Vj-142/1997/10
"RELIKVIA" FUNERAL SERVICES
In the town of Sopron there are four cemeteries with mixed ownership operating on the submarket of the funeral services with two competitors on the supply-side. Two of these four cemeteries belong to the municipality and the other two are denominational ones (Catholic and Lutheran).
The owners concluded contracts with undertakings on the operating of the cemetery. The Irisz Plc. is the operator of the municipal cemeteries and the catholic one, while the Relikvia Plc. (defendant party in the case) concluded an agreement on the operation of the cemetery owned by the Lutheran Church of Sopron. These contracts allowed for each of the undertakings to collect fees from third party undertakers. (The operators mutually informed each other of the fees applied.)
The OEC launched an investigation against Relikvia, because its conduct was distorting the market. Relikvia didn`t charge any fee at its own funerals, and applied fees only in relation to other undertakings meaning to funerals performed by its competitors.
The relevant market is the Lutheran cemetery in Sopron. Relikvia is the only operator which supplies Lutheran ritual funerals. Because of the lack of other similar operators, Relikvia is in a dominant position.
In Sopron the Lutheran funerals amount to about 13% of the totality of funerals, out of which 70% was accomplished by Relikvia.
The Lutheran Church concluded a contract with Relikvia, which covered only the tasks in connection with the keeping and operating of the cemetery. Operating the establishments, and determining of the charged fee for using these establishments is the task of the Lutheran Church itself. By this agreement Relikvia was obliged to use the fee for the maintenance of the cemetery. According to the contract
"Relikvia doesn`t pay charges for its own funerals, in order to equalise the contractual fee"
. The Lutheran Church inserted this clause as Relikvia contributed by its work to the operational costs of the cemetery, therefore it did not need to pay any fee. In the relevant period - with the an exception of one funeral - it was only Relikvia and Irisz which provided funeral services. This means that only the competitor Irisz had to pay the fees, therefore only this competitor`s consumers had to bear these costs.
The content and the sum of the invoice of this kind of services - i.e. the funeral service in the Lutheran cemetery - is various and depends on the supplier undertaking. If the service is ordered at the competitor Irisz, the price has three parts:
- the undertaking includes the 12.000 Ft. fee (which is defined by Relikvia) into its own service fee,
- the fee for the service provided by the Lutheran Church,
- the fee for use of the mortuary.
If the funeral service is ordered directly from Relikvia, the price includes only the fee for the service of Relikvia and the service of the Lutheran Church. This means that the consumers needn`t pay a fee for using the cemetery as in the case of Irisz-funerals.
In the relevant period the costs of the maintenance, falling as an average on one funeral, borne by Relikvia were less than 35% of the fee collected from Irisz. This means that, taken into consideration the low ratio of the number of Irisz-funerals to that of Relikvia-funerals, the total costs of the maintenance of the cemetery were paid by Irisz.
Finally the investigator proposed based upon the findings of the investigation to the Competition Council to establish the infringement.
The Competition Council terminated the proceedings.
It examined the dominant position from the customers` point of view. It regarded the bereaved as customers, because they use the funeral service and they pay the costs after all.
The Competition Council pointed out, that there are customers, who use the Lutheran cemetery not for religious but for other reasons. In respect of these clients Relikvia did not hold a dominant position, because these customers had the freedom of choice to use any cemetery in Sopron.
The other customers, who choose the Lutheran cemetery because of their religion are captivated consumers. Considering these customers the defendant has the opportunity - in particular at its derivative function when it has the power to determine the fees - to abuse its market position and to exclude its competitors from the market to the detriment of the customers. In this aspect it is obvious that the situation can not be evaluated without the consideration of the relevant product (service) and the correlation of the customers.
The product is under the control of the Lutheran Church, and the captivated consumers are the members of the congregation. This correlation do not establish a dominant position, because it is ostensible, as the customers themselves (and their representatives) give the right to the operator to determine the fee.
With a view of the above mentioned the Competition Council didn`t find the dominant position established and therefore it terminated the proceedings.
February 12, 1998. Budapest
Vérné dr. Labát Éva sk. előadó
Fógel Jánosné dr. sk.
dr. Györffy István sk.
Ágoston Marika