Vj-15/1997/31
PERSONAL FOREIGN-EXCHANGE ACCOUNTS AT THE OTP BANK
In 9th of November 1993 the OTP Bank set up a new pay off system for foreign-exchange accounts on the basis of currency rates that replaced the pay off system based on foreign currency rates in case of paying off in HUF, which was much more favourable for customers.
In 28th of March 1996 the Bank inserted an advertisement in three daily newspapers in order to let its customers know that the conditions of the personal foreign-exchange accounts` fees and commissions will be changed from 1st of April 1996, and more detailed information can be observed in the branch offices of the Bank. Changes were as follows:
1.) The earlier charge free pay off system based on the same currency as that of the account became subject to charges (0,3%, min. 2 USD).
2.) The foreign-exchange account owners having 50 USD or less during more than 12 months on their accounts will have to pay closing fees at the end of each year.
3.) In the case of domestic transfer of foreign currency amounts which currency is identical with the foreign-exchange account`s foreign currency the commission will grow from 0,5% (min. 3 USD) to 0,15% (min. 5 USD).
In the reviewed period of time 30 banks provided personal foreign-exchange account services in the country, but the leading market player was the OTP Bank with its 57,3 % market share in foreign-exchange account services and 48,4% market share related to the total amount of foreign exchange on those accounts.
In Budapest and other large towns besides the OTP Bank the significant commercial banks, - as Budapest Bank, Commercial and Credit Bank, Postabank., Mez_bank. - or at least one of them had got branches running foreign-exchange account services. There are only 14 towns around the country having the possibility to get to account services provided only by OTP Bank branch offices.
The Competition Council established that the OTP Bank committed an abuse of dominant position by altering the foreign-exchange account conditions for clients having opened their accounts before the 1st of April 1996 by charging
- commissions on the accounts in cases of pay off in the same exchange as that of the account,
moreover
- closing fees at 5 to 50 USD accounts with no transfer during the last 12 months.
Furthermore the Competition Council prohibited the continuation of the conduct and imposed a fine of 5 million HUF on OTP Bank.
The Competition Council established that the Bank`s dominant position is significant only against customers opening foreign-exchange account before 1st of April 1996, because for these clients there was only one bank business day between 28 of March and 1 of April for reacting to the new conditions of the provided account services.
Otherwise there`s no reason for establish OTP Bank`s dominant position on the market referring to the (above mentioned) competitors and the Bank`s market share.
According to the Article 21 point a.) of the Competition Act in force it is prohibited to abuse a dominant position with forcing the other party to accept disadvantageous conditions.
The changed conditions (commission and closing fee) are no doubt disadvantageous for the account owners. The clients haven`t got any possibility to counter these measures, so the fact of compelling them by the exploitation of a dominant position cannot be doubted.
The Competition Council mentioned that compelling is always a basic condition for the establishment of the violation of the competition law.
The Competition Council held that the dominant position of the OTP Bank is the result of the developments in March 1996, but as a standard can be established in 1997 too.
As the Competition Council is obliged by the Competition Act to establish the violation of law only at behaviours which were exercised after 1. of January 1997, the Council "condemned" the OTP Bank because of the abuse of a dominant position after 31. of December 1996.
July 3, 1997. Budapest
Vérné dr.Labát Éva sk. előadó
dr. Sólyom Eszter sk.
dr. Bodócsi András sk.
Szabó Györgyi