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The GVH’s first case concerning an influencer is closed by the acceptance of commitments

The Hungarian Competition Authority (GVH) has accepted the commitments offered by GoldenEye Kreatív Kft and Magyar Telekom Nyrt. (Telekom), according to which the communication practice of the influencer, and the contracting practice relating to marketing cooperation with influencers have changed. Additionally, the commitments also include communication activities with educational purposes. The GVH did not establish an infringement in the case and therefore did not impose a fine. According the GVH, beside the targeted circle of consumers, the commitments are also capable of reaching and guiding advertisers, business partners, and other influencers.

The GVH investigated whether the contents and posts which had been appearing on the Facebook page of Kasza Tibor from the 1st of August 2016 promoting Telekom products, services, and the brand in general, could be regarded as unfair commercial practices, given the fact that Telekom paid for these contents. However, in the case of certain posts it was presumed that this fact was not obvious to the consumers reading the posts.

As regards to promotion through the use of influencers on social media, in general the GVH established that

  • consumers widely follow popular well-known persons, influencers, bloggers, vloggers, youtubers etc. on social media for the purposes of entertainment and obtaining information;

  • the business practices carried by the contribution of influencers, influencers and also the order and support of those are becoming increasingly popular among market participants and advertisers;

  • it cannot be qualified as an independent opinion or neutral content if the publisher of the post has an economic interest in the publication, irrespective of whether this interest is a paid sum, framework contract, gift product or service, dividend, premium or any other form of income etc.;

given that social media posts take many different styles/forms, contain different contents, and may be paid or supported in a variety of different manners, non-independent contents often appear in such a way that there is no, or no obvious reference to the fact that they are of a commercial nature.

The GVH was of the opinion that while a number of competition supervision procedures could be launched on different markets, that given its stance in these types of cases, the public interest could be protected more efficiently – at least in the short term – through the acceptance of commitments which would provide guidance for different market participants. The GVH also took into account international recommendations and guidance, but also taking into account differences relating to language and consumer habits, it found that the fact of the accepted commitments could act as an efficient and effective warning for the market participants.

The undertakings also have to follow mutatis mutandis the advertising and other regulations and prescriptions of the used platform, which – according to the currently available information – are not contrary with the expectations formulated by the GVH; however, these regulations serve not only consumers but also the rational economic interests of the given platform.

Although with regard to the commitments the GVH did not qualify the posts investigated in the given case, a paid content which appears among the posts of an individual (regardless as to whether this person is a public figure, influencer, underage youtuber, blogger, vlogger) can be considered as lawful if

  •  it appears simply, unequivocally, in an understandable way, furthermore
  • it is clearly pointed out to consumers that it is not an independent neutral opinion or recommendation as there is a reward or other direct economic interest behind it. This includes such cases where

 o    the maintainer of the page receives some kind of benefit, present or service for the post, in return for the recommendation, or where

 o    someone promotes his/her own undertaking or the product of his/her own undertaking (but this relation is not evident from the commercial practice and it is also not well known).

Moreover, it is important to note that in cases where there is no obvious sign that the posts of influencers and other private person with a significant number of followers contain a promotion, not only the editor of the given page may be held responsible, but also the advertiser and the undertaking which contributes to the publishing and formation of the post.

Case number: Vj/110/2016.

In connection with the present case, the GVH has published a guideline entitled #GVH#Megfeleles#Velemenyvezer, which is available here on its website.

Budapest, 21 November 2017

Hungarian Competition Authority

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

Further information:
GVH Customer Service

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



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The GVH exercises its new power for the first time to investigate the acquisition of the cable network in Oroszlány

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) initiated a competition supervision proceeding against DIGI Távközlési és Szolgáltató Kft. for the first time to investigate a concentration meeting the enforcement threshold of HUF 5 billion and not having been notified to the GVH.

Pursuant to the Hungarian Competition Act, in the case of a concentration of undertakings the authorisation of the GVH must be sought in cases where the aggregate net turnover of all the undertakings concerned exceeds HUF 15 billion and the net turnover of each of at least two of the groups of undertakings concerned exceeds HUF 1 billion. In addition, according to the rules applicable from 15 January 2017, the GVH is empowered to investigate smaller concentrations in a separate competition supervision procedure where the aggregate turnover of the participating undertakings concerned exceeds HUF 5 billion and the possibility of a significant decrease in competition on the relevant market cannot be excluded. Such transactions can be investigated by the GVH within 6 months after their realisation.  The GVH has not launched such an investigation ex officio since the entering into force of the new rules.

In August 2017 DIGI Távközlési és Szolgáltató Kft. took over in twenty municipalities the communication system and the related portfolios of subscribers and contracts of Greencom Kft. within the framework of a transaction which qualifies as a concentration. In order to investigate this concentration the GVH launched a competition supervision transaction under the case number Vj/49/2017, as the concentration reached the threshold of HUF 5 billion subject to authorisation and in the case of one municipality (Oroszlány) the possibility of a significant decrease in competition arose. The GVH deliberated the necessity of initiating the procedure after receiving a complaint from a private person.

The initiation of the competition supervision procedure does not mean that the concentration will in fact lead to harmful effects that necessitate intervention; furthermore, in such cases the realisation of such a transaction without prior notification does not qualify as a violation of the stand still obligation. The procedure intends to clarify the facts in order to allow possible competition effects to be assessed and evaluated. In accordance with the applicable law the GVH has to close the procedure within four months.

Case number: Vj/49/2017

Budapest, 8 November 2017

 Hungarian Competition Authority

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

 

 

Further information:
GVH Customer Service

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



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Fines imposed by the GVH for unlawful drug advertisements

The Hungarian Competition Authority (Gazdasági Versenyhivatal, GVH) established that the advertisements of SANDOZ Hungária Kereskedelmi Kft. (SANDOZ) related to ACC OTC products were unlawful as they were not in accordance with the summary of product characteristics (SmPCs) and instead went beyond them. The advertisements promised a quick effect concerning the overall mechanism of action of the medicinal products, when according to the SmPCs the quick effect only concerned the absorption rate. The GVH imposed a fine of HUF 105 million on the undertaking for the infringement.

The GVH investigated a number of statements that appeared in advertisements relating to the quick effect mechanism of ACC products. The following slogans, among others, were examined.

  • Quick solution to rheumatic coughing
  • Quickly clears respiratory tract
  • ACC, it acts quickly  

The above-listed slogans appeared in press advertisements, on posters on the walls of medical offices and drugstores, in TV advertisements and on drugstore promotional flyers.

The marketing authorisation of ACC medicines was issued by the National Institute of Pharmacy and Nutrition (OGYÉI).

In order to assess the claims in question, the GVH sought the professional opinion of the OGYÉI. According to the OGYÉI, the SmPCs of the medical products under investigation did not support the quick effect of the drugs; in other words, the claims were not in compliance with the SmPCs.

According to the decision of the GVH, between October 2015 and April 2016 SANDOZ was engaged in an infringing advertising activity and unfair commercial practice. Through its behaviour, it violated the legal provisions related to unfair commercial practices, as its advertisements concerning a number of ACC products were not in line with their authorised SmPCs by emphasising the quick effect and in general the quick mechanism of the products.

The GVH determined the amount of the fine on the basis of the costs of the communication tools.

The GVH considered, as aggravating factors, that the investigated commercial practice reached a wide range of consumers, and it was extended in time covering the whole commercial season.

The GVH considered, as mitigating factors, that the undertaking under investigation

  • based on the documented decision of the management – within the framework of its compliance programme – put an end to the unlawful commercial practice as a result of the initiation of the competition supervision proceedings and

  • had also made substantive compliance efforts prior to the investigation in order to avoid possible infringements, and  within the framework of this mechanism, it also modified the commercial practice investigated.

Once again the GVH would like to draw attention to the fact that advertisements related to OTC medicinal products (available in pharmacies) that are not reimbursed by the social reimbursement system are only lawful if the advertisements are in line with their SmPCs.

According to the case-law of the GVH, not only those commercial practices are considered as unlawful which contradict and which are not in accordance for any reason with the SmPCs, but also those claims, the contents of which, go far beyond the indications, effects and mode of action set forth in the SmPCs. A commercial practice raises competition concerns and requires competition supervision intervention if it contains statements that go beyond the indications, effects or the absorption parameters described in the SmPCs, and that exaggerate and generalise, hereby making consumer understanding (eventually objective consumer choice) more difficult.

Case number: Vj/35/2016

Budapest, 3 November 2017

 Hungarian Competition Authority

Information for the press
Andrea BASA, Spokesperson
H-1054 Budapest, Alkotmány u. 5.
Tel.: (+36-1) 472-8902
Fax: (+36-1) 472-8898
Mobile: +3630 618-6618
Email: basa.andrea@gvh.hu
sajto@gvh.hu
http://www.gvh.hu

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



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Acceleration and streamlining of merger procedures, and the appearance of a new type of consumer protection cases – the GVH’s activity in 2016 in a nutshell –

The Economic Committee of the Hungarian Parliament has approved the annual report of the Hungarian Competition Authority (GVH) on its activities in the year 2016 and on its experience with the application of the Competition Act.

Last year the GVH made decisions in 120 cases and imposed fines amounting to a total of approximately HUF 5.4 billion. Almost half of the cases terminated involved cases on concentrations. As compared to previous years, the number of decisions made in merger authorisation cases has overtaken the number of decisions made in consumer protection cases for the first time.

As a result of an amendment made at the beginning of 2016 decreasing the bureaucracy associated with public administrative tasks, the administration deadline for assessing simpler merger cases has significantly decreased. While the deadline for simplified procedures generally took 36 days in 2012, this was decreased to 12 days by 2016.

Once again last year the fight against cartels constituted a priority activity of the GVH, along with the protection of vulnerable consumers. The GVH also paid particular attention to the processes taking place within the digital world, both in relation to public media and other forums, and it aimed to respond to the questions raised in connection with the data based economy with its competition authority tools. The possibility of issuing warnings that entered into force in June in 2015 was applied twice against SMEs, hereby promoting compliance with competition law.

Similarly to previous years, the GVH facilitated market players’ understanding of competition law through the provision of handouts, guidelines and notices (four new notices were prepared on concentrations and a new guideline was published on the exercise of the right to access to files), while also further developing a culture of competition (via communication campaigns, publications). In 2016, with the aim of establishing a tradition the GVH organised for the first time the Hungarian Competition Law Forum I in cooperation with the Hungarian Competition Law Association.

The GVH has published its analysis for the third time in relation to the quantification of consumer benefits arising from competition protection. According to this analysis, in the period between 2011-2016 the GVH saved up more than six times its own budget for the benefit of consumers by uncovering competition-restricting agreements, abuses of dominant position and through the use of its merger control regime.

The complete annual report and its summary in Hungarian are available on the website of the GVH.

Budapest, 30 October 2017

Hungarian Competition Authority

Information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: (+36-1) 472-8902
Mobile: +36 30 6186618
Email:
press@gvh.hu

http://www.gvh.hu

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

 

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Client Friendly solution to the access to the file – Virtual Data Room at the GVH

From 25 October 2017 the Hungarian Competition Authority (GVH) - due to opening a Virtual Data Room – will be providing electronic access to files.

In the course of its competition supervision proceedings the GVH handles and stores a significant amount of documents. The representatives of the undertakings concerned – according to the rules of the Competition Act – are entitled to access the files that have been generated in the course of their official cases; they may make copies, or for a fee may have copies or certified copies made, all of which may then be used in the cases in question. The amount of documents accumulated in relation to one case can reach several thousand in pages, with the result that access to the file by attending in person and the making of copies is a lengthy and costly process for both the GVH and clients.

Through the opening of the Virtual data Room the processes related to access to the file and the claiming and providing of copies will be simpler and faster. In addition to electronic access to files, the GVH will also provide the possibility of traditional access to the file by attendance in person.

The Virtual Data Room will provide an online access opportunity and interface for those clients that have been approved as access-entitled users in relation to individual cases of the GVH or to the persons authorised by the clients (for example legal representatives or counsel). The login users will be identified through the system of the Client Site (Ügyfélkapu).

The persons mentioned above in connection with the respective documents will be entitled

  • to view and download a copy with a watermark and to print the documents generated in their cases and the connecting files;
  • to search in the individual documents and in the files;
  • to subscribe to the e-mail alerts related to the process of access to the file;
  • to view the various system messages;
  • to order a simple copy or a certified copy of particular documents and files;
  • to schedule an appointment for access to the file, in the event that due a technical reason (for example a file size that is too big or an improper file format) a document is inaccessible and
  • to mark the documents with markers only visible by the client group.

The GVH is convinced that the introduction of the new Virtual Data Room system will further strengthen the client friendly nature of the GVH’s activities.

More information about the functioning of the Virtual Data Room can be found in the Tutorial Manual and in the User Manual. The Tutorial Manual and the User Manual are available only in Hungarian.

Budapest, 25. October 2017.

Hungarian Competition Authority

 

Information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: (+36-1) 472-8902
Mobile: +36 30 6186618
Email:
press@gvh.hu

http://www.gvh.hu

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

 

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