Proceedings against UPC for suspected abuse of dominance

The Hungarian Competition Authority (GVH) initiated proceedings against UPC Magyarország Telekommunikációs Kft. (UPC) for its conduct in its numerical district 29.

The GVH commenced supervisory proceedings on 20 February, based on a large number of consumer complaints, claiming that in district 29 of UPC (Monor and its surroundings) the quality of the internet service provided is lower (the upload and download speeds are slower) while the price of the internet subscription is higher, compared to the rest of the districts in the country. UPC is the sole telecommunication service provider in Monor and its neighbouring villages.

Through the above-described practice, UPC has presumably abused its dominant position, in contrary to the provisions of the Competition Act. The initiation of an investigation is necessary in order to protect the public interest, taking into account the fact that the conduct of UPC affects a large group of consumers and that the GVH has received a significant number of consumer complaints.

The initiation of the competition supervision proceeding does not mean that the undertaking in question has actually committed an infringement. The proceeding aims to clarify the facts and to prove that the presumed infringement has been committed. According to the Competition Act, proceedings must be closed within 6 months; however, this period can be extended on two occasions by a further six months each time, depending on the complexity of the case.

Case number: Vj/15/2015

Budapest, 2 March, 2015

 

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postal address: 1391 Budapest, 62. POB 211
Tel: (+36-1) 472-8902
Email: 
http://www.gvh.hu

 

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Fines for cartel in public procurement

According to the GVH’s (Hungarian Competition Authority) decision ÉTER-1. Mérnöki és Tanácsadó Kft. (ÉTER-1), and AQUAPLUS Kútfúró, Építő és Termálenergetikai Kft. (AQUAPLUS) negotiated their entering prices and offers on public procurement procedures published by the local government of Komló. The GVH reached the same conclusion in the case of ÉTER-1 and QUALIKO Műszaki Tervezési és Tanácsadói Iroda Bt. (QUALIKO) regarding the public procurement procedure published by the Hungarian National Police Headquarters (ORFK) and in the case of ÉTER-1, EUROLARES Gépészeti, Kereskedelmi és Szolgáltató Kft. (EUROLARES), RVI Magyarország Tanácsadó Kft. (RVI) and SCHNEIDER Investment Ipari Szolgáltató és Kereskedelmi Kft. (SCHNEIDER) regarding the public procurements published by the county police departments. For the infringements the GVH imposed a total fine of 148 390 000 HUF on the undertakings.

The local government of Komló published a public procurement for the implementation of solar energy production within the framework of KEOP (Környezet és Energia Operatív Program - Environment and Energy Operational Programme, one of the operational programmes intended to serve the overall objective, horizontal policies and the six thematic and territorial priorities of the New Hungary Development Plan – the National Strategic Reference Framework in EU terminology – applicable to the European Union’s budget projection period between 2007 and 2013). The National Police Headquarters, the Budapest Police Department and the county police departments published public tenders for the energetic modernisation of their buildings. All of the public tenders were simplified procedures, without prior publication of a contract notice, in which the caller requested offers from at least three small or medium-sized enterprises that were found suitable based on a preliminarily examination.

During dawn raids the GVH confiscated several e-mails and other documents as evidence of the infringements. Among the offers for the county police departments’ tenders there were three where even the name on the offer was different from the entering undertaking’s actual name. From this fact the GVH drew the conclusion that the project proposal was not made by the undertaking that entered it.

The GVH concluded the following:

  • in the case of the public tender in Komló, ÉTER-1 and AQUAPLUS negotiated their entering prices for the tender of Kenderföld-Somági Elementary School and Kindergarten and the Communities’ House of Komló;

  • ÉTER-1 and QUALIKO negotiated their entering prices and conditions in the tender of the Hungarian Police;

  • in the case of 5 county police departments’ (RFKs) tenders ÉTER-1 and 3 other undertakings colluded to assist ÉTER-1 to win the tenders as follows:

  • in the case of the tender published by the RFK of Bács-Kiskun County, ÉTER-1 negotiated its entering prices with RVI;

  • in the case of the tender published by the RFK of Békés County, ÉTER-1 negotiated its entering prices with RVI;

  • in the case of the tender published by the RFK of Csongrád County, ÉTER-1 negotiated its entering prices with RVI and EUROLARES;

  • in the case of the tender published by the RFK of Komárom-Esztergom County, ÉTER-1 negotiated its entering prices with SCHNEIDER and EUROLARES;

  • in the case of the tender published by the RFK of Fejér County, ÉTER-1 negotiated its entering prices with EUROLARES and RVI.

Consequently, the investigated undertakings had violated the prohibition of restrictive agreements for which the GVH imposed the following fines:

ÉTER-1                                        16 600 000 HUF     (approx. 54 000 EUR)

EUROLARES                             14 400 000 HUF     (approx. 47 000 EUR)

RVI                                                9 800 000 HUF     (approx. 32 000 EUR)

QUALIKO                                       590 000 HUF     (approx. 2 000 EUR)

SCHNEIDER                              30 600 000 HUF     (approx. 100 000 EUR)

AQUAPLUS                               76 400 000 HUF     (approx. 248 000 EUR)

The GVH based the calculation of the basic amount of fine on three times the amount of the winning bid and considered aggravating and mitigating circumstances. The GVH took into account, among other things, the following facts:

  • market sharing in a public procurement procedure is one of the most serious competition law infringements as it not only compromises the interest of the publisher of a tender but also severely damages the public interest;

  • the undertakings under investigation had a significant combined market share having regard to the restricted procedures;

  • the implemented market-sharing arrangement was successful, the market impact attributable to the practice of the undertakings under investigation had actually occurred, as ÉTER-1 won the tenders;

  • in the case of the projects in Komló the contract between ÉTER-1 and the council of Komló did not enter into force, thus the tender did not have an actual market effect.

In the case of ÉTER-1 the GVH also considered the fact that the undertaking not only participated in the restrictive agreements but actively organised them.

Case number: Vj-65/2012.

Budapest, 4 February 2015

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postal address: 1391 Budapest, 62. POB 211
Tel: (+36-1) 472-8902
Email: 

http://www.gvh.hu

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The Hungarian Competition Authority authorised the sale of VidaNet’s network in Budapest’s VIII district

The Hungarian Competition Authority (GVH) authorised Magyar Telekom Plc.’s acquisition of VidaNet Kábeltelevíziós Plc.’s (VidaNet) established network in Budapest’s VIII district and its gaining of control over the clientele connected to the network.

The established network in district VIII which falls under the transaction is comprised of the cable telecommunication network and its associated technical instruments and subscribers.

While investigating the horizontal effects of the concentration, the GVH investigated the actual and potential presence of the above-mentioned groups of undertakings in Budapest’s VIII district. In its decision, the GVH concluded that the authorisation of the acquisition would only result in a minimal increase in the concentration in relation to cable telephony, internet and program broadcasting, and that it would not reach a level that would raise competition concerns, having regard to the market shares of the other companies in the market. Additionally, competition concerns could be unequivocally ruled out in the mobile internet services.

The GVH did not identify any other detrimental vertical or portfolio effects, and there was also no sign of any conglomerate effect.

Taking into account of all the above-mentioned factors, the GVH authorised the transaction.

As a result of its delayed notification, the GVH fined Telekom a total sum of 100,000 HUF (cca. 320 EUR). When calculating the amount of the fine the GVH took into account the fact that although the acquirer was 2 days late, it had voluntarily filed the claim, and that the short duration of the delay and the lack of competition concerns excluded the possibility that the acquirer may have wanted to keep the transaction a secret. Consequently, the GVH calculated the daily amount of the fine as a quarter of the maximal fine of 200,000 HUF which can be imposed on a daily basis on an undertaking.

Case number: Vj-52/2014

Budapest, 22 January 2015

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postal address: 1391 Budapest, 62. POB 211
Tel: (+36-1) 472-8902
Email: 
http://www.gvh.hu

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Fines imposed on cartel in public procurement

According to the GVH’s (Hungarian Competition Authority) decision OTYS ÚTTECHNIKA Kft. (OTYS), ÚT-GARANTOR Kft. (ÚT-GARANTOR) and Kristály-Vár Építési, Kereskedelmi és Szolgáltató Kft. (Kristály-Vár) had agreed upon the winner of the public procurement published by the council of Nagylóc, and OTYS and ÚT-GARANTOR had also agreed on the public procurement of the council of Szécsényfelfalu before entering their bids. The GVH imposed a total fine of 43 560 000 HUF (approx. 137 000 EUR) on the three undertakings.

The council of Nagylóc published a public procurement (“Urban development related to water damages”) on 25 June 2012 and the council of Szécsényfelfalu published a public procurement (“Urban reconstruction in flood-hit settlements”) on 23 April 2012. The tenders were mainly for road construction and road reconstruction operations.

The GVH found that in the case of the tender of Nagylóc:

  • OTYS prepared the offer of ÚT-GARANTOR and Kristály-Vár

  • ÚT-GARANTOR and Kristály-Vár entered with the offer prepared by OTYS

  • ÚT-GARANTOR and Kristály-Vár, in accordance with OTYS, refrained from entering a real, competitive offer

In the case of the Szécsényfelfalu tender the GVH concluded that OTYS and ÚT-GARANTOR had made contact before entering their bids to discuss documents that were needed for the general contract offer and that OTYS had entered a cover-bid in order to favour ÚT-GARANTOR. Consequently, the two undertakings were engaged in collusive market behaviour.

The undertakings under investigation violated the prohibition of restrictive agreements for which the GVH imposed the following fines:

ÚT-GARANTOR           18.650.000 HUF (approx. 59 000 EUR)

OTYS                              18.650.000 HUF (approx. 59 500 EUR)

Kristály-Vár                    6.260.000 HUF (approx. 20 000 EUR)

The GVH based the calculation of each fine on – as relevant turnover – three times the amount of the winning bid and considered aggravating and mitigating circumstances.

The GVH took into account, among other things, the fact that market sharing in a public procurement procedure is one of the most serious competition law infringements as it not only compromises the interest of the publisher of a tender but also severely damages the public interest. Additionally, as the implemented market-sharing arrangement was successful, the market impact attributable to the practice of the undertakings under investigation had actually occurred.

Case number: Vj-48/2013

Budapest, 13 January 2015

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postal address: 1391 Budapest, 62. POB 211
Tel: (+36-1) 472-8902
Email: 
http://www.gvh.hu

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Proceeding initiated against Monsanto Hungária Kft.

The Hungarian Competition Authority (GVH) initiated a competition supervision proceeding against Monsanto Hungária Kft. for an alleged violation of the prohibitions of misleading advertising and misleading of business partners.

The GVH launched its investigation on 19 December due to the suspicion that the undertaking’s behaviour during the promotion of its DEKALB oilseed in 2014, in which it provided unclear, incomprehensible, ambiguous information about its winter oilseed trial, was presumably capable of influencing its business partners’ behaviour.

The GVH suspects that the undertaking under investigation has presumably violated, by the above described conduct which was carried out until 30 June 2014, the provisions of the Act on Business Advertising Activity. Due to legislative changes in which the provisions relating to misleading advertising and misleading business partners were incorporated into the Hungarian Competition Act, the latter Act was applied to the undertaking’s conduct which was carried out after 1 July 2014.

The completion of the procedure is necessary in order to protect the public interest, having regard to the fact that if the undertaking’s conduct is found to be unlawful it will have affected customers throughout the whole territory of Hungary.

The initiation of the competition supervision proceeding does not mean that the undertaking in question has actually committed an 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-123/2014.

Budapest, 10 January 2015

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Mail: 1054 Budapest, V. ker. Alkotmány u. 5.
Postal address: 1391 Budapest, 62. POB 211
Tel: (+36-1) 472-8902
Email: 
http://www.gvh.hu

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