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Hungary Supreme Court requests preliminary decision on insurance matters from European Court

The competition office GVH has fined two leading insurance companies, the national association of vehicle brand dealers and three insurance brokerages a combined HUF 7 billion over cartelling; the Supreme Court has now asked the European Court to take a preliminary decision due to different court rulings on the matter, the Supreme Court told MTI.

The organizations involved in the agreement restricting competition were Allianz Hungaria Insurance,Generali-Providencia Insurance, the National Association of Vehicle Brand Dealers, Hungarian Peugeot Brand Dealers Insurance Broker, Hungarian Opel Dealers Broker, and Porsche Insurance Broker.

Under the agreement, the insurance companies accepted the rise of the fees charged by the brand dealers - as repair and maintenance workshops – by linking it to the ratio of the insurance policies brokered by the dealers. In addition, they also gave target commissions as incentives to the brokers operating at brand dealers. GVH considered these agreements restricting competition. They also established that the association was involved in the organization of the price cartel.

The Budapest Municipal Court annulled, however, some of GVH's accusatory resolutions and slightly reduced the fines. The Budapest Appeals Court then confirmed the original GVH resolutions including the fines.

One of the questions the Supreme Court had to decide in the review procedure is whether the agreements can in themselves be considered as aiming to restrict competition. As the “aim to restrict competition” and “vertical agreement” are notions taken over from EU competition law, therefore, it is a fundamental community interest to have an accurate and uniform interpretation thereof even if EU law did not have to be directly applied on the matter.

The Supreme Court has therefore suspended discussing the case and initiated a preliminary decision-making procedure by the European Commission. The Supreme Court wants to know the position of the European Court as to whether the agreements in question are contrary to the relevant provisions of EU law. (MTI-Econews)