Recent developments in
Hungarian merger control
dr. SZILÁGYI Pál
Competition Law Research Centre
PPKE-JÁK
Changes in European Merger Control
•
•
•
•
Change in 2004
Filling in the ‘GAP’
Q: was there a ‘GAP’?
In theory there was a
‘GAP’
• In practice questionable
• Cf. presentation of
Ioannis Kokkoris: YES
Legislative changes in Hungary (2009)
• Until 2009: dominance test; from 1 June 2009:
new test
• New test in the HCO : significant reduction of
competition + dominance
• New test according to the official
interpretation by the legislator: SLC-test .
Art. 30 (2) HCO: “The Hungarian Competition Authority may not
refuse to grant authorisation for a concentration where, with a view
to the [advantages and disadvantages], the concentration would not
significantly reduce competition on the relevant market [...], in
particular as a result of the creation or strengthening of a
dominant position.” (official translation by the authority)
Legislative changes in Hungary (2009) cont.
• NB: the legislator equals SLC to SIEC in theory, but it
explains the change in the following words: „The SLC test
compared to the dominance test allows to prohibit
concentrations which do not create (strengthen) a
dominant position if they significantly reduce competition,
while on the other side allows to clear concentrations which
create (strengthen) a dominant position if this is
counterbalanced by efficiency gains.”
• But Cf. Recital (25) Reg. 139/2004!
Case study 1: HTCC/Matel (Vj-19/2007)
• Concentration between two telecom companies
• On the Internet- and data-communication services
market:
Undertaking
2004
2005
2006
2006
(combined)
Telecom group
40-60
40-60
40-60
40-60
Matel
10-20
10-20
10-20
HTCC
10-20
10-20
10-20
GTS-Datanet
5-15
5-15
5-15
5-15
Other providers
15-20
15-20
15-20
15-20
25-30
Not included in the decision, but can be found in other sources. E.g. Csorba, Gergely: A fúziókontroll módszertanáról.
Dominancia- vagy versenyhatásteszt? In Valentiny és Kiss: Verseny és szabályozás 2007. (MTA Közgazdaságtudományi
Intézet, Budapest, 2008)
Case study 1: HTCC/Matel (Vj-19/2007) – cont.
• The concentration combines the
second and third player
• HHI raises to more 2500 with a
change of 300-400 (source:
Csorba op.cit.)
• Bidding study: HTCC and Matel
express only a limited pressure on
each other; GTS-Datanet exerts
stronger pressure
• Not a merger of the closest
competitors.
• No SLC, no dominance.
• Allowed
Case study 2:
Hungarian Telekom/ViDaNet (Vj-158/2008)
• Full acquisition of ViDaNet by HT
• Battle over the issue: is mobilenet in the same
market as broadband DSL?
• Bottleneck of the case: Internet service providing
• Market shares rise to 55-70%.
• The two companies are the owners of the
networks and no entry is expected.
• Creation or strengthening of a dominant position:
prohibited
Case study 3: Ringier/Híd (Vj-155/2008)
• Full acquisition of Híd by Ringier: two sided markets; tabloids.
• Market shares (sale; advertising revenues on the nationwide
tabloid market):
2005
2006
2007
2008
Blikk
(Ringier)
86,7
73,8
73,2
72,3
Bors (Híd)
13,3
19,1
21,2
23,2
Napi Ász
-
7,1
5,6
4,5
100
100
100
100
SUM:
2006
2007
Blikk (Ringier)
80-90
80-90
Bors (Híd)
10-15
10-15
SUM:
95-100
95-100
2008 (SUM)
95,4
Case study 3: Ringier/Híd (Vj-155/2008)
• Merger of the first and second player
• Extremely high market shares
• In principle this could also be allowed (!) if
there is entry.
• Weighting of pros and cons by the GVH (under
the dominance test!): „the creation or
strengthening of dominant position does not
automatically lead to the conclusion that the
concentration has to be prohibited”.
• Notification withdrawn.
Sophisticated economic analysis
•
•
•
•
Customer and consumer surveys
Large sample questionnaires
Regression analysis
Bidding studies
• It is clear that sophisticated economic analysis
is not only present in SIEC/SLC test, but also
under dominance.
Statistics
2005
2006
2007
2008
2009
All merger
cases
70
43
46
37
42
No concerns
(„Phase I”)
59
33
39
34
NA
Concerns
(„Phase II”)
11
10
7
2
NA
Cleared
58
35
36
28
NA
Cleared with
conditions
1
3
3
2
NA
Prohibited
0
0
0
0
2
Questions
Hungary has a small-medium sized traditionally open
market.
Questions which have to be answered in light of
experience:
-Is it justified to spend valuable resources of both the
market players and the authority on real or imagined
GAP cases in such an economy?
- Or is a clear cut dominance test more suitable?