Vj-138/1997/36

MTZ HUNGÁRIA LTD AND SIX TRADING COMPANIES

MTZ Hungaria Ltd (MTZ Hungaria) is the Hungarian exclusive dealer of Bielorussian MTZ tractors which has 15-20 per cent market share on the Hungarian market.

MTZ Hungaria made co-operation agreements with six trading companies to establish a trading network on selling and servicing MTZ tractors and also selling their parts.

Apart from the safe and professional supply they agreed on the following limitations of competition: (i) dividing the country into six parts, each dealer has exclusive dealing right on the given geographic market, the dealers are allowed to form sub-dealer networks exclusively on their own territory and selling is not allowed out of their territory, (ii) marketing and advertising activity is allowed only on their own territory, (iii) wholesalers can distribute MTZ products only through MTZ Hungaria.

Taking into consideration that such agreements are prohibited under the Art 11 of the Competition Act, the parties applied for an exemption of the Office of Economic Competition (OEC), according to Art. 17 of the Competition Act, which expresses that agreements shall be exempted from the prohibition of Art. 11 on individual application by the decision of the OEC, provided:
- they contribute to a more reasonable organisation of production or distribution, the promotion of technical or economic progress, or the improvement of competitiveness or of the protection of environment,
- they allow consumers a fair share of the resulting benefit,
- the concomitant restriction or exclusion of competition does not exceed the extent necessary to attain economically justified common goals,
- they do not create the possibility of excluding competition in respect of a substantial part of the products concerned.

The Competition Council considered that the conditions of the agreements fulfil the provision of the Competition Act therefore it exempted them from the prohibition and pointed out that contracts do not stipulate further anti-competitive conditions.

Since Government Regulation (53/1997. (III. 26.) of the exemption from the prohibition on restriction of competition of certain groups of exclusive distribution agreements came into force soon after the agreements were made, holding the same criteria as Art 17 of the Competition Act does, the above agreements are exempted also under the group exemption regulation.

March 24, 1998. Budapest

Vérné dr. Labát Éva sk. előadó
dr. Bodócsi András sk.
dr. Györffy István sk.
Ágoston Marika