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Competition supervision proceeding initiated in relation to the TV show “Ékszer”

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) has initiated an investigation in relation to the TV show “Ékszer”, which is broadcast by several TV channels. It is alleged that the sales methods employed on the show amount to an infringement of the prohibition of unfair business-to-consumer commercial practices.

The GVH received several complaints regarding the show. After assessing the complaints, the GVH decided to initiate a competition supervision proceeding against the producer of the show, Emporia Style Kft. Within the framework of the proceeding the GVH will examine whether:

  • the undertaking has actually, on any occasion, sold the advertised pieces of jewellery at their stated, full original prices or whether the stipulated discounted prices have always in fact been applied, thereby resulting in false advertising;

  • the products actually possess the stipulated characteristics (e.g. “the blessing of the Pope”);

  • consumers calling into the live show can in fact influence what happens on the show- i.e. if the prices and the stocks of the products are actually influenced by the participation of consumers, or if consumers are in reality only watching a previously scripted and recorded show; and

  • consumers were forced to make immediate decisions, thereby depriving them of the opportunity to make well-established decisions, as a result of statements claiming that the advertised products would only be available for a limited period of time and that the stocks of the products at the discounted prices were continuously decreasing.

  • The initiation of the competition supervision proceeding does not mean that the undertaking in question has in fact committed the alleged infringement. The aim of the proceeding is to clarify the facts and to demonstrate the alleged infringement. The time frame for the proceeding is three months, which in justified cases may be extended twice by two months each time.

Case number: Vj/31/2018.

Budapest, 05 October 2018

Hungarian Competition Authority

Information for the press:


http://www.gvh.hu

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

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Results and new directions in consumer protection – the digital strategy of the GVH has been published

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) has elaborated a digital consumer protection strategy in order to react more effectively to current challenges on the markets. At the same time, the GVH has summarised the results and latest directions concerning the application of the Act on the Prohibition of Unfair Commercial Practices against Consumers which entered into force ten years ago.

A decade has passed since the Act on the Prohibition of Unfair Commercial Practices against Consumers entered into force on 1 September 2008. The GVH carries out its consumer protection duties alongside the MNB and consumer protection authorities. Over the past 10 years the GVH has continuously provided content to the existing consumer protection frameworks through its decisions in a number of specific cases, thereby facilitating the ability of consumers to make decisions without distortion.

The following key figures represent the GVH’s remarkable consumer protection activity over the past ten years:

  • the GVH delivered a decision in 401 cases through the application of the jubilarian UCP Act
  • imposed a fine of more than 5 billion HUF (cca 15 million EUR)
  • accepted commitments in 34 cases which enabled the undertakings to correct their infringements themselves
  • ordered the implementation of compliance programmes in 16 cases to ensure that the undertakings operate in accordance with the law
  • required undertakings to set up consumer awareness-raising educational campaigns in 12 cases
  • issued warnings against SMEs in 5 cases
  • initiated litigation to enforce civil claims of consumers in 2 cases
  • issued 275 press releases
  • carried out communication campaigns on 4 occasions in order to strengthen the awareness of consumers
  • took part in 6 international sweep projects

The investigations of the GVH regarding consumer protection covered several market sectors and products. At the beginning of the decade, the operation of consumer groups targeting individuals excluded from the services of credit institutions (BAR listed, pensioners) gave rise to significant work for the GVH. In the second half of the 2010s the timeshare resale market required particular attention. Misleading statements related to the therapeutic and health effects of certain products are a recurring subject of the GVH’s investigations, as well as the unlawful advertising practices of the information and communication and telecommunication sectors.

However, in recent years the GVH's attention has increasingly focused on unfair commercial practices related to the digital and databased economy. The GVH has published a Guidance Document in connection with advertising via influencers who are playing an active role on social media. Furthermore, the GVH has investigated the information published by certain online service providers regarding the processing of personal data in order to consumers purchase their products in light of these information. In the course of its consumer protection investigations the GVH is also increasingly monitoring the content that is appearing on online marketplaces and communication channels.

In order to handle new types of infringements against consumers in a more efficient and timely manner, the GVH found it necessary to elaborate a digital consumer protection strategy, which has just been published today.

The dynamics of digital markets, the special features of the demand and supply side, and in particular the unique characteristics of the consumers’ decisions, which differ from other markets, necessitate the application of new tools and the establishment of priorities for the future. With this new approach, the GVH seeks to ensure that its steps, practices, interventions and messages are in line with the rapid development of business models and commercial practices created by the digital economy.

The medium-term digital consumer protection strategy is available on the GVH’s website.

Budapest, 27 September 2018

Hungarian Competition Authority


Information for the press:
sajto@gvh.hu
http://www.gvh.hu

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

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Substantial reduction of fine thanks to cooperation of the parties

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) found that GE Hungary Kft. and Silver Wood – IT Kft. had committed a competition law infringement in the course of purchasing the radiology IT products of Szent János Hospital and Észak-budai Egyesített Hospitals, as the concerned undertakings had entered into an agreement which determined the winning bidder of the tender process in May 2015, with the undertakings coordinating their prices accordingly. However, during the proceeding both undertakings cooperated with the GVH, and therefore a total fine reduction of more than ten million HUF (cca 31 thousand EUR) was granted.

The significant total fine reduction of more than ten million HUF was partly a result of the fact that GE Hungary Kft. had submitted a leniency application in which it acknowledged that it had committed a competition law infringement, also attaching evidence supporting the establishment of an infringement. On the other hand, Silver Wood – IT Kft. acknowledged the statement of facts established by the GVH and forfeited its right of appeal in the framework of a settlement procedure; consequently, the GVH reduced the fine imposed on Silver Wood – IT Kft. by 30%. A further reduction of 5% was granted because the undertaking elaborated a post-compliance programme and undertook to verify the implementation of it in a detailed manner.

Taking into account the cooperative behaviour of the undertakings and the relevant provisions of the applicable leniency policy, the GVH did not impose a fine on GE Hungary Kft., while in the case of Silver Wood – IT Kft., in accordance with the above, the GVH reduced the fine imposed on it by more than a third to 2,600,000 HUF (cca 8 thousand EUR). Consequently,the GVH granted a total fine reduction of more than ten million HUF having regard to the cooperation of the undertakings.

Case number: Vj/19/2017

Budapest, 3 September 2018

Hungarian Competition Authority


Information for the press:
sajto@gvh.hu
http://www.gvh.hu

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

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Competition Proceeding against Google is closed with Commitment Decision

The Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH) investigated the communications practices of Google LLC (Google) in relation to its Internet and applications’ services personalisation of advertisements”, and its data processing of  ‘Allo’ chat clients and encryption among chat clients termination points.

The GVH investigated whether consumers had received the information necessary to be able to make well-established decisions about the data processing activity of Google, which is an essential aspect of Google’s products. The GVH did not assess the communication practice of Google’s products from a data protection point of view, but instead analysed whether the data processing practice was carried out in compliance with the applicable rules and regulations. Namely, the rights of consumers to make undistorted business decisions may be violated even if data protection rights are properly observed, if consumers are not supplied with information which would be necessary to make well-established decisions (or not supplied timely with correct information, or supplied timely with misleading information, or the information is not clear enough).

As regards to its communications practice concerning the data processing of applications – relating to one of the behaviours of Allo chatclients – the GVH obliged Google to fulfil the voluntary commitments it had undertaken. While the GVH did not consider it well founded to terminate the proceeding and to state a lack of infringement, it reached the conclusion that – concerning the communications in the context of the data processing of Allo – a potential violation may be efficiently remedied by the commitment package submitted by Google, thereby enabling the protection of the public interest to be guaranteed.

The GVH objected to the fact that Google had not provided direct information about other Google products and about the processing of consumers’ data in the advertisement, installation and application of Allo chatclients (which may be used irrespective of other Google accounts), which may be necessary to enable consumers to make well-established decisions. By not providing this information, consumers are not fully informed about the characteristics and nature of the product and about the price of the application.

The commitments undertaken by Google require it to set up a page on the data processing of Allo under the ‘Allo Help’ website, which will be accessible both from the installation process description of Allo and from the description available in AlloGooglePlay and iOSAppStore. Google undertook to draft this page in plain language and in a balanced manner, i.e. not exaggerating or diminishing the decision-making options, rights and potential obligations of consumers. Furthermore, it has also undertaken that in the descriptions of the webstores this information will be easily accessible, without long scrolling, in the first paragraph of the texts, immediately following the introductory paragraph.

In accordance with the commitments, Google is obliged to send the hyperlink of the data management’s sub-page within the application of Allo to the users of the product in Hungary. In addition, in the fourth quarter of 2018 it must publish a one-day graphical educational banner on its YouTube channel highlighting that Google collects and handles consumers’ personal data and recommending that consumers review the privacy policies and settings.

Google has also undertaken to verify that it has implemented the above-stated measures, and also that the information will not be communicated in a less noticeable way and that it will not reduce the awareness level of consumers in the future.

The GVH considered the commitments submitted by the undertaking in accordance with Article 75 of the Hungarian Competition Act and Notice No. 6/2014 of the President of the GVH and the Chairman of the Competition Council on commitments made in procedures initiated in connection with an alleged infringement of the prohibition of unfair business-to-consumer commercial practices.

The GVH found that the other conduct of the undertaking – the statement concerning encryption between termination points – which was investigated in connection with Allo chat client, did not amount to an infringement of competition law. The GVH has also terminated its competition supervision proceeding regarding the commercial practice related to the data management of new Google features.

According to the GVH, the commercial practice that has been modified as a result of the submitted commitments extends beyond this immediate case, as it not only affects the information provided in Hungarian: the data management subpage will be translated in 44 languages at the same time, furthermore the undertaking can reach a larger Hungarian group of consumers with the general, data protection themed educational banner, than the users of Allo chat client.

Case number: Vj/88/2016

Budapest, 31 August 2018

Hungarian Competition Authority

Information for the press:
sajto@gvh.hu
http://www.gvh.hu

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

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The fines imposed as a result of a cartel related to prepayment have been substantially reduced

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) imposed fines amounting to a total of approximately 5 billion HUF (cca 15.5 million EUR) on leading commercial banks due to their restriction of the prepayment of foreign currency loans on a fixed exchange rate at the end of 2011 and at the beginning of 2012.

The GVH launched a competition supervision proceeding against thirteen banks on the ground that they had restricted the prepayment of currency-based mortgages on a fixed exchange rate in 2011. In its decision delivered on 19 November 2013, the GVH found that Budapest Hitel- és Fejlesztési Bank Zrt., CIB Bank Zrt., the Hungarian branch of Citibank Europe plc., Erste Bank Hungary Zrt., FHB Jelzálogbank Nyrt., Kereskedelmi és Hitelbank Zrt., Magyar Takarékszövetkezeti Bank Zrt., MKB Bank Zrt., OTP Bank Nyrt., Raiffeisen Bank Zrt.,UCB Ingatlanhitel Zrt. and UniCredit Bank Hungary Zrt. had restricted competition between 15 September 2011 and 30 January 2012 by coordinating their strategies and exchanging information qualifying as a business secret in order to restrict the prepayment of foreign currency-based mortages on a fixed exchange rate. The GVH imposed fines amounting to a total of approximately 9.5 billion HUF (cca 29.4 million EUR) on the concerned financial institutions.

The majority of the concerned banks challenged the decision of the GVH before the court. The Supreme Court of Hungary in its decision delivered on 13 December 2016 declared that the competition authority was correct to find that the banks had coordinated their strategies in order to restrict access to loans which would have been suitable to redeem currency-based mortgage loans, but it also ordered the GVH to conduct new proceedings in relation to the calculation of the fines imposed on eight financial institutions.

In the new proceeding the GVH – taking into account the guidelines of the Supreme Court of Hungary – calculated the fines in accordance with Notice No. 11/2017 of the President of the GVH and the Chairman of the Competition Council as a result of which the following fines were imposed on the concerned banks:

 

New fine HUF

Original fine HUF

Budapest Hitel- és Fejlesztési Bank Zrt.

275,000,000

283,500,000

CIB Bank Zrt.

460,000,000

835,400,000

Erste Bank Hungary Zrt.

900,000,000

1,725,700,000

Kereskedelmi és Hitelbank Zrt.

780,000,000

983,300,000

MKB Bank Zrt.

405,000,000

783,000,000

OTP Bank Nyrt.

1,435,000,000

3,922,400,000

Raiffeisen Bank Zrt.

465,000,000

583,600,000

UniCredit Bank Hungary Zrt.

185,000,000

306,300,000

The amounts of the fines according to the exchange rate on 21 August 2018

 

New fine EUR

Original fine EUR

Budapest Hitel- és Fejlesztési Bank Zrt.

≈ 850,500

≈ 876,800

CIB Bank Zrt.

≈ 1,422,700

≈ 2,583,700

Erste Bank Hungary Zrt.

≈ 2,783,500

≈ 5,337,300

Kereskedelmi és Hitelbank Zrt.

≈ 2,412,400

≈ 3,041,200

MKB Bank Zrt.

≈ 1,252,600

≈ 2,421,700

OTP Bank Nyrt.

≈ 4,438,200

≈ 12,131,300

Raiffeisen Bank Zrt.

≈ 1,438,200

≈ 1,805,000

UniCredit Bank Hungary Zrt.

≈ 572,200

≈ 947,300

One of the main reasons for the reductions of the fines was that – having regard also to the judgment of the Supreme Court of Hungary – the GVH considered the proportional share of the incomes gained via the prepayable foreign currency loans during the infringement period as the basis of the fines in the new proceeding, whereas in the original proceeding the proportional share of the incomes realised via the whole volume of the mortgage loans had served as the basis. This latter included all HUF and currency-based mortgage loans. The fines were further reduced as a result of the fact that in the original proceeding the GVH had taken into account, as an aggravating circumstance, that the majority of the concerned banks had already committed a competition infringement, while in the new proceeding the GVH did not take this into account as an aggravating circumstance on the basis that the Supreme Court of Hungary had made a reference for a preliminary ruling before the Court of Justice of the European Union regarding case Vj/18/2008 that served as the base for aggravating circumstance due to recidivism in the original decision of the GVH.

Case number: Vj/20/2017

Budapest, 22 August 2018

Hungarian Competition Authority

 

Information for the press:
sajto@gvh.hu
http://www.gvh.hu

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

Printable version in PDF

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