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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Proceeding terminated against printing companies

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) has terminated its proceeding against ANY Biztonsági Nyomda Nyrt., Díjbeszedő Nyomda Zrt. and Díjbeszedő Holding Zrt. for an alleged infringement of the prohibition of restrictive agreements.

Based on the evidence available, the GVH investigated whether the above-mentioned undertakings had engaged in restrictive behaviour during the tenders of Szerencsejáték Zrt. for the supply and production of thermal paper and utilities and the tenders of KSH and E.On from 2007.

During the course of its investigation, the GVH determined that the undertakings in question had participated in the KSH and E.On tenders together as subcontractors or in a consortium, which explains the presumed behaviour. As regards to the Szerencsejáték Zrt. tenders, the GVH did not reveal any direct evidence which proved that the undertakings had concluded a restrictive agreement or had agreed upon the winning tenderer, prices or other conditions.

Based on the available information (the undertakings entering tenders together, and maintaining a regular business connection), the GVH determined that the relationship between the undertakings was more cooperative than strongly competitive during the investigated time period. The Authority did not reveal any information that would have changed the assessment of the investigated behaviour and the proceeding was terminated due to lack of proof.

Case number: Vj-1/2014.

Budapest, 5 August 2014

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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Fine imposed by the GVH for restrictive agreement

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) stated that Samsung SDI (Samsung SDI Co. Ltd. in joint and several liability with  SAMSUNG SDI Germany GmbH and SAMSUNG SDI Magyarország Gyártó és Értékesítő Zrt.), LG Philips Displays Holding B.V. and Technicolor SA had violated the Hungarian Competition Act when they directly and indirectly fixed the prices of colour television tubes, shared buyers and markets, limited capacities and shared non-public strategic information relating to prices, production and sales. Due to the violation of the law the GVH imposed a fine of 303,000,000 HUF (1,000,000 EUR).

 

The proceeding was initiated by the GVH in 2008 as a result of a leniency application, in order to investigate the alleged cartel, operating between 1 January 1997 – 30 April 2004, among producers of TV and computer monitor tubes. Moreover, the GVH investigated whether the conduct of the undertakings also extended to include the following: the exchange of sensitive business information concerning data on prices, quantities sold, demand and capacity utilisation; price fixing, including the setting of prices based on types of consumers and geographical characteristics; furthermore the sharing of consumers, quantities sold and market shares; limitation of output, coordination and limitation of production and capacities. Following the start of the proceeding, two further groups of undertakings submitted leniency applications. Since the European Commission also proceeded in the case, the Hungarian proceeding covered only the effects in Hungary during the Hungarian pre-accession period.

The leniency applicants provided the GVH with numerous pieces of documental evidence of meetings taking place in Europe and Asia (mainly reports and notes about the meetings, calendar entries and documents proving the travels), the processing of which was exceptionally time-consuming, which is in part responsible for the proceeding going on for so long. Based on the evidence and the descriptions of the leniency applicants, it could be established that at regular bilateral and multilateral meetings the producers coordinated the prices of the television tubes, the degree of price increases, the sharing of the markets and certain customers, the restriction of the output, and that they also exchanged information on all of these matters. However, the GVH could only consider those meetings that demonstrably concerned European markets – and, within those markets, Hungary –, since the jurisdiction of the GVH only covers the investigation of conducts that also affect the Hungarian market.

Based on the above, the GVH established that through their competition restrictive conducts the undertakings were engaged in a single, continuous and complex infringement, the aim of which was to maintain and increase the profitability of the participants and to restrict and exclude price competition.

Because of the above-mentioned unlawful conduct the GVH imposed a fine of 303 million HUF (1,000,000 EUR). With respect to the leniency application submitted by the undertaking, a fine was not imposed against Samsung SDI and a fine was also not imposed against LG Philips Displays Holding B.V., due to a lack of information pertaining to its net turnover.

The proceeding was terminated against other producers for the following reasons:

  • the limitation period elapsed, since evidence of their involvement in the cartel was provided only for a shorter past period,
  • direct engagement in the single, continuous and complex infringement and the liability of the parent company and/or subsidiaries under the proceeding was not proved,
  • the business entity most probably terminated without a legal successor.

The GVH terminated the proceeding in connection with conduct related to colour television monitor tubes because of a lack of evidence – in particular as regards to the amount of time that had passed since the conduct.

Case number: Vj-45/2008.

04 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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