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The total amount of the fine imposed by the GVH for price fixing, market sharing and exchange of business information on the estate agent sector has been reduced as a result of successful settlement negotiations

According to the decision of the Gazdasági Versenyhivatal (Hungarian Competition Authority – GVH), Duna House Holding Nyrt. (DHH), Otthon Centrum Holding Kft. (OCH), Duna House Franchise Szolgáltató Kft. (DHF) and Otthon Centrum Franchising Tanácsadó Kft. (OCF) had concerted their pricing policies and exchanged confidential business information in the framework of their cross-selling cooperation. The GVH considered the determination of the minimum commission rates and the allocation of areas of operation for members of the franchise network by DHF and OCH to infringe the law. The total amount of the fine imposed for these infringements was 75.68m HUF (cca 245,000 EUR).

In the course of its investigation, the GVH found that the two networks had entered into agreements between April 2013 and June 2014 about

a.       sharing their stock of the real estates to be sold under exclusive commission –thereby significantly increasing the two networks’ incomes and strengthening their market positions;

b.      the commission fees (in fixed amount and in percentage) on the territory covered by the cooperation;

c.       determining the minimum amount and percentage of the commission payable on the seller side, and the amount of discount to be granted under cross-selling cooperations;

d.      the exchange of certain sensitive business information – e. g. data on some of the sales processes and the stock of commissions of DHF and OCF.

In its decision, the GVH stated that the contracts concluded between DHF and the members of its network of real estate agents, as well as between OCF and members of its network of real estate agents - either through the stipulation of prohibitions or the application of sanctions – had hindered the free determination of prices by the franchisees and prohibited the acceptance of commissions on the territory of other franchisees, between 2003 and 2015 in the case of DHF and between 2004 and 2015 in the case of OCF.

When calculating the amount of the fine, the GVH took into account as relevant turnover the prorated amount of fees (according to time) that was collected through the operation of such a franchise-system.

The GVH also considered the fact that the undertakings are currently significant market participants, although they had small market share at the beginning of the infringement.

In the case in question the GVH invited the undertakings to indicate whether they were interested in engaging in a settlement procedure, in order to enable the proceeding to be concluded in a swift and effective manner. The undertakings presented their settlement submissions, in which, among other things, they voluntarily admitted the infringement; therefore the GVH reduced the fine imposed by 30% – based on the new rules of the Hungarian Competition Act applicable after 16 December 2016.

According to the settlement procedure, the GVH reduces the fine to be imposed by 10-30% if the undertaking under investigation admits the infringement on the basis of the revealed evidence; moreover, it must also waive its rights to extensive access to files, to make a statement, to a hearing and to seek a legal remedy. This procedure facilitates the conclusion of the proceeding in a more rapid and less resource intensive manner. The settlement procedure may result in significant cost savings, not only for the competition authority but also for the undertaking. Additionally, the 30% fine reduction can be increased if the undertaking takes part in the leniency programme, which may even result in a 50% reduction of the fine. More information regarding the settlement procedure is available here and other means of cooperation with the GVH is available here (available only in Hungarian).

Case numbers: Vj/57/2014., Vj/74/2014., Vj/75/2014.

Budapest, 10 January 2017

 

Hungarian Competition Authority

 

Further information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: ,
http://www.gvh.hu

 

Further information:

GVH Inquiries

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

 

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Reduced administrative service fees, more effective merger control, increased possibilities for reduction of fines – new regulations of the Hungarian Competition Act enter into force

The recent amendment to Act LVII of 1996 on the Prohibition of Unfair Trading Practices and Unfair Competition (Tpvt., Competition Act) achieves a number of objectives: administrative service fees are reduced by 75 %, the effectiveness of merger control will increase, clients willing to cooperate with the Hungarian Competition Authority will receive more help from the authority, and the regulations of the Directive on Antitrust Damages Actions have now been incorporated into Hungarian law

As a result of the new regulations entering into force, proceedings opened upon request regarding the permission of the merger of undertakings will no longer be applicable, and in the future a notification of the undertakings will only be required if the merger exceeds the prescribed threshold limit, and the authority will open a proceeding ex officio to investigate its effects on competition. The authority must settle the notification within 8 days. Regarding the notification, an administrative fee of only 1 million HUF must be paid when submitting the application, as opposed to the former fee of 4 million HUF.

The threshold limits have also been modified: the former 500 million HUF “net turnover of each of at least two of the groups of undertakings concerned” has been increased to 1 billion HUF, while the 15 billion HUF aggregate net turnover of all the groups of undertakings concerned has remained unchanged. According to the act, only the Hungarian turnover, that is the inland sales must be taken into account when calculating the combined net sales revenues.

The GVH receives a new entitlement in connection with the raising of the threshold limits, since mergers under the threshold limits mentioned above can also be investigated, if the combined net sales revenues of the undertakings involved are above 5 billion HUF, and the merger is likely to affect competition. In order to ensure that this law is enforced, undertakings involved in such mergers must notify the acquisition; in case of a failure to notify the authority is empowered to open a proceeding ex officio only within 6 months after the execution of the merger.

In the context of all these changes, the amendment also enables on-site inspections to be carried out in concentration cases, if a reasonable suspicion exists that the transaction in question would be implemented in the absence of the GVH’s authorisation, or the notification of the concentration conceals essential information or contains misleading information.

There are a large number of ways in which undertakings can cooperate with the GVH in order to foster compliance. As a result of the amendment of the Competition Act, under the framework of the settlement procedure the GVH may now reward an undertaking with a fine reduction of 30 % (as opposed to the previously available 10 %).

The amendment makes it possible for full immunity or for a fine reduction of up to 50 % to be granted also in the case of vertical agreements aimed at resale price maintenance. In addition to this, the “agreements of minor importance” characterisation of these vertical agreements (below 10 % market share) is no longer applicable.

By amending the Competition Act, the legislators have fulfilled their obligation, according to which the provisions of the 2014/104/EU Directive “on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union” had to be incorporated into the national law by 27 December 2016.

Budapest, 22 December 2016

 

Hungarian Competition Authority

 

Further information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: ,
http://www.gvh.hu

 

Further information:

GVH Inquiries

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

 

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The Curia of Hungary confirmed the cartel of Banks

On 13 December 2016 the Curia of Hungary confirmed, as a result of the judicial review of case Nr. Vj/74/2011/873 concerning the decision of the Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH), that Hungarian banks had concerted their strategies to restrict the full prepayment of foreign currency loans. The GVH in its decision delivered on 19 November 2013 imposed fines amounting to a total of 9,488,200,000 HUF (approx. 31.6 million Euro) on 11 financial institutions, as they had coordinated their strategies between September 2011 and January 2012 in order to reduce the full prepayment of foreign currency based mortgages on fixed exchange rates by limiting access to loans which would have been suitable to redeem these loans (See: 9,5 billion HUF fine in the full prepayment loan banking case). According to the judgment of the Curia the GVH must reopen the case and carry out a new proceeding but only in order to determine the amounts of the fines imposed on 8 of the banks involved in the case. A detailed written explanation of the judgment will be published at a later date by the Curia.

Due to the lack of a written judgment by the Curia, the GVH cannot elaborate at this point the exact further steps that it must undertake as part of its further investigation aimed at clarifying the facts of the case. Nevertheless, the GVH aims to close the case as soon as possible. Until a written version of the judgment of the Curia is available, questions regarding the repayment of the imposed fines shall not be considered.

Case number: Vj/74/2011.

Budapest, 14 December 2016

Hungarian Competition Authority

Further information:
Dr. Andrea BASA
Spokesperson
Mail: H-1054 Budapest, Alkotmány u. 5.
Tel: (+36-1) 472-8902
Email:

http://www.gvh.hu

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The case of copyright collection societies has been settled with the acceptance of commitments that grant consumers the possibility to reclaim the blank carrier media remuneration

The Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH) has accepted the commitments of ARTISJUS Magyar Szerzői Jogvédő Iroda Egyesület, Előadóművészi Jogvédő Iroda Egyesület, Filmjus Filmszerzők és Előállítók Szerzői Jogvédő Egyesülete, Hungart Vizuális Művészek Közös Jogkezelő Társasága Egyesület and Magyar Hangfelvétel-kiadók Szövetsége Közös Jogkezelő Egyesület (hereinafter jointly referred to as ‘collection societies’) according to which the blank carrier media remuneration will be more precisely determined for both its obligors and its obligees and consumers will be given the opportunity to reclaim the blank carrier media copying remuneration.

The copying of copyrighted music, films, images and literary works is permitted for free for private purposes. However, ‘fair compensation’ must be paid for this freedom in the form of a lump-sum remuneration which is payable on the sale of blank video and audio carrier media. This remuneration is called the blank carrier media remuneration. The collection societies – authorised by law – determine the blank carrier media remuneration every year in their tariff announcements. The distributors of blank video and audio carrier media are obliged to pay the blank carrier media remuneration to Artisjus (which acts as the enforcer of this remuneration among the collection societies), which divides the received amount among the authorised authors. The fee that must be paid for the blank carrier media remuneration is based on the type of content copied (for example, whether it is music, film, literary work, etc.), with each type of content subject to a different rate to be paid to the actors. When determining the amount of the lump-sum fee to be paid for the blank carrier media remuneration, a mix of the copied content is taken into account and the calculation is based on the market researches and analyses made by the collection societies.

During its inspection, the GVH found that the collection societies – authorised by law and having a legal monopoly to determine, collect and divide the blank carrier media remuneration – had not, since 2007, made any adjustments to reflect the changes to content consumption habits (e.g. when specifying the fee, copying for music purposes remained well overrated), with the result that the determination of the blank carrier media remuneration may have been distorted due to deficiencies in the methods of their market researches and economic analyses; consequently, this may have damaged the interests of both the obligors and the obliges of the remuneration, and ultimately those of the consumers as well.

The parties offered commitments to remedy the GVH’s concerns. The GVH accepted these commitments in its decision and requested the parties to remedy the deficiencies present in their market researches and economic analyses, so that when they are determining the blank carrier media remuneration that is to be paid they can take into account the changes to content consumption patterns, even if this necessitates abandoning obsolete methods and employing new content consumption technologies.

Through the acceptance of the commitments, the possibility of reclaiming blank carrier media remuneration that has been paid has been established in Hungary. In the European Union, following the Netherlands, Hungary is the second Member State to provide this opportunity to those consumers who exclusively copy their own, professional contents to the blank data carriers. The legal right to claim a refund has been inserted into their 2017 publication on royalties. Furthermore, the collection societies have undertaken in the event of a legal dispute between a consumer requesting a refund and the concerned collection society, to participate in the proceeding of the Consultative Body operating under the Hungarian Intellectual Property Office in order to settle the dispute. The collection societies have also undertaken to finance the fees of the proceedings of the Consultative Body so that consumers may use the dispute settlement forum for free.

Additionally, the collection societies have undertaken to commission an education campaign lasting 3 years for a budget of 45 million HUF (around 150,000 EUR) to publicise the refund opportunity. The targeted campaign, which will be repeated annually, will run online and also on printed media, both of which are independent from the collection societies.

 

Case number: Vj/15/2014.

Budapest, 9 December 2016

Hungarian Competition Authority

Further information:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: ,
http://www.gvh.hu

 

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The President of the Republic appointed the leadership of the GVH

The President of the Republic, János Áder, appointed the current president of the Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority), Miklós Juhász, to be the president of the Authority effective 2 November 2016. The two vice presidents of the GVH for the next six years shall be László Bak and András Tóth. András Tóth will again fulfil the duties of the president of the Competition Council as well.

The top leaders of the GVH appointed today wish to continue their work which they began in the spirit of transparent and predictable law-enforcement, and the enhancement of the of the Authority’s client-friendly nature, within which

  • the GVH regards as a main priority the fast and efficient conclusion of merger authorisation proceedings, in order to lessen the risks associated with transactions. While in 2010 the average time it took to conclude a phase one merger was 103 days, this was reduced to only 19 days in 2015. In more complicated cases, the time taken to conclude proceedings has reduced to less than a third of the average time taken in 2010, which was 186 days;

  • pre-notification contact in merger cases and a sanction in the form of a warning for an SME committing an infringement for the first time, have been introduced;

  • when determining the amount of the fine to be imposed in a particular case, the GVH now has the possibility to consider, as a mitigating factor, the effort made by the undertaking in question to comply with competition law;

  • since 2010, the GVH has published a total of 40 notices, guidelines and handouts, and has also published a Commentary on the Competition Act;

  • in recent years, a number of IT developments have been implemented, the most recent of which allows parties to easily book appointments online for access to the file.

The main tasks of the GVH, among others, for the next period will be to

  • facilitate the law-abiding behaviour of market operators by carrying out its activities in a transparent and predictable manner;

  • ensure that in the majority of cases access to the file is available remotely via a secure data connection, without the physical presence of the concerned parties;

  • introduce the possibility of electronic administration applied in the procedures.

The GVH still regards as a priority to

  • develop merger procedures and to conclude proceedings within a shorter period of time (with this in mind, the GVH has also drafted proposals on changes to the Competition Act);

  • facilitate the orientation of market operators by publishing notices and the decisions and position statements of the Competition Council;

The future focus of the GVH’s consumer policy will be on advertising in the online space and on social media, as well as on more actively analysing communication practices related to new technologies; furthermore, it will focus on unfair commercial practices having a detrimental effect on the process of competition. As regards to private enforcement, the GVH will seek to encourage undertakings to provide active reparation to injured parties in the course of its competition supervision proceedings in order to avoid costly and lengthy litigation.

The GVH is headed by a President, who is assisted by two vice presidents. One of the vice presidents is responsible for General Affairs and one is entrusted with the responsibilities of the Chair of the Competition Council. The three leaders are appointed for a period of six years.

Miklós JUHÁSZ was employed by the Pest Central District Court as a judge between 1976-1985, and he also served as the Acting Vice President at the XVIII-XIXth District Court for two years. He later acted as a legal counsellor of a Hungarian-German Joint Venture Company. From 1990 he worked as an attorney, before opening his own law firm in 2001. In 2010 he was appointed as the president of the Hungarian Competition Authority.

András TÓTH worked for the GVH between 2002-2007, before joining a leading American law firm in 2007 as an attorney. As a Vice President of the GVH and the Chair of the Competition Council he was appointed for the first time in 2010. Since 2010 he has also held lectures as an assistant professor at the Károli Gáspár University of the Reformed Church.

László Bak obtained his law degree in 2004 from the Péter Pázmány Catholic University. In 2009 László obtained a Master of Laws (LL.M.) in German law from the Ludwig-Maximilians-Universität in Munich, and also gained a PG Diploma in EU Competition law from King’s College London in 2014. He was admitted to the Budapest Bar and subsequently worked as a self-employed lawyer. He joined the Gazdasági Versenyhivatal in November 2010 and became chief of staff. In the past six years he has gained experience in several departments of the GVH and has held a number of positions, initially holding the position of chief of staff before becoming head of litigation in 2014. Since March 2015 he has been responsible for leading the Legal Section of the GVH.

 

 

Budapest, 24 October 2016

Hungarian Competition Authority

Information for the press:
Andrea BASA
Spokesperson
Alkotmány u. 5., H-1054 Budapest,
Tel: +36 1 4728902
Mobile: +36 30 6186618
Email: basa.andrea@gvh.hu , press@gvh.hu
http://www.gvh.hu

Further information:
GVH Costumer Service
tel: (+36-1) 472-8851
e-mail:
http://www.gvh.hu

 

 

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