The Value Of Information - Highest Fine Ever Imposed On An Association Of Undertakings

On 11 January 2016, the Hungarian Competition Authority (Authority) announced the highest fine it has ever imposed on an association on account of horizontal information exchange. The fine of ca. EUR 12.7 million (HUF 4 billion) was imposed on the Hungarian Banking Association (Association) for the Association's database, which included not only strategically relevant, but also confidential data. Undoubtedly, the continuous flow of information is one of the key drivers of business and economic growth. The more unconstrained the flow of information becomes, the more conscious undertakings must be in order to identify the inherent legal risks of information exchange and its lawful limits. The Authority's decision is one of the most recent indicators of the relevance of such considerations.

The Association and the bank database

The Association was established in 1989 in order to represent the interests of the Hungarian banking sector. In June 2000, the Association introduced a rather significant extension of its already existing bank database, which then operated until 2012. This extended version involved a wide range of strategically relevant and confidential data on the financial services provided by the members of the Association and was individually accessible in a well-organized manner. The Association's original aim (based on contemporaneous evidence) was to "aid the members with positioning on the market". According to the ruling of the Authority, this behaviour constituted a cartel in the form of unlawful horizontal information exchange and as such infringed not only Hungarian, but also EU competition law.

Sanctions

The Authority imposed a fine of ca. EUR 12.7 million on the Association and ca. EUR 50,000 (HUF 15 million) on the Institute for Training and Consulting in Banking, which had also contributed to the database's maintenance. The Authority imposed the above fine despite the fact that a significant amount of the information stored in the extended database was publicly available and that the Association voluntarily ceased to operate the database upon commencement of the proceeding. In addition, the Authority deemed the commitments proposed by the Association as insufficient and did not accept them.

Secondary liability of the banks

The Authority imposed the fine on the Association itself and not on the Association's member banks; however, the Authority also indicated the joint and several secondary liability of the 33 banks...