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Magyar Telekom launches a new low-priced TV + internet + phone package in 406 towns as a result of the intervention of the GVH

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) accepted the commitments submitted by Magyar Telekom Nyrt. (Telekom), according to which, from 2 December 2019, Telekom will offer in 406 towns a new and cheaper – so-called triple-play – package that includes TV, internet and telephone service. In view of the acceptance of the commitments, the GVH did not establish an infringement in the case and therefore did not impose a fine.

The GVH initiated an investigation against the above-mentioned telecommunication company in 2017 after noticing that its triple-play service package, which it introduced in May 2017, had only been made available in those towns where it faced strong competitive pressure. In contrast, it charged higher fees in those towns that lacked strong competition but where its network would have also been capable of providing the ‘Flip’ service. This conduct raised the suspicion that Telekom was charging its customers excessively high fees in these towns.

As a result of the GVH’s proceeding, the telecommunication company has undertaken to introduce a new tariff package in 406 towns, which will include TV, internet and telephone service. The low fee that will be charged for this package will result in considerable savings for consumers, when compared to the costs incurred by consumers when purchasing these services separately from Telekom. As part of the package, subscribers will have access to the following services for a gross monthly fee of HUF 6,350 in the case of electronic (online) administration and a gross monthly fee of HUF 6,950 in the case of conventional (offline) administration:

  • television package with a wide selection of programmes (139 channels of which 32 HD),

  • high-speed internet (150/50 Mbps maximum and 60/25 Mbps guaranteed download and upload speeds for optical networks, 150/5 Mbps maximum and 15/1 Mbps guaranteed download and upload speeds for ED3 cable networks),

  • landline telephone service, within which domestic fixed and mobile networks can be called for HUF 5 per minute at a charge of HUF 5 call set-up charge.

In addition to the above-mentioned services included in the package, Telekom will offer a number of further services and discounts. In accordance with the accepted commitments, Telekom has undertaken to make the new tariff package available in all those towns where its network is technologically capable of providing TV, internet and telephone services. The commitments submitted by Telekom will be in place for a period of 2 years – in view of the rapid technological developments in the telecommunications markets and the ever-changing competitive environment. The new tariff package will be available to both Telekom’s existing customers (without the obligation to pay a contractual penalty) and new subscribers. Detailed information about the package and additional terms and conditions of the service will be available on the Telekom website under the menu for package selection, by clicking on the discount package offer that pops up after entering the address.

A list of the concerned towns can be found in the appendix to the decision of the GVH.

Case number: VJ/56/2017.

Budapest, 11 October 2019

 

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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Commitment decision taken by the GVH in the Wizz Air case: the airline pays affected passengers compensation totalling HUF 250 million (approx. EUR 760 thousand)

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) accepted the commitments offered by Wizz Air Hungary Zrt. (Wizz Air). As a result of the commitments those customers affected by the operation of the Wizz Flex service of Wizz Air since 2010 will receive compensation totalling HUF 250 million (approx. EUR 760 thousand). In addition, Wizz Air undertook to change its information practices, improve the provision of the Wizz Flex service so that it is more comprehensible and consumer friendly, and carry out a targeted information campaign about the rights of air passengers.

The GVH initiated an investigation into Wizz Air’s “Wizz Flex” service after receiving numerous consumer complaints in relation to its operation. Customers buying this ancillary service had the right to modify their flight tickets without paying a fee for the modification; customers only had to pay the differences in prices between their original flight tickets and new flight tickets and between the baggage fees. However, in the course of its competition supervision proceeding the GVH became aware of further detailed conditions relating to the service that significantly restricted the ability of customers to benefit from the free flight modification. Furthermore, it was presumed that consumers had not been given adequate information about the applicable restrictive conditions. A number of examples of the conditions are as follows:

  • as regards to bookings concerning flight tickets for outward and return journeys, it was not possible for customers to reroute their return journeys once their journeys had commenced, moreover after embarking on their journeys customers could only jointly change their outward and return journeys;

  • when accessing the Wizz Flex service feature on the internet it was not possible to individually change the flight tickets of passengers that had been purchased under one booking, meaning that all passengers' tickets had to be changed simultaneously;

  • if the customer wanted to change his/her flight, the price offered to the customer was the same than the price that he/she had originally paid, even if the price of a ticket bought for the same journey without modification would actually have been cheaper. Consequently, in the case of re-routing within the Wizz Flex system the customer was unable to benefit from a favourable difference between the price of the original ticket and the new ticket;

  • in the case of flight changes requested by customers between January and September 2016, passengers had to pay not only the differences between the flight tickets but also the dynamically changing differences relating to the baggage fees.

During the course of the competition supervision proceeding Wizz Air offered a number of commitments, the content of which was discussed by the GVH and Wizz Air. Pursuant to the commitments Wizz Air undertook to credit a lump sum compensation to each consumer who had used the Wizz Flex service since 2010.

Additionally, as regards to those customers that had modified their flights and had been unable to benefit from the lower cost of their chosen new flights, Wizz Air undertook to pay the differences between the flights.

The number of customers entitled to the compensation is between 120 thousand and 220 thousand; the average compensation will be EUR 8.3 per passenger. Wizz Air shall credit the compensation to the Wizz accounts of the customers and the customers shall have five years to use this sum, or to have this sum transferred to their bank accounts on the provision of their banking details. After this 5-year period has elapsed, any remaining compensation that has not been used will be transferred to the SOS Children’s Villages Foundation. Wizz Air must prove that the compensation has been paid through an external audit.

Further to the above, Wizz Air undertook to amend its information practices relating to its Wizz Flex service in order to make the content of the service clear. Additionally it will implement a number of IT developments to make the service more comprehensible and user-friendly and, finally, it will conduct a targeted educational campaign on the consumer rights of air passengers.

When making its decision the GVH took into account, as a significant factor, that the above-mentioned commitments (compensation, provision of the possibility of comprehensive use of the service and educational campaign) offered by Wizz Air will have a direct impact on consumer welfare. The GVH will monitor the fulfilment of the commitments by conducting a follow-up investigation.

Case number: VJ/17/2017.

Budapest, 31 July 2019

 

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

The Hungarian Competition Authority has issued a number of recommendations aimed at boosting bank card acceptance

In its report on the findings of its sector inquiry into the bank card acceptance market the Hungarian Competition Authority (GVH) did not reveal any market failures necessitating the initiation of competition supervision proceedings. It did, however, identify - among other things - a number of market circumstances affecting competition on the market. Consequently, the GVH issued a number of recommendations to address the highlighted concerns.

Payment by bank card is still not widespread in Hungary today, despite the fact that a reduction in cash payment would help to curtail the grey economy. Consequently, in the framework of a sector inquiry the GVH set out to identify the factors that may be hindering the more widespread acceptance of card payment and the ways in which these barriers may be overcome by market players or through regulation.

According to the Authority's report, the number of merchants accepting bank cards significantly increased between the first quarter of 2013 and the first quarter of 2018, with the number of transactions per card also approaching the EU average. However, the number of merchants accepting bank cards is still extremely low in certain territories of Hungary, with many consumers still preferring to pay with cash.

There have been several attempts in recent years to promote the acceptance of bank cards, for example by setting a cap on the level of interchange fees by law and through the introduction of the Ministry of Finance’s POS terminal installation programme.

The sector inquiry also revealed that while the reduction in the level of the interchange fees has generally mitigated the merchants’ cost burden, the extent of the reduction depends on the size of the merchants. The smallest merchants have benefitted the most from the cost reduction; however, when compared to turnover, this merchant size category still faces the highest cost burden. The proportionally higher fees can be partly explained by economies of scale; however, further discrepancies likely stem from differences between merchants – given their bargaining power and awareness. Consequently, the GVH recommends launching awareness raising programmes for merchants.

Fees that are proportional to the transaction number, which also increased during the investigated period, are also primarily detrimental for small-sized merchants processing low-value transactions; consequently, the GVH recommends minimising or eliminating these fees.

The POS terminal installation programme has also contributed to a significant reduction in the acceptance costs of the smallest merchants (less than 1 million HUF quarterly card payment turnover). However, the fees of merchants falling into a higher turnover category (1-2.5 million HUF quarterly card payment turnover) have increased. The reason for this is that a number of merchants already had a POS terminal at the time that the programme was launched, thus, they could not participate in the programme, but due to their low bargaining power, they faced higher acceptance costs. The GVH recommends extending the programme to this category of merchants.

According to a market survey conducted in the course of the sector inquiry, merchants consider it disadvantageous that they only receive the value of purchases several days later. The GVH therefore recommends that acquiring banks speed up the crediting process of card transactions.

In addition, the GVH recommends increasing the popularity of bank card acceptance as well as the use of bank cards by means of tax policy.

The sector inquiry has benefitted from data and comments provided by market players and public bodies. The Authority is confident that the sector inquiry will contribute to the further expansion of bank card acceptance, thus helping to achieve the common goal of reducing the use of cash.

Budapest, 18 July 2019

Hungarian Competition Authority

 

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

Further information:
GVH Customer Service

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

 

Printable version in PDF

The competition supervision procedure initiated against PayPal has ended with the acceptance of commitments

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) accepted the commitments of the online payment method provider, PayPal. On the basis of the commitments, the undertaking is obliged to change the information that it provides to its consumers. In this way consumers will be able to decide more easily about the exchange rates applied to their payments requiring conversion. Having regard to the commitments, the GVH did not establish any infringement in the case and therefore did not impose a fine on the undertaking.

The GVH initiated a proceeding in 2017 March against PayPal (Europe) S.á.r.l. et Cie, S.C.A. because it was likely that the information provided by the payment service provider was both outdated and incomplete regarding the exchange rates applied to payments requiring conversion. The information provided was also inadequate as regards to the options to  modify the exchange rates. Consequently, the GVH considered the information of the undertaking to be misleading to consumers.

PayPal carries out conversions for its consumers at its own exchange rates, however, consumers may also choose to convert their payments at the bank rates applied by their card-issuing banks. Since the exchange rates applied by certain service providers are different, the decision of the user can lead to different purchase prices, which means that it is important that proper and timely information is provided to consumers when they are using such services.

PayPal simplified the operation of its website during the procedure, and undertook to change the information provided to Hungarian users at the time of purchase within 4 months. Consequently, the undertaking will display the exchange option of the card issuer with its own exchange rate. If a consumer decides to use the exchange rate applied by his/her card-issuing bank the undertaking shall advise the consumer to check their bank notification. Furthermore, PayPal undertook to make the contracts it concludes with consumers more transparent.

When making its decision the GVH considered it a significant factor that the commitments of the undertaking directly promote  efficient competition, specifically as regards to the ability to choose and change service providers. The GVH shall monitor the fulfilment of the commitments in the framework of a post commitment investigation.

Case number: VJ/18/2017.

Budapest, 14 June 2019

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


The GVH imposed fines amounting to a total of HUF 70 million for participation in a cartel concerning the review of online cash registers

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) established that Irodatechnikai és Pénztárgép Szervizek Országos Ipartestülete (Hungarian Association of Office Technology and Cash Register Services, hereinafter IPSZOI) and a number of distributors and service companies had engaged in unlawful behaviour when they coordinated the prices for the annual review of cash registers and the related distribution fees, and furthermore, when they also published related recommendations. The GVH imposed fines amounting to a total of HUF 70 million (cca 210 thousand EUR) on the undertakings for the infringements.

The investigation of the GVH revealed that in 2014 IPSZOI set recommended prices for the annual review of online cash registers introduced at that time and communicated these prices to its members. The GVH found that the recommendations could be qualified as unlawful as their aim was to restrict economic competition.

The GVH also noted that parallel to the behaviour of IPSZOI, and partly in collaboration with it, several online cash register distributor undertakings and service providers held consultations. The participants jointly determined the prices of the annual review and the related distribution fees (hologram sticker). Most of the agreed prices were actually introduced and applied on the market by the participants.

The GVH imposed fines for the two related infringements on IPSZOI and the undertakings involved in the price determination: namely on ECR-Trade Pénztárgép Zrt, Micra-Metripond Kft, Montel Informatika Kft, PFK Kereskedelmi és Szolgáltató Kft, ATC Aircom Kft, Juta-Soft Kft and Pezo Info Kft.

In the case of one distributor the GVH did not impose a fine thanks to the cooperation of the undertaking, in the framework of which it submitted a leniency application, acknowledging the infringement and voluntarily attaching supporting evidence. For this reason, the GVH waived the fine that could have been imposed on the undertaking.

Case number: VJ/110/2015.

Budapest, 12 June 2019

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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Nóra Váczi, a member of the Competition Council, has been named as one of the ‘40 in their 40s Notable Women Competition Professionals in Europe, the Americas and Africa’

Nóra Váczi, a member of the Competition Council of the GVH, has been recognised as one of the ‘40 in their 40s Notable Women Competition Professionals in Europe, the Americas and Africa’ in the enforcement category by the W@Competition. In order to be awarded this title, applicants from Europe, the Americas and Africa could apply to a number of categories, such as enforcement, judiciary and policy, in-house, private practice, economics and academia by submitting their professional curriculum vitae. A jury composed of prominent competition law professionals decided which applicants were deemed worthy of being award the title of  ‘40 in their 40s Notable Women Competition Professionals in Europe, the Americas and Africa’.

It is a great honour that Nóra was selected to be among this list of 40 outstanding women, which is comprised of well accomplished women in the field of competition law, for instance, as heads of competition authorities (including, among others, the presidents of the French and Portugal competition authorities), judges and other competition law experts.

The W@Competition organisation promotes the more active participation of women in competition law. The organisation operates an online database of women working in competition law, organises events with women presenters, maintains a competition law blog and aims to make it easier for its members to interact with each other.

We would like to congratulate Nóra on this achievement, and for thereby promoting the prestige of the GVH. We wish her all the best for her work here at the Authority!

For further information: Click Here


The notification of a concentration can now also be filed electronically

Pursuant to Article 43/J (1) of the Hungarian Competition Act, the form for the notification of a concentration published on the website of the Hungarian Competition Authority (“Gazdasági Versenyhivatal” hereinafter: GV) may be submitted electronically.

A notification of a concentration can be filed electronically on the customised platform (Személyreszabott Ügyintézési Felület, SZÜF) of the governmental website using the electronic iForm application filing programme. In case of electronic submission the notification form shall be attached to the iForm application form.

The iForm programme can be accessed on SZÜF: HERE (available only in Hungarian)

The GVH emphasises that the size of the enclosed files in the iForm programme cannot exceed 20MB. If the attachment exceeds 20MB the notification of a concentration can only be filed in person or via postal services.

Further assistance concerning the electronic filing system can be downloaded in PDF format: HERE

Please note that this document is available on our webpage for information purposes only and the notification of a concentration can be submitted only in Hungarian (see here).


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