New elements and top fines in GVH’s practice

This article is available for reading in Trade magazin 2024/2-3

Attorneys at law Dr Anna Turi and Dr Márk Kovács talked about the latest legislative changes and the fining trends in 2023 in the practice of the Hungarian Competition Authority (GVH). Recent developments in the field of consumer protection, and more specifically the prohibition of unfair commercial practices against consumers were also presented to the participants.

Cooperation can often lead to significant reductions in the fines imposed

Top fines

The year’s biggest fine was the result of a retrial against Vodafone, after Vodafone successfully challenged in court the original fine of HUF 1.2bn. The fine – recalculated by GVH but still amounting to HUF 932m – was imposed because the company had falsely claimed in its advertisements that its 4G network covered a larger part of Europe than its competitors. The speakers emphasised that in determining the amount of the fine, GVH attached particular importance to the repetitive nature of the infringement.

It is also possible without a fine…

GVH imposed significant fines on Norbi Update and Helvetia Apotheke. Norbi Update, which is linked to the well-known fitness trainer and businessman Norbert Schobert, advertised the food products it sold with false claims, such as sugar-free or reduced carbohydrate content, thereby misleading consumers. In this case Norbi Update’s cooperation with GVH led to a 60% reduction in the final amount of the fine, which was finally set at HUF 40m. In addition to the cases where fines were imposed, such cases were also presented where businesses that had harmed consumer interests had escaped proceedings without being fined or with a significant reduction in the amount of the fine, e.g. Wish and Media Markt have compensated the consumers directly affected by their infringing conduct.

GVH takes tough action to protect the elderly, young people and other vulnerable consumer groups

… but the maximum fine has also been increased

An important new element in the practice of GVH is that the maximum fine increased as of 1 September 2023. Instead of the previous 10%, the competition authority may now impose a maximum fine of 13% of the worldwide net turnover achieved by the group of companies that owns the investigated firm in the year preceding the decision. This applies not only to cartel cases and abuses of dominant positions, but also to consumer protection cases (prohibition of unfair commercial practices against consumers) where GVH acts as the consumer protection authority. The speakers also introduced a further innovation, the letter of formal notice, which allows the president of GVH to informally draw the attention of the company concerned to certain objectionable practices without initiating proceedings.

Booking battles

In view of the topicality of the subject, the speakers also spoke about the recent high-profile competition investigations by the competition authorities into the online booking market. There have been several reports of significant delays by the operator of the online booking platform Booking.com in paying accommodation providers the fees due for bookings made through the platform. Several notifications were received by GVH, which decided to launch an accelerated sector inquiry into the entire online booking market.

In a draft report published by GVH in the autumn, the competition authority proposes to the legislator to introduce rules to prohibit online booking platforms from restricting in their contracts with accommodation providers the possibility for accommodation providers to advertise their accommodation at a lower price on other platforms (such as their own websites). //