Vodafone’s advertising campaign ruled unlawful

According to the GVH’s (Hungarian Competition Authority) decision, Vodafone Magyarország Mobil Távközlési Zrt. (Vodafone) broadcasted comparative advertisements and engaged in unfair market behaviour in its “Network of the Most” campaign. The GVH imposed a 125 000 000 HUF (approx. 415 000 EUR) fine on Vodafone for the infringement.

The GVH concluded that the categorical statements of some advertisements in the campaign had conveyed the message to consumers that Vodafone has the best and fastest data network. Consequently, these advertisements were comparative and unlawful. Due to the nature of mobile internet (communication technology, network workload, environmental conditions) the speed of networks cannot be legitimately and objectively compared. Among other reasons, verifiable comparison is not possible because the National Media and Infocommunications Authority of Hungary no longer publishes mobile operators’ coverage maps and other technology data (GPRS, EDGE, 3G, HSPA).

The GVH also determined that the following sentences

“At the fastest, longest, highest and widest places the Vodafone 3G network is available. As the only network in the country with a 97,4% coverage, the Network of the Most goes with you everywhere. Vodafone, the Network of the Most”

orally communicated in Vodafone’s TV advertisements were deceptive, as consumers generally pay attention to the information emphasised at the beginning of an ad and lose some interest towards the end of an ad, thus missing (in this particular case) the information that the superlative adjectives used were in fact referring to the sights of Hungary shown in the advertisement and not to the network of Vodafone.

The measurements taken about Vodafone’s network were not representative, the mobile operator did not disclose any comparative data, and of the 10 locations shown in the advertisements, Vodafone could only prove that proper 3G coverage existed in one of these locations.

The GVH based the calculation of the fine on the advertising costs of Vodafone. During the determination of the amount of the fine the GVH regarded as aggravating factors that the advertisements reached a broad range of consumers, and that the undertaking had previously been sentenced several times for similar infringements. It was considered as an attenuating factor that consumers were able to obtain more adequate and detailed information from other sources before making a decision.

Case number: Vj/77/2013.

Budapest, 14 November 2014

Hungarian Competition Authority

Further information:
Andrea BASA
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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Proceeding initiated for suspected cartel in public procurement

The Hungarian Competition Authority (GVH) initiated a competition supervision proceeding against four undertakings (MAGYAR PLASTIROUTE Forgalomtechnikai Kft., Solinwest 2000 Ipari, Kereskedelmi és Szolgáltató Kft., Szabolcs-Mag 98 Kereskedelmi és Szolgáltató Kft., “TRANSIT-SPEED” Fuvarozó és Kereskedelmi Kft.) and Bacsó István, an individual entrepreneur. At the same time the GVH held dawn raids at the premises of several undertakings.

The GVH noticed that starting in 2012, the above mentioned undertakings have been negotiating their entering prices and dividing the tenders between each other in the public procurement procedures for supplying road salts and other de-icers.

The undertakings under investigations have presumably violated the provisions of the Hungarian Competition Act and the Treaty on the Functioning of the EU with regard to the prohibition of restrictive agreements.

According to the Hungarian Competition Act, the GVH may hold unannounced inspections. The provisions of the Act require the GVH to obtain prior judicial consent before holding the inspections.

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/76/2014.

Budapest, 7 November 2014

Hungarian Competition Authority

Further information:
Andrea BASA
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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Regional publishers shared the market of county-wide daily newspapers

The Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH) established that Axel Springer Magyarország Kft. (Axel Springer, its new name: Mediaworks Kft.), Russmedia Kft. (Russmedia, its former name: Inform Média), Lapcom Kiadó Kft. (Lapcom) and Pannon Lapok Társasága Kiadói Kft. (Pannon Lapok) had entered into competition restrictive agreements aimed at preventing direct entry into each other’s geographical area. The GVH imposed a total fine of 2.2 billion HUF (approximately 7.3 million Euro) for the infringement.

 

The GVH noticed that the contracts entered into by the above-mentioned undertakings that were legally valid from 2000 (lasting from November 2000 and from May 2002 to April 2010) (or their legal predecessors) concerning Sunday papers contained mutual non-compete clauses and price fixing clauses.

The existence of competition restrictive agreements was supported by the mutual non-competition clauses contained in the contracts between Axel Springer and Indorm Média, and between Axel Springer and Lapcom, which stipulated that the parties may not invade each other’s county-wide/regional market.

Based on the bilateral contracts between Axel Springer and Inform Média, Axel Springer and Lapcom, and Axel Springer and Pannon Lapok, it could be assumed that the above-mentioned undertakings were coordinating both retail prices and advertising prices.

According to the decision of the GVH, the bilateral agreements between Axel Springer and the other three groups of undertakings were anti-competitive in nature and were part of a comprehensive market sharing agreement which purposely restricted the county publishers from entering into each other’s territory with secondary daily newspapers or other alternative publications.

The GVH found that as a result of their conduct the above-mentioned undertakings had infringed the prohibition of restricting competition, and consequently imposed a competition supervision fine amounting to a total of 2 164 869 000 HUF, divided as follows:

 Axel Springer

 615 471 000 HUF

 2.1 million Euro

 Russmedia

 480 836 000 HUF

 1.6 million Euro

 Lapcom

 313 140 000 HUF

 1.1 million Euro

 Pannon Lapok

 755 422 000 HUF

 2.5 million Euro

 

The cartel agreement lasted for almost ten years and therefore the base amounts of the fines calculated on the basis of the ‘Notice on the method of setting fines’ in the case of each undertaking significantly exceeded the legal maximum set out by the Competition Act. Accordingly, the GVH imposed the maximum fine on each undertaking, which amounts to 10% of the net turnover of each of the undertakings from the previous year.

Without imposing a fine, the GVH also established in its decision that in July 2010 and September 2011, the undertakings concerned, furthermore in December 2010 and June 2011 Axel Springer and Inform Media, had restricted competition when they shared with each other sensitive information regarding the prices and circumstances influencing the prices of advertisements not published jointly or through consignment sales.

The GVH terminated the proceeding concerning the coordination of retail prices.

Case number: Vj/23/2011.

Budapest, 20 October 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 18 September 2014 the Gazdasági Versenyhivatal (GVH – Hungarian Competition Authority) launched a competition supervision procedure against ALCUFER Ipari Kereskedelmi és Szolgáltató Korlátolt Felelősségű Társaság, FE-GROUP INVEST Vagyonkezelő, Tanácsadó és Nagykereskedelmi Zrt., SELECTOR Elektronikai Termék Újrahasznosító Kft., and Elektronikai Hulladékhasznosító Kft. The investigation was initiated with an unannounced inspection held by the GVH at the seats and premises of the undertakings under investigation.

The GVH presumes that the practices of the above mentioned undertakings were unlawful as they entered into anti-competitive agreements amounting to a collusion and information sharing as of 2012, in order to fix prices, coordinate the actual bids and also to carry out bid-rigging in respect of public procurement procedures issued by the Országos Hulladékgazdálkodási Ügynökség Nonprofit Kft. on the annual collection, transportation and transfer of waste with special focus on electric appliances and electronic equipment resulting from products subject to environmental product fee charges.

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-67/2014.

Budapest, 19 September 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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GVH decision is made in the car refinishing paints agreement

The Gazdasági Veresenyhivatal (GVH – the Hungarian Competition Authority) stated that importers of car refinishing paints and an undertaking operating damage calculation software had an anticompetitive agreement when, during a six-year period, they set an average price that was higher than the real price for car refinishing paints used in domestic damage calculation software. The GVH imposed a total fine of 175,900,000 HUF (586,300 EUR) on seven undertakings.

In its proceeding the GVH investigated whether domestic importers of car refinishing paints and undertakings operating damage calculation software for car repair had coordinated the price increases of car paints and auxiliary materials and the fees which may be charged by repair services working under insurance contracts. The GVH also investigated whether the Board of Car Polishers (an ad-hoc organisation of the undertakings whose activities are connected to car refinishing works and in which in addition to importers of car refinishing paints also other undertakings like insurers, professional interest organs and settling agents have represented themselves) had influenced the level of the average price used for damage calculation software, or limited market access of new potential entrants.

Based on the information at its disposal, the GVH found that several importers of paints - e.g. ALAMI Kereskedelmi és Ipari Kft., AUTOCOLOR Festékgyártó és Forgalmazó Kft, AUTO FINISH Kereskedelmi Kft., Duplakk Kereskedelmi Kft., ERGOLAKK Kereskedelmi Kft., KAMÉLEON MIX Kereskedelmi és Szolgáltató Kft. and SERVIND BUDAPEST Kereskedelmi, Ipari és Szolgáltató Kft. "f. a." - moreover EUROTAX GLASS’S MAGYARORSZÁG Autóinformatikai Kft. operating the EUROTAX damage calculation software, had for at least six years violated the Competition Act by fixing the average price of car refinishing paints for the purpose of damage calculation software higher than the real level.

For most motor vehicle repair works completed under Casco or third-party liability insurance, insurance companies and repair shops use "vehicle repair estimating systems" between each other to determine the price of repairs. These systems are developed to calculate the cost of repairing damage to motor vehicles. Part of the cost of car repairs is the cost of polishing. The average cost of polishing in the repair estimating systems is calculated on the basis of polishing paint-importers’ list prices that are given to EUROTAX GLASS HUNGARY by the importing companies. These are then forwarded by EUROTAX to an independent company which estimates the average cost of polishing. However, refinishing-paint importers reduced their prices in more than 90% of completed sales by 35-45% compared to the retail price lists that they had given to EUROTAX. This means that the list prices provided by importers - to favour repair shops connected to them - were significantly higher than the real prices, which distorted the average cost of polishing which was the basis of calculating the cost of repair jobs.

Since the coordinated conducts described above had both anticompetitive objects and effects, the GVH imposed the following fines as:

  • ALAMI Kereskedelmi és Ipari Kft.: 17,300,000 HUF (57,700 EUR)

  • AUTOCOLOR Festékgyártó és Forgalmazó Kft.: 71,200,000 HUF (237,300 EUR)

  • AUTO FINISH Kereskedelmi Kft.: 32,700,000 HUF (109,000 EUR)

  • Duplakk Kereskedelmi Kft.: 2,100,000 HUF (7,000 EUR)

  • ERGOLAKK Kereskedelmi Kft.: 14,300,000 HUF (47.700 EUR)

  • EUROTAX GLASS’S MAGYARORSZÁG Autóinformatikai Kft.: 2,800,000 HUF (9,300 EUR)

  • KAMÉLEON MIX Kereskedelmi és Szolgáltató Kft.: 35,500,000 HUF (118,300 EUR)

 

The GVH, due to a lack of evidence terminated its proceeding concerning the following conducts:

  • practice aiming to determine polishing price index;

  • publication on the website of EUROTAX of price lists of importers supplying data, information on polishing price index for the members of the Board of Car Polishers;

  • conduct aiming to coordinate price increases of importers of car refinishing paints;

  • conduct aiming to limit the number of undertakings supplying data for the calculation of the average cost of refinishing paints.

Case number: Vj-2/2010.

21 August 2014, Budapest

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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