In the past three months, three telecom giants received unexpectedly heavy fines from the Hungarian Competition Authority (HCA) in consumer protection cases. In 2019 the HCA imposed more fines in total for unfair commercial practices against consumers than in cartel cases and, on the basis of its recent decisions, it looks likely to do the same in 2020. These recent decisions also show that repeated infringements are now subject to a stricter assessment.
Since 1 July 2014, companies have been able to initiate settlement proceedings with the Hungarian Competition Authority (HCA). Recent case law suggests that the HCA has aimed to foster cooperation between itself and market participants and is striving for cooperation even when market participants allegedly commit grave infringements of competition rule commitments.
Misleading business-to-consumer information may lead to significant fines. Two recent Hungarian Competition Authority (HCA) decisions prove that the HCA has maintained its position as a watchdog of both consumer rights and fair competition. In both cases, the companies were investigated by the HCA because they had omitted to tell customers important information, thereby harming them.
In 2017 the Hungarian Competition Authority (HCA) initiated a sector inquiry into the bank card acceptance market. Although the market was found to be competitive and functioning in accordance with the relevant regulations, the HCA has made a number of recommendations to both the legislature and market players in order to stimulate further growth.
The Hungarian Competition Authority (HCA) has launched a market study to explore the specific market developments relating to the application of digital comparison tools and their effects on consumers' decision making. The market study puts the HCA's mid-term digital consumer protection strategy paper into action and demonstrates the HCA's recent focus on consumer protection and efforts to serve as a lighthouse in the digital age.
In recent years, the Hungarian Competition Authority (HCA) has seemingly aimed to foster cooperation between itself and market participants. Recent case law shows that the HCA strives for cooperation even when market participants allegedly commit grave infringements of the competition rules. Market participants are advised to harness this tendency and the HCA's willingness to reach decisions more efficiently.
With the global development of the Internet, life has changed radically in just a few decades, and legislation can barely keep up. The Hungarian Competition Authority (HCA) has been monitoring developments and has not been afraid to intervene in the interests of fair competition and the protection of consumer rights. Influencers have recently been targeted by the HCA, especially regarding their promotional activity.
A recent Hungarian Competition Authority (HCA) decision concerning Vodafone demonstrates that a reasonable cooperative approach may significantly affect the level of fine imposed on an undertaking, as the HCA reduced the fine imposed on Vodafone by more than 50% based solely on its cooperative measures. Although this case is unique, it signals that compliance and cooperation efforts which exceed the necessary legal requirements do not go unnoticed.
The Hungarian Competition Authority (HCA) was recently given significant new investigative powers under the framework of its merger control duties. Should parties decide not to submit a voluntary filing when meeting the voluntary notification threshold, the HCA can initiate an investigation on its own accord and undertake a fully fledged merger control proceeding. The HCA recently announced that it has commenced its first such ex officio merger control investigation.
Following a Hungarian Competition Authority (HCA) decision that its rebate system violated the Trade Act, retail chain Spar went all the way to the Supreme Court. All judicial forums upheld the HCA's decision and the illegality of such rebates seemed to be settled. However, the Budapest Metropolitan Court recently overturned another HCA decision, which was somewhat surprising considering that the Supreme Court had already upheld the HCA's decision in the relatively similar Spar.
Public procurements are often targets for bid rigging and the Hungarian authorities and legislature have made extra efforts to fight this kind of behaviour. While it is not the primary authority for monitoring public procurements, the Hungarian Competition Authority (HCA) is one authority fighting anti-competitive behaviour in public procurement. Besides investigating violations, the HCA is also taking steps towards prevention and raising awareness.
In recent years, the digital market has expanded rapidly in Hungary in almost every sector. Numerous companies (eg, Uber and AirBnb) have entered the Hungarian market and significantly changed the landscape of entire sectors with their innovative services. The possible competition law issues concern the fact that these new innovative companies can quickly achieve a dominant position. Further, in some sectors, online platforms used by third parties can restrict competition between users.
An important part of the recent major amendment to the Competition Act was the timely implementation of the EU Antitrust Damages Directive into Hungarian law. While it was already possible to claim damages for a competition law infringement under Hungarian law, the directive's implementation introduced special rules for damages claims arising out of competition law infringement and the enforcement of such claims. It also introduced several solutions which are new to Hungarian law.
The Hungarian Competition Authority recently imposed one of its highest-ever fines on the Hungarian Banking Association for the anti-competitive exchange of information. Evidently, even activities in which market participants regularly engage and which they regard as lawful may help to reduce uncertainty in the market. This update provides an insight into anti-competitive information exchanges in order to minimise this risk.
The Hungarian Competition Authority (GVH) recently launched a promotion campaign for its leniency programme, emphasising that "a cartel will not stay hidden, but one may get away with a leniency application". In light of these great efforts on the GVH's part, it is crucial to examine the benefits and drawbacks of the leniency programme from the undertaking's perspective.
Swift, simple and less burdensome proceedings with a 10% reduction in fines – these are the benefits that the Hungarian Competition Authority chose to emphasise in its recent notice on the settlement procedure. Although the notice generally aligns with the relevant EU rules, it contains noteworthy deviations which may fundamentally affect its application.
Parliament recently adopted amendments to the Competition Act to reflect the practical lessons learned from the application of the rules which came into force in July 2014. The amendments introduce noteworthy exceptions to the cartel prohibitions. Some of these rules signal a more lenient approach towards certain competition law infringements, while others support more rigorous enforcement (eg, in bid-rigging cases).
The Competition Authority has imposed a fine of more than Ft1 billion (more than €3.3 million) on retailer Auchan for abusing its significant market power under the Trade Act – the highest fine that it has ever imposed in the sector. The decision signals that the Competition Authority is likely to be harsh on retail chains for similar abuses in future.