Dear Participants, in order to prepare for our upcoming 5th Pázmány UCP Conference, we would like to share with you a couple of quick interviews with some of our conference speakers.
First, we have asked András Tóth, the chairman of the Competition Council of the Hungarian Competition Authority about his views concerning the importance of their fight against misleading advertising practices. It’s title could be: ‘the human face of a competition authority’.
- Some would say that antitrust authorities have no role to play in the field of misleading advertising. Do you agree with this/How would you persuade them?
Well, from my experience I would say that the opposite is true. This can also be seen in the approaches adopted by a number of other competition authorities, for example the German competition authority, the Bundeskartellamt, has recently expressed its desire to be entrusted with specific powers in relation to misleading advertising and therefore a draft law dealing with this very matter has been submitted. Furthermore, it should be noted that the Dutch competition authority has also been entrusted with consumer protection competences, while the Polish, Italian and British competition authorities have a long history and experience in this regard. In my opinion, competition authorities definitely have a role to play in the field of misleading advertising, as the entire process of competition needs to be protected from unfair practices. It is not sufficient to protect the healthy competition structure, as merely protecting competition in this way is pointless if at the final point, when competition is crucial and when competition is over, competitors can exert unfair influence over the decision the consumer decides to make. If the latter is allowed and competitors were able to exert unfair influence, then the competition authority has ultimately acted in vain and competitors cannot compete on their merits. An authority’s role in preventing this from occurring reflects best the human face of a competition authority. For average citizens the abstract and indirect consumer protection activities and benefits of competition authorities are not well understood and appreciated, as such activities do not raise competition awareness, or increase the reputation of the authorities, while consumer protection activities can bring competition authorities closer to the ordinary people they work for. I do not agree with the idea that competition authorities should not concern themselves with other public policies, on the contrary, I believe that it makes plain common sense that authorities should also take into account other public policies.
- Which cases would you highlight as the most important ones in the last year?
I would like to mention the Magyar Telekom case. The Hungarian Competition Authority (GVH) pays particular attention to competition in the Hungarian mobile telephony market. Broadband network coverage is a significant indicator, not only for competition in the mobile markets, but also for the whole digital market. It is not the determining infrastructure of the future, but that of the present. It is no accident that the actors of the mobile market also highlight the characteristics of their broadband networks in their commercial communications. This case, however, pointed out that an advertising communication shall be interpreted in the economic environment in which it takes place. In the given case, taking into account this important factor, a decision made by a consumer in the mobile market results in a long lasting, possibly even 2-year long loyalty commitment. A market player, making statements on this crucial element of competition concerning its own products, must take into account the fact that a consumer decision based on its statements is long term in nature. When market players are continuously investing large amounts of money in developing broadband networks, a service provider must not make a statement that it has the largest coverage or fastest speed network in the market based on a current given market condition, as it does not take into account the dynamics of competition, or the long term commitment of consumers. This is the message of the Magyar Telekom decision, which is currently under judicial review.
- Are there specific markets or forms of advertising that will be in the GVH’s focus?
The digital economy is currently in the focus of the GVH. We may say that from a consumer protection point of view we focus on the attention-based markets where competitors compete for the attention of consumers, as in such markets competitors are able to make profit from advertising revenues, thereby enabling them to further increase their capabilities to provide more services absorbing consumers’ attention. Consequently, the market players of digital markets must refrain from calling or absorbing unfairly the attention of the consumers since it distorts competition. The digital or attention-based markets create new forms of advertising. One only needs to think of social media where it is expected that consumers will be informed if a post does not reflect a personal opinion, but is instead a form of paid or sponsored advertising.