Hungary ‘monopolized’ school textbook distribution, ECHR rules

Issues

The European Court of Human Rights (ECHR) on Tuesday ruled that the state of Hungary had "monopolized" the school textbook distribution market, violating companiesʼ property rights, Hungarian news agency MTI reported.

The case was brought by textbook distributors Könyv-Tár, Suli-Könyv and Tankönyv-Ker, who argued that a single company, Könyvtárellató Nonprofit Kft., had effectively monopolized the market after lawmakers centralized the management of schools in 2011 and 2012. They also argued that the new rules had given Könyvtárellató a 20% margin, compared to their margins of 3-5%, without compensating former market players.

According to the ruling, the Hungarian authorities violated stipulations of property protection in the European Convention on Human Rights.

The ECHR found the government measures "imposed an unfair burden on the companies, which had been deprived of their clientele" and had "led effectively to a monopolized market in school book distribution."

In particular, the court held that the transition period to the new textbook distribution system had been only 18 months, distribution companies had not been asked to take part in any of the new, closed tenders run by the state school book distribution body, and no measures had been put in place to compensate the companies for their loss of business.

Before the government measures were implemented, there were six large and 30 medium-sized textbook distributors, the court noted.

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