The banal buck of DIGI can hurt much more than 20 million

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As we wrote yesterday, DIGI was fined HUF 20 million in a decision by the Hungarian Competition Authority (GVH) to close the Invitel merger for an seemingly banal administrative buck, from which, in the authority's view, it did not come. which had virtually no effect on competition. However, the service provider may fail to multiply this amount if the National Media and Communications Authority (NMHH) sets the same conflict of interest conditions in its forthcoming autumn frequency sale procedure as in the two previous cases, and as a result of which the Romanian-owned company


Yesterday's press release on the subject of the GVH only reveals that DIGI received a procedural fine for incorrect information service, for the second time in the process of approving the Invitel merger. . The unprecedented case in the domestic telecommunications market has cost the service provider a total of HUF 110 million so far, but in the background the two procedures had much more complex, almost fatal effects, and the two procedures may have an impact on the company's management and mobile market ambitions.

However, the case may have further consequences. based on the guiding principle, as due to the outcome of the 2018 procedure, DIGI was ultimately not even allowed to bid on NMHH’s 5G spectrum auction launched in the fall. In previous sales procedures, the authority specified in detail what conflicts of interest and personnel might be an obstacle to the participation of a person or business in the auction procedure. Among other things, the authority lists that a company which has been the subject of a final official or judicial decision in the 24 months preceding the initiation of the procedure prohibiting the prohibition of an agreement restricting economic competition, the prohibition of abuse of a dominant position or a merger may not take part in the proceedings.

According to unofficial information from last year's sale procedure, DIGI Távközlési Kft. danced back, precisely because of the GVH case concerning the Invitel merger, instead the company's parent company, DIGI Communications NV submitted the application to the auction, however, NMHH did not accept it due to violation of the prohibition of abuse of rights. An interesting side effect of the story is that the ban on decisions in competition cases was not originally included in last year's draft documentation, but at a public hearing last summer, a deputy CEO of Telenor asked the authority that, based on past practice, the clause


NMHH's forthcoming frequency sale process is practically the last chance for DIGI to start with an interpretable amount of frequency blocks for its mobile service, which was launched last year and is currently in test operation. in addition, in the already highly valuable 900 and 1800 MHz bands. Although the draft tender documentation for the new procedure is not yet available, it is unlikely that the authority will change the conditions of participation, ie a situation could easily arise in which DIGI Távközlési Kft. Cannot start in this procedure either (if the new procedure is November 14 By the way, the 2018 case could provide a basis for this, as it was also closed within 24 months.)

Another piquancy of the case is that DIGI imposed a total of several billion forints on its mobile market competitors last year alone. however, according to the tender documents of the GVH, this is not an exclusionary reason, as these fines are invariably due to unfair commercial practices, ie they do not exhaust any of the facts listed above.


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