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The competition supervision procedure initiated against PayPal has ended with the acceptance of commitments

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) accepted the commitments of the online payment method provider, PayPal. On the basis of the commitments, the undertaking is obliged to change the information that it provides to its consumers. In this way consumers will be able to decide more easily about the exchange rates applied to their payments requiring conversion. Having regard to the commitments, the GVH did not establish any infringement in the case and therefore did not impose a fine on the undertaking.

The GVH initiated a proceeding in 2017 March against PayPal (Europe) S.á.r.l. et Cie, S.C.A. because it was likely that the information provided by the payment service provider was both outdated and incomplete regarding the exchange rates applied to payments requiring conversion. The information provided was also inadequate as regards to the options to  modify the exchange rates. Consequently, the GVH considered the information of the undertaking to be misleading to consumers.

PayPal carries out conversions for its consumers at its own exchange rates, however, consumers may also choose to convert their payments at the bank rates applied by their card-issuing banks. Since the exchange rates applied by certain service providers are different, the decision of the user can lead to different purchase prices, which means that it is important that proper and timely information is provided to consumers when they are using such services.

PayPal simplified the operation of its website during the procedure, and undertook to change the information provided to Hungarian users at the time of purchase within 4 months. Consequently, the undertaking will display the exchange option of the card issuer with its own exchange rate. If a consumer decides to use the exchange rate applied by his/her card-issuing bank the undertaking shall advise the consumer to check their bank notification. Furthermore, PayPal undertook to make the contracts it concludes with consumers more transparent.

When making its decision the GVH considered it a significant factor that the commitments of the undertaking directly promote  efficient competition, specifically as regards to the ability to choose and change service providers. The GVH shall monitor the fulfilment of the commitments in the framework of a post commitment investigation.

Case number: VJ/18/2017.

Budapest, 14 June 2019

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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The GVH imposed fines amounting to a total of HUF 70 million for participation in a cartel concerning the review of online cash registers

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) established that Irodatechnikai és Pénztárgép Szervizek Országos Ipartestülete (Hungarian Association of Office Technology and Cash Register Services, hereinafter IPSZOI) and a number of distributors and service companies had engaged in unlawful behaviour when they coordinated the prices for the annual review of cash registers and the related distribution fees, and furthermore, when they also published related recommendations. The GVH imposed fines amounting to a total of HUF 70 million (cca 210 thousand EUR) on the undertakings for the infringements.

The investigation of the GVH revealed that in 2014 IPSZOI set recommended prices for the annual review of online cash registers introduced at that time and communicated these prices to its members. The GVH found that the recommendations could be qualified as unlawful as their aim was to restrict economic competition.

The GVH also noted that parallel to the behaviour of IPSZOI, and partly in collaboration with it, several online cash register distributor undertakings and service providers held consultations. The participants jointly determined the prices of the annual review and the related distribution fees (hologram sticker). Most of the agreed prices were actually introduced and applied on the market by the participants.

The GVH imposed fines for the two related infringements on IPSZOI and the undertakings involved in the price determination: namely on ECR-Trade Pénztárgép Zrt, Micra-Metripond Kft, Montel Informatika Kft, PFK Kereskedelmi és Szolgáltató Kft, ATC Aircom Kft, Juta-Soft Kft and Pezo Info Kft.

In the case of one distributor the GVH did not impose a fine thanks to the cooperation of the undertaking, in the framework of which it submitted a leniency application, acknowledging the infringement and voluntarily attaching supporting evidence. For this reason, the GVH waived the fine that could have been imposed on the undertaking.

Case number: VJ/110/2015.

Budapest, 12 June 2019

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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The Hungarian Competition Authority once again quantifies the benefits of its activities

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) has published, for the fourth time, an economic analysis evaluating the financial benefits that consumers have obtained as a result of the protection of competition. According to this analysis, thanks to the activity of the GVH between 2013 and 2018, consumers saved more than six times than the cost of operating the GVH.

The calculation is based on the price constraining effect of competition: the interventions of the GVH forbidding anticompetitive conducts and preventing concentrations harmful to competition result in financial benefits for consumers as they are saved from the additional expenditure that they would otherwise face in the absence of such intervention. This can be illustrated by the following example: if consumer prices increase due to the collusion of certain undertakings, the elimination of this cartel will result in a price reduction of at least 10% for consumers, according to the internationally accepted methodology. The methodology, which has previously been reviewed by independent experts of The Institute of Economics of the Hungarian Academy of Sciences, follows the practices of developed countries’ competition authorities, and also relies on the OECD guide for assessing the impact of competition authorities' activities.

The above-mentioned sum is based on a conservative, prudent estimation. The estimation is based on the premise that, without the intervention of the GVH, the prices would be higher only for a period of two years and only by 5-10 per cent in the case of products and services which are affected by restrictive conducts and mergers which lead to a significant reduction of competition. Nevertheless, international researches show that prices in a market encumbered with cartels can increase by up to 8-44%.

It should be noted that the analysis does not cover other activities of the GVH; therefore, it does not include estimations on gains achieved from, among others, proceedings relating to consumer protection or the deterrent effect of proceedings. Consequently, the actual consumer savings are likely to be significantly greater, or possibly even several times higher than what has been estimated.

The full analysis can be found on the GVH’s website.

Budapest, 6 June 2019

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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Competition law also has to adapt to the complex challenges of the 21st century - expressed at the III. Hungarian Competition Law Forum

The current hot topics of competition law were once again discussed in this year’s Competition Law Forum, which was jointly organised by The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) and the Hungarian Competition Law Association.

Miklós Juhász, the President of the Hungarian Competition Authority (Gazdasági Versenyhivatal – GVH), stated in his opening speech to the participants of the III. Hungarian Competition Law Forum that the rapid spread of digitalisation in the economy, the strengthening of oligopolistic market structures and procedural efficiency are all issues that inevitably need to be addressed in competition policy today. The president reviewed the main areas of the GVH's competition law enforcement: he drew attention to the ongoing market analysis in the market of digital comparison tools as part of the GVH's mid-term digital strategy, as well as to the latest notice on fining “which grants a wide margin of discretion to the Competition Council, the decision making body of the GVH, to take into account the willingness of undertakings to comply or compensate/redeem”.

In his speech, Zoltán Hegymegi-Barakonyi, the President of the Hungarian Competition Law Association, emphasised that technological changes, for instance the incorporation of artificial intelligence into business models, may require a paradigm shift in competition law. In connection with the recent decision of the EU Commission in the Siemens/Alstom case, he commented that “it might be necessary to fundamentally rethink the rules relating to concentrations” in order to promote the success of European undertakings against China and the United States in global market competition.

Pál Csiszár, director of the Directorate-General for Competition of the European Commission, and guest of honour of the event, took the position that easing merger control is "not the right cure for this disease". According to him it is very important that European competitiveness, especially innovation is boosted, but not at the expense of European consumers, in the specific case in question by increasing the price of rail travel. The director also warned against the dangers of the strengthening of oligopolistic markets, as experiences show that there have been fewer and fewer market entries over the last 15 years. Then again, smaller number of market participants can easily coordinate their behaviours, which cannot be remedied by competition law in certain cases. In addition, maintaining the fourth industrial revolution and procedural efficiency are challenges that competition authorities must face in order to preserve competitive market operation.

László Bak, the Vice President of the GVH, stated in his presentation on the ECN+ Directive, which aims to strengthen the national competition authorities of the European Union, that the vast majority of domestic legislation already complies with the provisions of the Directive. Only certain detailed rules need to be introduced in order to achieve full conformity. This means that the GVH already possesses all of the vital instruments and powers that are necessary to effectively enforce competition law.

Panel discussions provided a detailed overview of the competition concerns raised by the growing digital economy that affect us all, the appropriateness and effectiveness of competition law sanctions, as well as the increasingly strict intervention of the competition authority in merger control to the judges, lawyers, and company lawyers who participated in the forum.

The professional programme of the conference was closed by Gábor Faludi. His presentation was dedicated to the Hungarian implementation of the European Union’s directive on trade secrets.

The presentations of the III. Hungarian Competition Law Forum will be available on the website of the GVH from24 May.

Budapest, 23 May 2019

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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The GVH imposes a fine of HUF 100 million on Husqvarna Magyarország Kft. for fixing the online retail prices of its products

The Gazdasági Versenyhivatal (the Hungarian Competition Authority, GVH) imposed a fine of HUF 111 million (approx. EUR 330 thousand) on Husqvarna Magyarország Kft. because the undertaking, in collaboration with a number of its distributors, unlawfully set the online retail prices of Husqvarna, Gardena and McCulloch brands. No fines were imposed on the concerned online distributors. However, all of the undertakings involved in the proceeding were obliged to adopt measures aimed at preventing similar infringements from occurring in the future.

During its proceeding the GVH established that Husqvarna Magyarország Kft. had provided, in line with the practice prevailing in the concerned industry, the recommended retail prices of its Husqvarna, Gardena and McCulloch brands between 2013 and 2016. This conduct in itself did not constitute a competition law infringement. However, in collaboration with the distributors, the undertaking concerned indirectly set the minimum online prices of its products by also fixing the maximum level of discount that distributors could grant from the recommended prices. These kinds of clauses are considered as particularly serious restrictions of competition, as they ultimately result in increased consumer prices given the fact that retailers are prevented from competing with each other by lowering prices. The prevention of such conducts is considered by the GVH as a priority objective in all sectors of the economy.

Having regard to the role of Husqvarna Magyarország Kft. in the infringement, the size of the group of undertakings, its ownership background, international presence and the level of competition awareness that could be expected based on the foregoing, the GVH considered it necessary to impose a fine on the undertaking. However, taking into account the undertaking’s application for leniency and settlement submission, by which it contributed to the rapid conclusion of the GVH’s investigation, the level of the fine was reduced significantly (by 75%) compared to the amount that could have been imposed.

While the GVH did not impose any fines on the concerned online distributors, it obliged them to adopt measures in order to ensure compliance with competition rules. Husqvarna Magyarország Kft. also agreed to further develop its compliance programme that it not only contained measures relating to its own organisation, but in the future it also promoted its distributors’ compliant behaviour.

Case number: Vj/103/2014.

Budapest, 20 May 2019

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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Nóra Váczi, a member of the Competition Council, has been named as one of the ‘40 in their 40s Notable Women Competition Professionals in Europe, the Americas and Africa’

Nóra Váczi, a member of the Competition Council of the GVH, has been recognised as one of the ‘40 in their 40s Notable Women Competition Professionals in Europe, the Americas and Africa’ in the enforcement category by the W@Competition. In order to be awarded this title, applicants from Europe, the Americas and Africa could apply to a number of categories, such as enforcement, judiciary and policy, in-house, private practice, economics and academia by submitting their professional curriculum vitae. A jury composed of prominent competition law professionals decided which applicants were deemed worthy of being award the title of  ‘40 in their 40s Notable Women Competition Professionals in Europe, the Americas and Africa’.

It is a great honour that Nóra was selected to be among this list of 40 outstanding women, which is comprised of well accomplished women in the field of competition law, for instance, as heads of competition authorities (including, among others, the presidents of the French and Portugal competition authorities), judges and other competition law experts.

The W@Competition organisation promotes the more active participation of women in competition law. The organisation operates an online database of women working in competition law, organises events with women presenters, maintains a competition law blog and aims to make it easier for its members to interact with each other.

We would like to congratulate Nóra on this achievement, and for thereby promoting the prestige of the GVH. We wish her all the best for her work here at the Authority!

For further information: Click Here


The notification of a concentration can now also be filed electronically

Pursuant to Article 43/J (1) of the Hungarian Competition Act, the form for the notification of a concentration published on the website of the Hungarian Competition Authority (“Gazdasági Versenyhivatal” hereinafter: GV) may be submitted electronically.

A notification of a concentration can be filed electronically on the customised platform (Személyreszabott Ügyintézési Felület, SZÜF) of the governmental website using the electronic iForm application filing programme. In case of electronic submission the notification form shall be attached to the iForm application form.

The iForm programme can be accessed on SZÜF: HERE (available only in Hungarian)

The GVH emphasises that the size of the enclosed files in the iForm programme cannot exceed 20MB. If the attachment exceeds 20MB the notification of a concentration can only be filed in person or via postal services.

Further assistance concerning the electronic filing system can be downloaded in PDF format: HERE

Please note that this document is available on our webpage for information purposes only and the notification of a concentration can be submitted only in Hungarian (see here).


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