The Hungarian Competition Authority (“HCA”) just published a new draft notice relating to its leniency policy, open to comments until 15 April 2016. An interesting feature of the draft is that for the first time it discusses so-called “hub-and-spoke” arrangements, which have not yet been addressed by the HCA.
In a hub-and-spoke arrangement, the horizontal anti-competitive agreement between two players (manufacturers/suppliers or even retailers – the “spokes”) is transmitted via a “hub”, i.e. another entity that is active on a different level of the vertical supply chain, and who is in commercial relationship with the “spokes”.
The draft notice makes it clear that while purely vertical agreements (without horizontal elements) cannot be subject to a leniency application in Hungary, an arrangement with vertical as well as horizontal features (such as a hub-and-spoke cartel) can.
The HCA’s draft notice appears amidst a recent public campaign relating to the discovery of cartels. The HCA has also opened a chat-room on its website for the public where notifications on suspected cartels can be supplied to the HCA on an anonymous basis. The Competition Act promises an award for informants who provide to the HCA evidence of a yet undiscovered cartel.
Such recent activity is a clear sign of the HCA’s solid determination to discover cartels in Hungary. To date there is no relevant practice in Hungary relating to hub-and-spoke cartels. Therefore, for local operations, it may be more challenging to prevent and detect hub-and-spoke arrangements than other horizontal arrangements.