Budapest, 1 February 2024 - The Hungarian Competition Authority (GVH) has closed another major public procurement cartel. The GVH found that between 2011 and 2014, seven major road salt distributors in Hungary engaged in anti-competitive collusion and collusion in seven tenders, most of which were public procurement tenders. The national competition authority imposed fines totalling around HUF 400 million on six companies, four of which admitted the infringement. Restrictions of competition in the context of public procurement procedures are considered to be the most serious competition law infringements and the GVH therefore gives priority to the elimination of public procurement cartels.

Just four months ago, at the beginning of October 2023, the GVH announced that a large number of road painting and road signage companies had divided the domestic market between themselves between 2012 and 2014. The national competition authority imposed fines of around 300 million HUF on 17 companies for a series of collusive practices covering the whole country, with some of those responsible also facing criminal sanctions.

The Competition Authority has now closed another similar cartel case. The national competition authority opened an investigation in 2014 after it found that major road salt distributors in Hungary had colluded on the prices to be submitted in public tenders for the purchase of anti-slip materials and divided the tenders among themselves. The competition monitoring procedure showed that the companies concerned agreed on their bid prices, the winning bidder and the allocation of some tenders between them in seven tenders, mostly public tenders, between 2011 and 2014. These included the procurement of Magyar Közút Zrt., Fővárosi Közterület-fenntartó Zrt. and tenders in Székesfehérvár and Gödöllő. In two cases, the illegal negotiations were conducted through intermediaries.

The GVH was forced to suspend the complex cartel proceedings investigating a significant number of companies and a large number of tenders, as the collusion under investigation not only entailed competition authority consequences, but also criminal proceedings were pending in relation to certain public procurement contracts. The GVH waited for a total of around 3.5 years for the final conclusion of the criminal proceedings, which also necessitated a reassessment of the available evidence. In several of the tenders under investigation, the Metropolitan Court of Budapest also found in its final judgment that a cartel offence had been committed.

In its assessment of the infringements committed, the Competition Council of the GVH considered as a particularly aggravating circumstance that they were aimed at allocating procurement procedures involving public funds and that the companies' senior officials were also involved. However, the competition authority took into account the cooperation of some of the participants as a mitigating circumstance, as four of the six undertakings fully admitted the infringement, waived their right to appeal and undertook to implement a compliance programme, in the framework of a so-called settlement procedure.

The Competition Council of the GVH finally imposed fines of HUF 139 million on MAGYAR PLASTIROUTE Kft, HUF 112.4 million on SOLINWEST 2000 Kft, HUF 74.4 million on SZABOLCS-MAG 98 Kft, HUF 42 million on "TRANSIT-SPEED" Kft, HUF 24 million on Kelet-Trans 2000 Kft and HUF 8 million on Agrochimtranspack Kft, i.e. a total of HUF 399.8 million.

The case registration number: VJ/76/2014.

Press release was translated automated.

Spark Networks Services GmbH misleadingly communicated about its online dating service Elittárs, concealing material terms and conditions of the service that substantially limited the search for a partner, and misleading information about the size of the available user base. The GVH's Competition Council fined the company HUF 169 million for the infringements found.

In summer 2022, the Competition Authority opened proceedings against Spark Networks Services GmbH, based in Germany, on suspicion that it was likely to mislead its customers about the essential features of the service.

In the course of the proceedings, the GVH found that the company had concealed on its website and in its Android application that registration without a subscription is not a meaningful way to conduct a peer search. Users who registered for free were unable to view the profile pictures of others and were unable to send or read messages.

The company also provided misleading information about the available user base with claims such as "15 million active members worldwide" and "800,000 new members per month - Total new users registered on our Sites". The GVH found that the claims indicated a user base that was not actually available to Hungarian users and did not represent the actual number of active members.

The company cooperated substantially in the proceedings, did not contest the facts under investigation, admitted the infringement and waived its right to appeal. Taking these circumstances into account, the GVH Competition Council reduced the fine by almost half, and imposed a fine of HUF 169 million on the company.

This is not the first time that the national competition authority has investigated online dating services. In 2020, it imposed a fine of HUF 1.6 billion on a Luxembourg company operating the dating sites be2.hu and academicsingles.hu.

The GVH's now closed investigation warns consumers to be more cautious and careful when using services online. For businesses, the case shows that it is worth cooperating with the FCA in proceedings, as meaningful cooperation can lead to significant reductions in fines.

The case registration number is VJ/16/2022.

Automated translation of the press release.

The Hungarian Competition Authority (GVH) has closed the competition supervision procedure it launched in 2022 to investigate the fee offers of the Hungarian Chamber of Accountants. In the course of the procedure, the GVH concluded that no further evidence could clearly establish the existence of an infringement, and therefore the investigation is not justified.

The Hungarian Chamber of Auditors (HCA) is empowered by law to issue recommendations on the principles and primary criteria for setting fees for audit services and on the lower limits of the fees to be charged. However, it is important that these are strictly recommendations only and must not restrict the freedom of practitioners to set their own prices.

In the summer of 2022, the Competition Authority opened a competition investigation into the suspicion that the MCCA had not only recommended the published fees, but also took steps to ensure that its members did not provide services at lower prices. In the course of the procedure, the GVH investigated whether the public body had exerted any pressure on auditors to comply with the recommended fees.

The FCA carried out extensive fact-finding during the investigation, including an unannounced on-site visit to the headquarters of the MCCA and several requests for information from the chamber.

On the basis of the information available to the FCA, there was clearly no direct evidence to suggest that the MCCA had used any guidance to determine the appropriateness or even the excessive low level of fees, nor was there any evidence that the MCCA had used educational material or other informative means to enforce minimum prices.

In the view of the Competition Authority, the allegedly unlawful conduct of the parties in the form of pressure to comply with the tariff offers and the threat of sanctions, which is the basis for initiating the procedure, does not in itself constitute a basis for finding an infringement, in the absence of supporting evidence. In the light of the above, the GVH concluded that the evidence obtained and discovered in the course of the competition supervision procedure did not allow to establish whether the conduct was infringing and that the continuation of the procedure could not be expected to produce any result, and therefore terminated the competition supervision procedure.

(Automatic translation)

Budapest, 5 October 2023 - A long-running cartel case has come to an end. The Hungarian Competition Authority (GVH) has found that a large number of road sign painting and road signage companies divided up the domestic market between them between 2012 and 2014. The national competition authority imposed fines of around €300 million on 17 companies for a series of collusive practices covering the whole country, and some of those responsible also faced criminal sanctions.

Budapest, 1 January 2024 - Following the progress made in 2023, the legislator has entrusted the Hungarian Competition Authority (GVH) with new tasks: the GVH will be responsible for the liaison function under the Foreign Subsidies Regulation, the so-called DSA Regulation on digital services will become mandatory from February, and from March the enforcement powers of the national competition authority will be extended: it will be able to take action to shut down harmful websites during its proceedings. In addition, the GVH is expected to be given several new tasks in 2024, including the regulation of gatekeepers and the online accommodation booking market, according to a draft law submitted to Parliament in mid-December.

The competences of the Competition Authority have been extended, and from 1 January 2024 the national competition authority will be the authority responsible for liaising with the European Commission under Regulation (EU) 2022/2560 of the European Parliament and of the Council on foreign aid. The GVH can open targeted investigations into foreign state aid that distorts the EU market, at the request of the European Commission.

More effective handling of complaints from consumers is facilitated by technical and minor substantive amendments to the complaints handling rules in the light of the provisions of Directive 2019/1937/EC of the European Parliament and of the Council on the protection of persons who report infringements of EU law. The amendment aimed at ensuring compliance with the rules of the Directive, as well as the amendment adopted by the Law amending certain laws related to strengthening the competitiveness of domestic economic operators and increasing the efficiency of public administration, will help consumers who have a dispute with the GVH to deal with their cases more efficiently.

GVH may shut down websites and starts applying the DSA Regulation

An amendment to Act XLVII of 2008 on the Prohibition of Unfair Commercial Practices against Consumers will extend the powers of the GVH from 1 March 2024, allowing the GVH Competition Council to order the inaccessibility of electronic data (e.g. websites) where this is necessary to prevent the risk of serious harm to consumers in view of the extensive consumer exposure. The National Media and Infocommunications Authority (NMHH) organises and supervises the implementation of the deactivation under the Electronic Communications Act.

On 17 February 2024, the domestic regulation facilitating the entry into force of Regulation (EU) 2022/2065 of the European Parliament and of the Council on the single market for digital services and amending Directive 2000/31/EC (the DSA Regulation) will enter into force, covering undertakings providing internet intermediary services established in Hungary or directed to Hungary.

The DSA Regulation lays down obligations for online intermediaries and platforms, such as marketplaces, social networks, content sharing platforms, app stores, and online travel and accommodation platforms. The primary objective of this Regulation is to prevent illegal and harmful online activities and the deliberate dissemination of false information. It ensures the safety of users, protects fundamental rights and creates a fair and open online platform environment.

The FCA works closely with the DSA Enforcement Authority (NMHH) on competition issues in the digital services market and on user-related issues in the digital services market to ensure consistent enforcement and promote uniform application of the law and to protect users' rights.

The GVH's recommendations in its expedited sector inquiry report will also be used as a basis for the legislative amendment of the online accommodation booking market

The online world is also affected by the proposal for a law on action in favour of Hungarian consumers and businesses, T/6547. The bill would also extend the powers of the Hungarian Competition Authority by amending the Act on Electronic Commerce Services and would set stricter national rules on the obligations of gatekeepers in the digital sector compared to the Regulation (EU) 2022/1925 on competitive and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (DMA Regulation), customer service and complaint handling mechanism in Hungary, with in-person or telephone and electronic access, strict payment deadlines, independent legal advice obligation).

Several points in the bill submitted to the Parliament represent the practical implementation of the National Competition Authority's fast-track sector inquiry launched at the end of August. The GVH has proposed several points of intervention to the legislator to protect Hungarian bookers and accommodation providers. In an interview published in the 28 December 2023 issue of Magyar Nemzet, Csaba Balázs Rigó, President of the GVH, said in this context: 'We must ensure that no company can put either Hungarian holidaymakers or the Hungarian businesses offering them accommodation in a vulnerable position.'

Automatic translation of the press release of the GVH.