OECD-GVH Regional Centre for Competition in Budapest. (Hungary) Gazdasági Versenyhivatal The Hungarian Competition Authority - PDF

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OECD-GVH Regional Centre for Competition in Budapest (Hungary) Gazdasági Versenyhivatal The Hungarian Competition Authority OECD-GVH Regional Centre for Competition in Budapest (Hungary) Annual Activity

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OECD-GVH Regional Centre for Competition in Budapest (Hungary) Gazdasági Versenyhivatal The Hungarian Competition Authority OECD-GVH Regional Centre for Competition in Budapest (Hungary) Annual Activity Report, 2014 Contact: Andrea Dalmay OECD-GVH Regional Centre for Competition in Budapest (Hungary) Gazdasági Versenyhivatal (GVH) Hungarian Competition Authority H-1391 Budapest 62, POBox 211 Hungary Tel.: (+36-1) Fax: (+36-1) Website: I. Introduction and organisational setup The OECD-GVH Regional Centre for Competition in Budapest (Hungary) ( RCC ) was established by the Gazdasági Versenyhivatal (GVH, Hungarian Competition Authority) and the Organisation for Economic Co-operation and Development (OECD) on 16 February 2005 when a Memorandum of Understanding was signed by the parties. The main objective of the RCC is to foster the development of competition policy, competition law and competition culture in the South-East, East and Central European regions and to thereby contribute to economic growth and prosperity in the involved regions. The RCC provides capacity building assistance and policy advice through workshops, seminars and training programmes on competition law and policy for officials in competition enforcement agencies and other parts of government, sector regulators, and judges. The RCC also works to strengthen competition law and policy in Hungary and in the GVH itself. The RCC s work focuses on four main target groups. The first group of beneficiaries are the competition authorities of South-East Europe and the majority of the CIS countries, namely Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kazakhstan, Kosovo, Kyrgyzstan, FYR of Macedonia, Moldova, Montenegro, Romania, the Russian Federation, Serbia and Ukraine. The work targeting these economies is regarded as the core activity of the RCC. These economies have all progressed with the development of their competition laws and policies, but are at different stages in this process. As a consequence, the needs for capacity building differ among the involved non-oecd member economies and this necessitates a broad approach to competition outreach work. Major capacity building needs in these regions include (a) enhancing analytical skills in competition law enforcement, (b) raising the awareness of the judiciary regarding the specific characteristics of competition law adjudication, (c) pro-competitive reform in infrastructure sectors, (d) competition advocacy, (e) relations between competition authorities and sector regulatory agencies, (f) legal and institutional reform in the area of competition, and (g) building international co-operation and networking. Judges represent the second target group of the RCC s activities. The judges seminars provide judges with an opportunity to improve their understanding of competition law and economics, to exchange views on the latest developments in EU competition law, and to discuss the key challenges arising in competition law cases. These GVH programmes are supported by the European Commission and the OECD. The third group of beneficiaries of the work of the RCC are the competition authorities which belong to the Central European Competition Initiative (CECI). This Initiative aims to provide a forum for co-operation on competition matters and was established by the Central European competition authorities in It is a network of agencies and operates via workshops and informal meetings. Involved are the competition authorities of Austria, the Czech Republic, Poland, Slovakia, Slovenia and Hungary. These countries all belong to the same geographic region, share fundamentally similar cultural traditions and historical experiences and are, more or less, at the same stage of development. As a result, their competition authorities face several common challenges and difficulties. Moreover, from time to time these authorities deal with markets which are regional, overlapping or which are connected to each other, and they may also on occasion deal with the same parties (the same companies within the region). 3 The fourth beneficiary of the RCC s work is the GVH itself. The agendas of the RCC workshops that are organised for the staff of the GVH are related to ongoing projects or hot topics and provide an excellent opportunity for staff to learn about state-of-the-art antitrust theory and enforcement practices. Concerning the functioning of the RCC, the Memorandum of Understanding of the RCC provides that the GVH and the OECD are to make major decisions on their activities and work jointly. For this purpose, the parties meet on an annual basis to review the operation and performance of the RCC and to prepare the annual work plan. Regarding the financing of the RCC, the GVH is responsible for providing most of the necessary funding for the functioning of the RCC, including an annual voluntary contribution to the OECD for the costs associated with the staff position in Paris. The OECD helps to co-finance the RCC s operation and activities. In addition to this, both the GVH and the OECD co-operate in efforts to raise additional financial support for the RCC from third parties. II. Overview of the activities for the year was the tenth year of the RCC s activity. The RCC organised a total of eight events in Seminars focused on some important core competences of competition authorities as well as on best practices in the area of competition law. In addition to its regular seminars, the RCC continued with its special initiatives: a seminar organised in one of the beneficiary economies, and a seminar organised jointly with the FAS Russia. GVH Training Seminar: Recent Developments and Case Law Under Art. 101 TFEU and Practical Training for the Council, Merger, Cartel and UCP-Staff April table no 1 Total number of speakers per country or institution S PEAKERS COUNTRY OR INSTITUTION NUMBER PERSON-DAYS Belgium 3 6 EU Commission 4 9 Finland 1 3 France 1 3 FYR of Macedonia 2 6 Germany 8 22 Greece 1 3 Ireland 1 3 Israel 1 3 Luxembourg 2 5 Portugal 1 2 Romania 1 3 Russian Federation 6 18 United Kingdom 4 8 United States 1 3 GVH 6 17 OECD AGGREGATE Altogether, over the course of the year, the RCC invited 269 participants and 53 speakers to its events. Through the RCC s core events it delivered 141 persondays of capacity building. 1 All in all, participants and speakers from 33 economies or institutions attended the RCC s programmes, coming from Albania, Armenia, Austria, Azerbaijan, Belarus, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Denmark, Estonia, FYR of Macedonia, Georgia, Germany, Greece, Ireland, Kazakhstan, Kosovo, Kyrgyzstan, Latvia, Lithuania, Moldova, Montenegro, Netherlands, Poland, Portugal, Romania, Russian Federation, Serbia, Slovenia, Tajikistan, Ukraine and the GVH. Meanwhile, experts from 17 countries and institutions attended as panel members: Belgium, EU Commission, Finland, France, FYR of Macedonia Germany, Greece, Ireland, Israel, Luxembourg, Portugal, Romania, Russian Federation, United Kingdom, United States, the GVH and the OECD. 1 Person-days are defined as the number of days a person attended a RCC seminar. Thus, if 10 people attended a course for 5 days and 4 people attended a course for 3 days the number of person days delivered is 62 (10*5 + 4*3 = 62). 5 III. Detailed review of the activities in the year 2014 Table N o 2 provides a brief overview of the topics of the seminars held in 2014 as well as the participating economies and institutions. table no 2 Summary of activities in 2014 EVENT TOPIC DATE TOTAL NUMBER OF PARTICIPANTS AND SPEAKERS ATTENDING ECONOMIES/INSTITUTIONS Seminar Series on European Competition Law Fundamentals for National Judges; Seminar II: Abuse of Dominance Basic Economic and Legal Concepts Seminar on Practice and Procedures in Merger Investigations GVH Training Seminar: Recent Developments and Case Law under Art. 101 TFEU and Practical Training for the Council, Merger, Cartel, and UCP Staff Seminar Series on European Competition Law Fundamentals for National Judges Seminar III: Quantification of Damages in Competition Cases February March April May Participants: Austria, Belgium, Bulgaria, Croatia, Denmark, Germany, Greece, Ireland, Latvia, Lithuania, Netherlands, Poland, Portugal, Romania, Slovenia Speakers: EU Commission, Germany, GVH, OECD, United Kingdom Participants: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Croatia, Georgia, Kazakhstan, Kosovo, Kyrgyzstan, FYR of Macedonia, Moldova, Montenegro, Romania, Russian Federation, Serbia, Ukraine Speakers: EU Commission, Germany, GVH, OECD, United States Participants: GVH Speakers: Belgium, EU Commission, Germany, OECD, Portugal, United Kingdom Participants: Belgium, Bulgaria, Croatia, Denmark, Estonia, Germany, Ireland, Latvia, Lithuania, Netherlands, Poland, Portugal, Romania, Slovenia Speakers: Belgium, Germany, OECD 6 Seminar on Bid Rigging and Public Procurement 3 5 June Participants: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Kazakhstan, Kosovo, Kyrgyzstan, FYR of Macedonia, Moldova, Romania, Russian Federation, Serbia, Ukraine Speakers: Finland, GVH, FYR of Macedonia, OECD, Romania Seminar on Competition Topics in Retail Markets September Participants: Albania, Armenia, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kosovo, Kyrgyzstan, FYR of Macedonia, Moldova, Romania, Russian Federation, Serbia, Ukraine Speakers: France, Germany, GVH, Greece, OECD Airport Competition Topics Seminar on Evidentiary Issues in Establishing Abuse of Dominance October December Participants: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Macedonia, Russian Federation, Tajikistan Speakers: Germany, GVH, Ireland, OECD, Russian Federation Participants: Armenia, Austria, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Georgia, Kazakhstan, Kosovo, Kyrgyzstan, FYR of Macedonia, Moldova, Russian Federation, Serbia, Ukraine Speakers: Belgium, EU Commission, GVH, Israel, OECD 1. Standard programmes in the framework of the core activity a) March, Seminar on Practice and Procedures in Merger Investigations The seminar conducted by the RCC on practice and procedures in merger investigations was attended by 34 competition law enforcers from 17 SEE and CIS countries. The seminar focused very specifically on investigation techniques and procedures in merger cases with a special emphasis on their immediate practical applicability in the merger investigations conducted by the participants. Subjects such as essential planning and investigation steps, questionnaires, market surveys and econometric data, conducting state of play meetings and remedy discussions were covered. The OECD experts gave introductory presentations on each of the topics. Throughout the seminar the participants worked intensely on a hypothetical case and tried to solve relevant problems in breakout groups, supported by the OECD experts. The group results were then presented and discussed with all of the participants. 7 Seminar on Practice and Procedures in Merger Investigations March 2014 conglomerate mergers. In the first breakout session of the seminar the participants were then asked to discuss the likely theories of harm arising in the hypothetical case and to design the first investigative steps. The hypothetical merger case was designed by Sabine Zigelski from the RCC. It dealt with a merger of two producers of alcoholic beverages. The participants had received the hypothetical merger notification and additional documents in advance. The hypothetical raised some formal questions but more importantly focused on market definition and on techniques for collecting and evaluating information, defining markets, internal decision making and remedy discussions. In seven breakout sessions over the course of the seminar the participants worked in four parallel groups, facilitated by the OECD experts, on case specific questions. Additional material and case information was provided as the hypothetical case progressed. Patricia A. Brink from the US DOJ kicked off the workshop with a presentation on project planning in merger cases, highlighting topics relevant to every juris diction active in merger control, such as time management, sources of information and planning and use of staff resources. This was followed by a presentation given by Georgiana Capraru Ianus, European Commission, on theories of harm in mergers. She focused in particular on unilateral and co-ordinated effects analysis and also covered vertical and The afternoon began with the next breakout session, which involved the participants drafting a number of questions that would be sent to the merging parties in order to clarify the notification and to obtain additional information for the following investigative steps. Elke Zeise from the Bundeskartellamt then presented on best practices for requests for information and highlighted different approaches in preliminary and in-depth investigations. In the last breakout session of the day the participants were asked to draft an investigation plan and to review a questionnaire that related to the hypothetical merger case. The second day began with Boris Martinovic of the GVH giving a presentation on economic evidence in merger analysis. He provided an overview of the types and sources of economic evidence, such as scanner and panel data, transaction level data, bidding data and company data. In the second part of his presentation he explained market definition techniques, such as the hypothetical monopolist test, critical loss analysis and correlation analysis as well as the methods that can be used to estimate unilateral merger effects, for example, elasticities, merger simulation, diversion ratios, upward pricing pressure indices and illustrative price rises, while providing case examples for each point. In the following breakout session the participants received the results of the economic analysis in the hypothetical merger 8 case and were asked to discuss the reliability of the data used, the diversion ratios and the GUPPI-analysis results. seminar with a short presentation on a real merger case involving alcoholic beverages that showed close similarities to the hypothetical case. In the afternoon the participants received the preliminary investigation results in the hypothetical merger case and had to prepare different roles for the following role play on internal decision making. Half of the participants prepared the role of the case handlers and argued in favour of a prohibition decision, while the other half prepared arguments that spoke against a prohibition in order to take on the role of the internal devils advocate. Representatives of two of the groups then held a meeting and discussed the case, while the other groups commented and added arguments in the following discussion. In the next presentation Georgiana Capraru Ianus discussed essential procedural steps and rights in merger investigations, which should be universally applicable in all merger regimes. She focused on the right to be heard, third party rights, the presentation of facts and evidence, access to file and oral hearings. Patricia A. Brink closed the day with a presentation on merger remedies, thereby providing preparation for the following morning s breakout session. She talked about the guiding principles for merger remedies, and in particular the relevance of structural remedies and divestitures, but also pointed out where conduct remedies might play a role. The presentation closed with remarks on the agency approval process and the relevant timelines. For the start of day three the participants were again asked to prepare different roles in their breakout groups. One half had to prepare the role of the authority in a discussion on remedies and the other half had to prepare the role of the notifying undertakings and their legal advisors. Both had to devise strategies for the following role play: a meeting between the authority and the undertakings in order to negotiate a remedy in the hypothetical case. Representatives of two groups acted out the role play and this was then discussed by the other participants. In the final breakout session the participants had to come to a decision clearance or prohibition and to present their result and the major reasons for it to the group. Sabine Zigelski concluded the day and the b) September, Seminar on Competition Topics in Retail Markets The seminar on competition topics in retail markets was attended by 32 competition law enforcers from 16 SEE and CIS countries. The seminar was held as an event focusing on the retail sector. Various competition problems on retail markets that are of common interest to many competition authorities were explained and discussed. With regard to mergers, market definition and remedies as well as practical case studies were presented. Being a topic of increasing interest to many jurisdictions a full day was dedicated to the topic of buyer power and sector enquiries. The latter were presented as a tool for identifying structural problems on various market levels and for acquiring better insights into the functioning of markets and the typical behaviour of market players. In the last part of the seminar vertical competition restraints and abuses of dominance as they might typically be found in the retail context were discussed. In addition, participants and experts presented case studies and worked on two hypothetical exercises, thereby deepening their understanding of the retail related competition problems and the potential approaches that can be employed to resolve them. Birgit Krueger (Bundeskartellamt, Germany) kicked off the seminar with a presentation on market definition in the German food retail sector. Based on the rich German experience with mergers and other competition law proceedings in the retail sector she explained the importance of market definition and the approaches to it. With regard to downstream markets, the concepts of product market definition and geographic market definition were explained. For the upstream procurement markets she provided closer insights into the discussion on private labels and branded products, exports and distribution channels. 9 Seminar on Competition Topics in Retail Markets September 2014 Moldova then presented its first merger case since the recent changes to its competition law. Being a still on-going case, the participants from Moldova focused on investigative steps and on the potential competition problems they have identified and are following up on. The horizontal and vertical issues of the case were also discussed. As retail mergers are often cleared conditionally, Sabine Zigelski (OECD) gave a presentation on merger remedies in general, while placing a particular focus on the typical remedies that may be found in retail cases. Retail cases seem to be very suitable for structural remedies as it is easier in these cases than in many other cases to identify regional competition problems and to solve them by the targeted sale of specified outlets to appropriate buyers in a meaningful bundle. as well as a differences-in-differences analysis. The evaluation focused on the regional markets with the highest concentration levels and on basic food products. The result confirmed the original merger decision. There were no unforeseen increases in market shares and the merger did not give rise to higher consumer prices or a superior bargaining power, as compared to the merging parties competitors. The last presentation of the day was given by Anne Rossion (Autorité de la Concurrence, France). She discussed the Casino-Monoprix merger case. While the merger was a nationwide merger, it particularly affected Paris. Anne explained the screening approaches that the Autorité had applied in order to determine the markets that needed closer examination. The arguments that had been
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