ACQUISITION OF CONTROL OVER POSTABANK ÉS TAKARÉKPÉNZTÁR RT. BY MAGYAR POSTA RT.
The Competition Council stated in its decision that the acquisition of control over Postabank Takarékpénztár Rt. (hereinafter Postabank) by Magyar Posta Rt. (hereinafter Post) is not a concentration.
The government decided in its decision of 30 June 2001 that the its stake in Postabank will be passed on the Post. In March 2002 the Post notified the transaction for authorization to the Office of Economic Competition.
The parties concerned
Postabank is a wholly owned state entity active in the field of various financial services. The ownership rights of the state are exercised through the appointed minister.
The Post is the incumbent postal operator of Hungary fully controlled by the state as well, the Minister of Transport and Water management exercises the ownership rights.
The Decision of the Competition Council
In this case the undertakings directly concerned by the transaction were both property of the Hungarian state, thus according to the law in force the government in power controls both the Post and Postabank. The Competition Council had to make its decision concerning the question of principle whether in the case of state undertakings the same ability to influence the strategic business decisions of an undertaking creates control in terms of competition law as regarding the private sector. Article 23 (2) of the Competition Act determines the cases where an undertaking acquires direct control over another undertaking, and these conditions apply to state undertakings as well.
Pursuant Article 23 (1) a concentration could be effected only between two or more previously independent undertakings. Consequently the acquisition of control over Postabank by the Post could dealt as a concentration under the Hungarian competition law only if none of the undertakings concerned controls the other, or none of them is under sole or joint control of another same company. Before the transaction and afterwards as well the state controls both Postabank and the Post by having the ownership of the shares entitling it to exercise majority voting rights, and by appointing, electing and recalling the majority of executive officials.
The Competition Council stated that in the case of state owned undertakings the same influencing potential creates control pursuant the Competition Act as in the case of private companies. In other words there is no difference in the concept of control according to public or private ownership. Whenever the state passes over the controlling rights in one its companies to another state undertaking than not the fact of control changes but just the method of control. Therefore there was no concentration between Postabank and the Post.
On the other hand we have to differentiate the agreements or concerted practices between state owned undertakings. Pursuant Article 15 (2) state undertakings are deemed to be independent whenever they possess separate decision-making rights in determining their market conduct. The Competition Council has to determine whether the concrete conduct was decided and implemented by the undertaking as an autonomous market entity or just the will of the controlling state institution manifested in the alleged behaviour.
In conclusion the Competition Council said the following concerning state undertakings and the application of competition law:
The Competition Act has one, uniform concept of control, which is determined by Article 23 (2),therefore no difference should be made according to the form of ownership. Changes in the structure of control in the case of state undertakings are not concentrations, because the parties cannot be regarded as independent entities.
For the purpose of Article 11 (restrictive agreements), independence should be interpreted pursuant Article 15 (2) whereby state undertakings could be dealt as independent if they determine their market conduct on their own.
A state undertaking has independent decision-making rights if for the purpose of a concrete market behaviour or decision, it is an autonomous market entity, consequently the concerned decision is not a manifestation of the controlling state institution`s will or instruction.