In its most recent decision dated 11 January 2016, the Hungarian Competition Office (“HCO”) established that the Hungarian Banking Association (in Hungarian Magyar Bankszövetség, “HBA”) in collaboration with the International Training Centre for Bankers Ltd. (in Hungarian Nemzetközi Bankárképző Központ Zrt., “ITCB”) had been operating the BankAdat database with the potential effect of  restricting competition and violated the cartel prohibition under both Hungarian law and Article 101 of the Treaty on the Functioning of the European Union (“TFEU”). The HCO imposed a total fine of more than HUF 4 billion (approx. EUR 13 million).

  1. The operation of the BankAdat

BankAdat, operated between 9 June 2000 and 2 December 2012, allowed BankAdat member banks to exchange bank-specific, individual, confidential and strategic data resulting in the lessening of uncertainty related to competitors’ strategies. BankAdat ensured that the participating banks obtained up-to-date information about the market, market processes, efficiency, business policies and strategies of competitors allowing them to use the information for making business plans, creating strategies and for product development. The HCO found the exchange of individual data via BankAdat to be unlawful and terminated the procedure with regard to the accessibility and downloading of aggregated data.

  1. The horizontal information exchange and the sanction imposed by the HCO

According to the HCO BankAdat’s information flow led to a horizontal information exchange infringing the cartel prohibition under both Hungarian law and the TFEU resulting in an exceptionally wide range of data sharing also affecting competition in the dimensions of price, quality and innovation. The participating financial institutions’ combined market share exceeded 80% throughout the 12 years BankAdat was in use.

Although in the course of the procedure the HBA proposed commitments to “reform” and re-design BankAdat in a compliant format, the HCO refused to accept the commitments as it felt the proposal was not capable of effectively protecting the public interest.

As a result of the infringement the HCO imposed a fine of HUF 4 billion (approx. EUR 13 million) on HBA and HUF 15 million (approx. EUR 50,000) on ITCB. However, due to the HBA’s financial situation, it accepted the HBA’s request to be allowed to pay the fine in 20 installments of HUF 200 million (approx. EUR 630,000).

  1. The indirect responsibility of the HBA’s member banks

The HCO established that the HBA was the operator and orchestrator of the information cartel and that the ITCB acted as contributor, however, it did not establish the direct responsibility of the banks contributing to and using BankAdat as it argued that the establishment and operation of BankAdat were made at HBA-level. Nevertheless, the HCO ruled that in the event the HBA refused to pay or enforcement attempts fail then the HBA members involved in the information exchange shall bear “indirect” liability. In such a case, the HCO would – in a separate order – establish the joint and several liability of the banks to pay the fine imposed on the HBA.  

  1. Potential aftermath of the case

The HUF 4 billion fine is the highest fine imposed upon a sole party under investigation in the HCO’s history, which of course had huge publicity in the Hungarian press.

In its press release commenting on the HCO’s decision, the HBA stated that it finds the HCO’s decision unfounded both from a professional and legal perspective and intends to challenge the decision in all ways possible. The HBA found the HCO’s decision particularly surprising and the amount of the fine excessive as the ministries and various institutions of the Hungarian State were not only funding the launch of the database, but also using and relying upon BankAdat data. Although the HBA stated that it will comply with the payment of the fine (it is legally obligated to do so, irrespective of any challenge of the HCO’s decision) it will be interesting to see whether the “indirect”, joint and several liability of the member banks will be invoked.