INDIVIDUAL EXEMPTION OF THE AGREEMENT OF 13 DEBIT CARD ISSUER BANKS
(Exemption of restrictive agreements)
On the Hungarian market of debit cards the number of cards has increased but the number of frauds has increased considerably as well. For a more effective protection of the usage of cards 13 issuer and acceptor banks, all play important roles on the Hungarian debit card market, made an agreement to detect the disturbing card acceptors (traders) and to apply sanctions against incorrect card acceptors by collective measures.
International card associations provided the minimum elements to be involved in contracts concluded between their members, such as those 13 banks, and the card acceptor traders. Based on the collected information card associations assist their members by providing a list of the traders who are threatened by fraud and by providing a rule on how to monitor the actual frauds. Beyond these requirements the banks are able to set their own contracting practices.
Under the agreement in question the banks agreed on the application of severe conditions in their contracts with the traders who (i) are operating since less than one year, (ii) have been excluded from the range of contractors for more than 3 years, and (iii) have a very low share basic capital.
Both the investigator and the Competition Council accepted the application of severe conditions since in the first case the unknown actual activity or the turnover may limit the establish of card acceptance and, in the second case, the strict conditions are necessary in respect of the previously excluded traders because of the high risk caused by them. The Competition Council, however, did not accept the restrictive conditions applied to the traders who have only a very low capital as, in its view, to attain the objective of the agreement there is no need to restrict the participation of this group since the reason of operating with very low capital might be based in economical or business policy aspects which cannot be linked to card frauds.
At the same time the Competition Council stated that the agreement promotes the spread of card use, the safe usage and the decrease of the risk of acceptors. The sanctions applied are in accordance with the extent and repetition of the market disturbance and establish transparent circumstances for the acceptors. The Competition Council stated that the agreement satisfies the exemption factors under Article 17(1) of the Competition Act.
The agreement is open for every bank that accepts its conditions. The banks accepted the objection of the Competition Council and omitted the restrictive part from the original agreement related to traders having very low capital. With this modification the Competition Council individually exempted the agreement from the prohibition of restrictive agreement provided by the Competition Act.
April 27, 2000. Budapest
dr. Györffy István sk. előadó
dr. Bodócsi András sk.
dr. Kállai Mária sk.