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The competition supervision procedure against Airbnb has been closed with the acceptance of commitments

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter  GVH) accepted the commitments of Airbnb Ireland, private unlimited company (hereinafter Airbnb), which operates an online marketplace for renting and booking travel accommodation. According to the commitments undertaken in the proceeding, the company has to modify the information that it provides to consumers relating to its fares. As a result of the commitments undertaken by Airbnb, the GVH did not establish an infringement and therefore no fines were imposed.

The GVH launched a procedure against Airbnb in October 2016, on the presumption that the information provided by Airbnb in connection with its fares and costs was misleading to consumers.

The GVH may terminate a competition supervision proceeding without establishing that an infringement has been committed based on the voluntary commitments made by an undertaking. In the present case, the GVH required Airbnb on several occasions to amend and complete the commitments it had provided, in order for the given commitments to be deemed by the GVH as being sufficient to bring the undertaking’s behaviour into line with the relevant legal provisions, thereby enabling the public interest to be protected.

Airbnb undertook, among others, that on its Hungarian websites

  • consumers would be provided with (after stating their date of travel) the total price, including all the charges (eg. cleaning  charge, and the price to be paid for each additional guest), on all electronic devices (desktop computer, tablet or mobile phone);

  •  consumers would receive, when searching for accommodation without providing the exact date, a warning message highlighting the fact that the shown final price, which may increase as a result of tourist taxes, will only be provided once the exact date and number of guests are stipulated.

Furthermore, the submitted commitments also require the undertaking to bring to an end the differences resulting from the application of a conversion fee and the use of rounding.

As a result of the information that must now be provided to consumers on the basis of the accepted commitments, consumers searching for accommodation will now receive additional information and also more accurate information relating to prices, with the result that they will be able to make more conscious decisions.

Airbnb is obliged to implement the steps prescribed within 120 days of receipt of the decision and to prove its implementation to the GVH. Compliance with the commitments will be checked within the framework of a post-investigation by the GVH.

Number of the case: VJ/89/2016

Budapest, 19 June 2018

Hungarian Competition Authority

 

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

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

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The GVH terminated its cartel proceeding on the market of household paper products

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) terminated its proceeding initiated against AUCHAN Magyarország Kereskedelmi és Szolgáltató Kft., DM-Drogerie Markt Kereskedelmi és Szolgáltató Kft., METRO Kereskedelmi Kft., ROSSMANN Magyarország Kereskedelmi Kft., ESSITY HUNGARY Kereskedelmi Kft., SPAR Magyarország Kereskedelmi Kft., TESCO-GLOBAL Áruházak Zrt. and VAJDA-PAPÍR Gyártó Kereskedelmi és Szolgáltató Kft.

The GVH investigated whether the manufacturers which were parties to the proceeding, namely ESSITY HUNGARY Kereskedelmi Kft. and VAJDA-PAPÍR Gyártó Kereskedelmi és Szolgáltató Kft., had engaged in a concerted practice to raise prices, agreeing on the extent and timing of these increases, in relation to a number of their paper products (e.g. paper tissues, toilet papers); furthermore, it investigated whether they had also shared with each other any other kind of sensitive business information. The evidence uncovered in the course of the proceeding did not support the presumption that the manufacturers had been engaged in unlawful discussions – which went beyond the scope of their existing legitimate business relations – during their meetings.

The investigation of the GVH also sought to ascertain whether the manufacturers mentioned above had been engaged in co-ordinations aimed at concerting their pricing or other activities resulting in concerted prices with their trading partners.

Based on the evidence uncovered during the proceeding, however, it could not be proven that the investigated retailers had concerted their behaviour by using the manufacturers as communication channels or mediators.

The facts supporting the suspected infringement could not be ascertained in a way that was substantive enough to result in a resolution; consequently, given that the continuation of the investigation was unlikely to bring further results, the Competition Council terminated the proceeding in respect of all parties.

 Case number: Vj/22/2015.

 Budapest, 28 May 2018

Gazdasági Versenyhivatal

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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Green light authorisation for the concentration of DIGI and Invitel approved by the GVH with an intervention concerning 41 municipalities and with a trustee assigned

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) approved, with the imposition of conditions and obligations, the acquisition of Invitel by DIGI. This was the first time in a merger procedure that an on-the-spot inspection without preliminary notification had been carried out.

At the end of August 2017, DIGI, a telecommunication services provider, (DIGI Távközlési és Szolgáltató Kft., hereinafter DIGI) announced its intention to the GVH to acquire Invitel, a telecommunications company (Invitel Távközlési Zrt., hereinafter Invitel). The GVH initiated a competition supervision proceeding based on the merger notification of DIGI/Invitel in order to investigate if the transaction would cause adverse competition effects on a number of concerned markets. Both undertakings concerned are important and active players on the Hungarian market of wired telecommunications, i.e. they provide wired, telephone, internet and wired broadcasting (TV) and other services for hundreds of thousands of subscribers.

Within the framework of a detailed investigation, the GVH assessed the possible competition effects of the transaction. In addition to the usual steps taken in such a procedure (request for information from the parties concerned, from the market players and from the counterparts, analysis of this information), for the first time within the framework of a merger procedure it took advantage of the opportunity that has been provided for in the Competition Act since 15 January 2017 to conduct an on-the-spot inspection without preliminary notification.

There was an overlap between the telecommunication networks of the parties concerned regarding 34 municipalities, from among which in the case of 16 the investigation of the GVH established that the transaction would result in a significant reduction of competition. After becoming acquainted with the preliminary concerns of the GVH, DIGI undertook to sell the networks acquired from Invitel as a result of the acquisition in the case of these 16 municipalities (this also included their infrastructures and existing subscriber contracts at the time of the sale) within 6 months after the closure of the notified merger. Within the framework of the divestiture process, DIGI is obliged to maintain the economic functioning and competitiveness of the networks and at the same time to refrain from bringing over subscribers. In order to ensure that DIGI fulfils the obligations mentioned above, a trustee was assigned by the GVH (as happened in the DDC/Readymix transaction).

Furthermore, the GVH considered it a possible horizontal effect that Invitel is present with its wired telecommunication services provided via its own network in 25 municipalities, while i-TV Digitális Távközlési Zrt., which belongs to the same group of undertakings as DIGI, provides television services via a network leased from another market participant, i.e. as a result of the concentration the number of providers carrying out such services as independent undertakings would decrease. DIGI undertook to terminate its lease contracts relating to wired telecommunication networks (and to refrain from their extension) in the municipalities concerned, and related to this, the prohibition of re-contracting and active marketing for a period of 1 year.

In conclusion, under the supervision of a trustee, DIGI is obliged to sell the networks acquired from Invitel in 16 municipalities within 6 months, and it is obliged to exit from the contracts relating to wired telecommunication networks which are independent from DIGI. The GVH, in its decision terminating the proceeding, prescribed the above-mentioned ex post conditions and obligations, and determined that if these conditions are satisfied any possible significant restriction of competition resulting from the concentration could be eliminated.

Case number: Vj/43/2017

Budapest, 10 May 2018

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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Netpincér undertook to modify its contracts signed with restaurants

The Hungarian Competition Authority (Gazdasági Versenyhivatal, hereinafter GVH) accepted the commitments of Viala Kft., which operates Netpincér, an online food delivery platform. According to the assessment of the GVH, the accepted commitments are suitable for resolving the established competition concerns, since they enable restaurants, under certain conditions, to offer lower prices on their own online platforms compared to the prices available on Netpincér.  Consequently, the restaurants are discouraged from continuing to offer more favourable conditions on other intermediary platforms. As a result of the commitments, the GVH expects stronger competition on the market of food delivery services, especially as regards to competition between the intermediators. As a result of the GVH accepting the proposed commitments, no competition infringement was established in the case, and therefore no fines were imposed either.

The GVH launched an investigation against the operator of the biggest food delivery platform, as it had presumably been applying competition restrictive clauses in its contracts concluded with restaurants. The undertaking had prescribed that the restaurants were obliged to offer their services under the same conditions (e.g. prices, reductions, delivery conditions) on Netpincér as applied on their own distribution channels (websites, pre-booking/pre-ordering via phone, leaflets). Although the contractual term did not expand to orders delivered through other food delivery platforms (i.e. the competitors of Netpincér), the GVH identified that unique conditions, especially unique prices, were applied on all the distribution channels. Namely, the restaurants were not interested in offering their services at lower prices through other online food delivery platforms compared to the prices offered on their own distribution channels, as they were afraid that this would result in consumers preferring to make food orders through food delivery platforms instead of through their own distribution channels. Orders made through food delivery platforms, as opposed to orders placed directly through the restaurants’ sales channels, place a greater financial burden on the restaurants, as the restaurants are required to pay commissions for the food delivery platforms.

In the course of the procedure, in order to remedy competition concerns, Netpincér undertook to modify its contracts signed with the restaurants.  Consequently, Netpincér no longer places an obligation on the restaurants to apply unique conditions to non-online channels of placing orders (e.g. pre-ordering via phone) or to unique promotions.

Case number: Vj/89/2015

Budapest, 27 April 2018

Hungarian Competition Authority

Information for the press:

Email: ; press@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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Apple was fined for withholding significant information

The Gazdasági Versenyhivatal (GVH – the Hungarian Competition Authority) deemed it unlawful that Apple Inc. (Apple) did not inform customers about certain significant features of its Wi-Fi-Assistant service. As a result of the ‘WiFi-Assistant’ function, mobile phones automatically connected to mobile Internet networks when the Wi-Fi signal was weak, which resulted in an increase of mobile data traffic and the appearance of additional costs. The GVH imposed a fine of HUF 100 million for the infringement and it also prohibited Apple from the continuation of its unlawful behaviour.

The GVH investigated Apple’s consumer information that appeared from 2015 in connection with the ‘WiFi-Assistant’ when iOS 9 was installed or updated on phones, and the same information in relation to online platforms.

The undertaking introduced, as a default setting, the iOS operating system’s new ‘WiFi-Assistant’ function, which automatically became active when downloading the operating system or updating to it. The main feature of this function is that the device – in order to improve user experience – automatically switches to a mobile data network when the Wi-Fi signal is weak or not sufficiently strong; when previously it only switched to a mobile network – without the direct action of the user – when it did not find a Wi-Fi signal at all. The option for turning off the ‘WiFi-Assistant’ function has to be found by the users, i.e. it requires active action on their part.

The GVH established that Apple had pursued an unfair commercial practice, as it did not sufficiently bring the automatic activation of the ‘WiFi-Assistant’ feature to the attention of consumers when they were installing the operating system or updating to the operating system, despite the fact that taking into account the properties of the platform this would not have been cumbersome. This might have resulted in unexpected excess mobile traffic and consumers unexpectedly exceeding their monthly data quotas prematurely, thereby causing their services to be slowed down or requiring the purchase of additional data in order to allow them to retain their former usage habits.

According to the GVH, the ‘WiFi-Assistant’ constitutes a function of the operation systems of Apple devices (and of Apple devices). Consumers do not have prior knowledge and experience of this 'by default' function, and this might have an unfavourable effect on user-experience (relating to the general positive impression and advantages expected from the trademark). There might have been an expectation that Apple would inform its consumers about the function and its characteristics directly when the operation system was put into practice and updated.

The GVH calculated the fine taking into consideration all of the aspects of the case, in particular the gravity and duration of the infringement, the gains obtained as a result of the infringement, and the market position of the infringer; furthermore, the imputability, the cooperative behaviour of the infringer, recidivism, and the frequency of the violation were also taken into account.

The GVH concluded that Apple must provide information to its consumers, in a manner that is unequivocally clear, that due to certain features of the ‘WiFi-Assistant’ they might be exposed to unforeseen data traffic and even to extra costs. Apple has to inform its consumers about all this information when Apple devices are put into operation, when iOS updates are being made, or when issuing any kind of online information connected to the ‘WiFi-Assistant’ service.

Case number: Vj/32/2016.

Budapest, 18 April 2018.

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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