Concentrations cleared by the GVH

The Gazdasági Versenyhivatal (Hungarian Competition Authority – GVH) has authorised two, closely related concentrations. One of the concentrations involves certain Hungarian newspapers of Axel Springer SE and Ringier AG being sold to the Vienna Capital Partners group (VCP), while the second concentration involves other Hungarian newspapers of the two undertakings being placed under the jointly controlled Ringier Axel Springer Media AG.

As a consequence of the concentrations, some of the newspapers that are currently controlled by Ringier AG, Népszabadság, Nemzeti Sport and some of the magazines will come under the control of VCP. VCP will also become the publisher of 8 county dailies, Vasárnap Reggel, Világgazdaság and several magazines, which currently belong to the Axel Springer portfolio.

The Blikk newspaper group (Blikk, Vasárnapi Blikk, Blikk magazines), which is currently controlled by Ringier AG, and TV listings and more magazines among the Axel Springer SE controlled newspapers will come under the control of jointly controlled Ringier Axel Spriner Media AG.

No competition concerns were identified on an examination of the above-mentioned proposed concentrations. Furthermore, third parties contacted in the case did not raise any concerns on the merits stemming from the concentrations. Consequently, the GVH decided to clear both concentrations.

Case numbers: Vj-6/2014., Vj-7/2014.

Budapest, 25 July 2014.

Hungarian Competition Authority

Further information:
Katalin GONDOLOVICS
Gazdasági Versenyhivatal
Mail: 1054 Budapest, V. ker. Alkotmány u.5.
Postal address: 1245 Budapest, 5. Pf. 1036
Tel: (+36-1) 472-8902
Email:
http://www.gvh.hu

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Netrisk fined for deceptive advertising

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) in its decision imposed a 50 000 000 HUF (approx 170 000 EUR) fine on Netrisk.hu Első Online Biztosítási Alkusz Zrt. (Netrisk) for engaging in unfair market behaviour during its third party automobile insurance promotion campaign.

Between 1 and 30 November 2012, during the promotion of its third party automobile insurance services the undertaking claimed that the cost of changing insurance companies would be much higher the following year, but it did not provide any evidence to prove this statement. According to the GVH’s findings such a categorical statement about future prices cannot be made, as it can never be ruled out on a competitive market that a rival or a new undertaking on the market will offer prices which are below the prices of its competitors.

The undertaking also brought to consumers attention that “truly good offers” and “truly cheap third-party insurances” could be found on the Netrisk.hu webpage. In the GVH’s opinion both of these statements carried the message that Netrisk had better offers than its competitors. Consequently, these messages amounted to market primacy statements. The undertaking also failed to prove the grounds on which these statements were based. Netrisk stated in its advertisements that every insurance offer was available on its webpage but they were not even legally allowed to display all offers of the Hungarian insurance market. This means that their statement about the lowest prices was also not well founded as consumers may have obtained higher discounts by taking advantage of offers which were not available through Netrisk.

The GVH determined that during its third-party automobile insurance promotion campaign Netrisk.hu Első Online Biztosítási Alkusz Zrt. had misled consumers and therefore imposed a fine of 50 000 000 HUF (approx 170 000 EUR). During the determination of the amount of the fine the GVH regarded as aggravating factors that due to the intense promotion Netrisk reached a broad range of consumers, and that the undertaking had previously been sentenced for a similar infringement.

Case number: Vj-75/2013.

Budapest, 22 July 2014

Hungarian Competition Authority

Further information:
Katalin GONDOLOVICS
Spokeswoman
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postaddress: 1245 Budapest, 5. POB 1036
Tel: (+36-1) 472-8902
Email:
http://www.gvh.hu

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2.7 billion fine on several ready-mix concrete manufacturers in Budapest

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) in its decision on 30 June 2014 imposed a total fine of  2 790 200 000 HUF (9 300 000 EUR) on eight ready-mix concrete manufacturers in Budapest and on the Hungarian Concrete Association, because between 2005 and 2007 they, divided among them orders on ready-mix concrete exceeding the amount of 1000 m3 in the area of Budapest by a previously agreed quota , and they also fixed the price level of ready-mix concrete, thus engaging in a single, continuous and complex infringement.

Based upon the – mostly documentary – evidence at its disposal (charts, journal entries and other records made at meetings), the GVH established that in the time period between 2005 and 2007, Betonpartner Magyarország Kereskedelmi és Szolgáltató Kft., Cemex Hungária Építőanyagok Kft., DBK-Földgép Építési Kft., Duna-Dráva Cement Kft., Osteuropäische Zementbeteiligungs AG, Magyar Betonszövetség “v.a.”, STRABAG Építő Zrt., Frissbeton Betongyártó és Forgalmazó Kft., and LASSELSBERGER HUNGÁRIA Termelő és Kereskedelmi Kft. regularly held negotiations in order to share the market and maintain price levels.

In its proceeding the GVH investigated whether Betonpartner, Cemex, DBK, Frissbeton, Holcim, TBG, Lasselsberger and Strabag, also within the framework of the Hungarian Concrete Association, had held negotiations between 2005 and 2007 in order to maintain price levels and share the market. The investigation of the GVH also dealt with whether the undertakings under investigation had exchanged information in which they mutually agreed not to serve certain clients during the investigated time period.

Based on the evidence, it was established that the senior managers of the concerned undertakings met once a year (in Hungary or Austria), and the middle managers met several times a month (in the office of the Hungarian Concrete Association). The aim of the coordination was to retain the previously agreed upon price levels and “protected” customers, and to share the customers between each other based on the market shares of the undertakings.

The fines imposed on the individual ready-mix manufacturers were as follows:

  • Betonpartner Magyarország Kft. 185 400 000 HUF
  • Cemex Hungária Kft. 643 900 000 HUF
  • DBK-Földgép Kft. 192 000 000 HUF
  • Duna-Dráva Cement Kft. 465 800 000 HUF
  • Frissbeton Betongyártó és Forgalmazó Kft. 53 500 000 HUF
  • Osteuropäische Zementbeteiligungs AG 550 000 000 HUF
  • LASSELSBERGER HUNGÁRIA Kft. 270 200 000 HUF
  • STRABAG Építő Zrt. 428 400 000 HUF

The GVH imposed a symbolic fine of 1 000 000 HUF on the Hungarian Concrete Association, because its role in the uncovered infringement was restricted to administrative tasks related to the cartel.

The calculation of the fine was based upon the 1/2012 Notice of the President of the GVH and the President of the Competition Council, which states the conditions of the imposition of a fine. During the procedure the GVH considered as relevant turnover the net revenue from orders on ready-mix concrete exceeding the amount of 1000 m3 in the area of Budapest during the time of the infringement.

When establishing the amount of the fine, it was an aggravating circumstance that price fixing and market sharing are considered as amounting to a hard-core cartel, and also that the undertakings significantly restricted competition through their behaviour. The GVH took into account the combined market shares (regards the city of Budapest) of the undertakings involved in the ready-mix concrete market of Budapest during the investigated time period, and regarded it as an additional aggravating circumstance that the undertakings actually implemented the previously agreed upon price level of the ready-mix concrete.

Secretly implemented, so-called hard-core cartels constitute the most severe forms of competition restrictive agreements. These agreements concern the direct or indirect determination of buying or selling prices between competitors, market sharing (also collusion on tenders), or the determination of production or selling quotas, and therefore may not fall under exemption or be regarded as exceptions.

Moreover, the GVH regarded imputability as an aggravating circumstance, to which significant weight was placed, that the undertakings in question were obviously aware of the unlawful nature of their behaviour. This could be seen by the fact that the undertakings implemented enhanced safety measures in order to keep their meetings secret. As Strabag Építő Zrt. was a repeat offender; the GVH increased the base amount of the fine imposed on it by +200%.

Due to lack of evidence regarding the undertakings’ agreement not to serve non-paying customers from 2008, the GVH terminated the proceeding regarding this behaviour.

The work of the GVH was aided by an informant, who was awarded an informant reward of 27 902 000 HUF (93000 EUR), which is equal to one percent of the amount of the fine imposed on the undertakings involved in the proceeding. The identity of the informant will not be revealed by the GVH in any form.

Case number: Vj-29/2011.

Budapest, 8 July 2014.

Hungarian Competition Authority

Further information:
Katalin GONDOLOVICS
spokeswoman
Hungarian Competition Authority
Mail: 1054 Budapest, V. ker. Alkotmány u.5.
Postal address: 1245 Budapest, 5. POB 1036
Tel: (+36-1) 472-8902
Email:
http://www.gvh.hu

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The GVH commenced proceeding because of suspected cartel

On 3 July 2014 the Gazdasági Versenyhivatal (GVH – Hungarian Competition Authority) launched a competition supervision procedure against DUNA HOUSE FRANCHISE Kft. (Real Estate Agency) and Otthon Centrum Franchising Tanácsadó Kft. (Real Estate Agency). The investigation was initiated with an unannounced inspection held by the GVH at the seats of the undertakings under investigation.

According to the available data, the GVH presumes that the real estate agency undertakings possessing nationwide territorial networks entered into an anti-competitive agreement in 2013, under which certain assignments became available and transferable for the network sellers of both real estate agencies and the concerned real estates were displayed on the homepages of both real estate agencies.

The GVH presumes that the terms of service, in particular the fees, applied in the concerned assignments as a consequence of the agreement between the two real estate agencies, may have been unified and that this may have resulted in the fees being raised. The cooperation between the undertakings may considerably increase their market shares in the long term on the seller side of the real estate market and exclude their competitors from this side of the market.

The GVH suspects that the undertakings under investigation have presumably violated, by the above-mentioned conducts, the provisions of the Hungarian Competition Act with regard to the prohibition of restrictive agreements.

The unannounced inspection of the GVH is ensured in the Hungarian Competition Act. According to the provisions of the Hungarian Competition Act the inspection requires prior judicial consent.

The initiation of the competition supervision proceeding does not mean that the undertakings in question have actually committed the infringement. The proceeding seeks to clarify the facts and to prove that the presumed infringement has been committed. According to the Act these proceedings must be closed within 6 months, however, this time limit can be extended two times by a further 6 months, depending on the complexity of the case.

Case number: Vj-57/2014.

Budapest, 4 July 2014

Hungarian Competition Authority

Further information:
Katalin GONDOLOVICS
spokeswomen
Hungarian Competition Authority
Mail: 1054 Budapest, V. ker. Alkotmány u.5.
Postal address: 1245 Budapest, 5. POB 1036
Tel: (+36-1) 472-8902
Email:
http://www.gvh.hu

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Changes to the Hungarian competition rules – proceedings become more predictable

The amendments made to Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices Act (the Hungarian Competition – Tpvt.) which will enter into force on the 1st of July will constitute several substantive and procedural modifications. The changes, which are the result of the experiences gained over the last couple of years in the law enforcement, will result in the GVH’s proceedings (Gazdasági Versenyhivatal - Hungarian Competition Authority) becoming more clear and predictable.

The more up-to-date legal background that the modifications will result in will enable the GVH to fulfil its role more effectively. The clearer legislative conditions that will exist will also allow better adaptation to the economic changes that have taken place since the last modifications were made to the Act and to current European legal practices and standards.

Merger procedures are significantly affected by the amendments. Due to the procedural changes made to merger control, the administration deadline for simpler (first phase) merger cases has been reduced from 45 to 30 days. Furthermore, another significant change is that a merger cannot be realised until the approval of the GVH has been attained. In the GVH’s opinion, these alterations will result in a reduction in the administrative burdens faced by market players without substantially increasing the risk that restrictive mergers would be approved, and they will also provide the GVH with effective tools against undertakings that disobey merger legislation.

Rules regarding access to files and data management have also undergone significant changes in order to enable the GVH to conduct its investigations even more effectively, while continuing to comply with data management and data protection standards.

The changes concerning cartel and abuse of dominance cases involve corrections to the rules of the so-called leniency policy. This policy allows the Authority to reduce or waive fines for those undertakings that voluntarily cooperate in discovering cartels or providing evidence of them.

To strengthen transparency in the area of consumer protection the provisions of the Act on Business Advertising Activity regarding the prohibition of misleading and unlawfully comparative advertising have been incorporated into the Competition Act.

The modifications also aim to highlight the fact that the development of competition advocacy and competition culture is a key task. These two areas are of high priority in the GVH’s work as by shaping the legal environment to be competition-friendly, increasing the recognition and compliance of competition law through improved consumer awareness, the GVH can effectively contribute to improving the intensity of competition and thus to economic growth, employment and living standards, and overall, to social welfare.

Budapest, 30 June 2014

Hungarian Competition Authority

Further information:
Katalin GONDOLOVICS
Spokeswoman
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postaddress: 1245 Budapest, 5. POB 1036
Tel: (+36-1) 472-8902
Email:

http://www.gvh.hu

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