on the sectoral inquiry and further information are available on the website of the GVH.

Budapest, 8 June 2016

 

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: basa.andrea@gvh.hu , press@gvh.hu
http://www.gvh.hu

 

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Fine imposed by the GVH concerning public procurements

According to the decision of the GVH, Finella Investment Kft. (the successor of HTD Szaknévsor Kiadó Kft.), JRM Produkció Kft., LIGA TV Kft. (LIGA TV), “PUPU Produkció” Filmgyártó Kft., and Nosztalgia-Design Kft. concerted their practices with the object of restricting competition in two public procurements launched by Médiaszolgáltatás-támogató és Vagyonkezelő Alap (Media Service Support and Asset Management Fund – MTVA). The GVH imposed a total fine of HUF 81,970,500 (approx. EUR 262,000) on the undertakings for the infringement.

On 2 November 2013, MTVA issued a call for tenders and subsequently conducted two open public procurement procedures under EU procedural rules, one concerning a ‘Framework Agreement on the rental of a HD television mobile broadcasting unit for the Media Service Support and Asset Management Fund for a period of 24 months with the occasional provision of human resources’ and one relating to a ‘Framework Agreement on the rental of a SD television mobile broadcasting unit for the Media Service Support and Asset Management Fund for a period of 24 months with the occasional provision of human resources’. The subject matter of the tenders concerned the rental of mobile broadcasting vehicles applying SD and HD technology. These broadcasting vehicles are used for local broadcasting in sport, cultural (concerts, theatre plays) and other events.

As regards to MTVA’s 2013 framework agreements, it was established by the GVH that LIGA TV had initiated the coordination that took place in relation to the bids submitted by the above-mentioned undertakings with respect to their form and content. The undertakings concerted their practices (i.e., decided to take part in the tender, drafted, submitted their bids and later completed any missing elements of the bid) in favour of LIGA TV, which would have been a subcontractor of all the other participants of the tenders of MTVA. The undertakings aimed to exclude competitors from the second round of the tenders, in which only the first four placed undertakings from the first round of each of the tenders would be able to participate. They intended to win the first four places in the first round. As a result, LIGA TV could have won contracts to execute the tasks defined by the framework agreements.

During the unannounced inspections at the premises of the undertakings, the GVH seized many pieces of evidence supporting the finding of an infringement, which included, among other things, the notes of the executive director of LIGA TV as a primary piece of evidence of the restrictive practice.

When establishing the basic amount of the fine, the GVH took into account three times the value of the tenders as the amount of the relevant turnover, and then it assessed the aggravating and mitigating circumstances.

When defining the amount of the fine, the GVH took into account – among other things, – the following factors:

  • coordination on the prices of bids in public procurement procedures amounts to one of the most severe competition law infringements with respect to not only the interests of the contracting authority but also society’s interests which are supposed to be realised by the public procurement;

  • the framework agreements were not implemented in the end and consequently did not have an actual effect on the market.

The GVH considered that LIGA TV played an active role as an instigator and organiser when conducting and coordinating infringing behaviours.

According to the decision of the GVH, it amounts to a severe restriction of competition, if in the first (qualification) round of a two-round public procurement procedure, a market participant undertakes to operate as a subcontractor to an extent of no more than 25% for tenderer undertakings which were previously not part of the market, but which could be personally linked by their directors to the subcontractor, and by this behaviour the subcontractor aims to exclude other market participants from the second (reopened tendering) round.

The GVH terminated the competition supervision proceeding against TVP Televíziós és videó műsorokat gyártó Kft.

Case number: Vj/11/2014.

Budapest, 9 May 2016

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: basa.andrea@gvh.hu , press@gvh.hu
http://www.gvh.hu

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