2002/412/EC,ECSC,Euratom: Decision No 1/2002 of the Association Council, Association between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, of 29 January 2002 repealing and replacing Decision No 2/96 of the Association Council adopting the rules necessary for the implementation of Article 62(1)(i), (1)(ii) and (2) of the Europe Agreement between the European Communities and their Member States, of the one part, and the Republic of Hungary, of the other part, and the rules implementing Article 8(1)(i), (1)(ii) and (2) of Protocol No 2 on ECSC products to that Europe Agreement
Date: 2002-01-29
Institutions: EC–Hungary Association Council
Subjects: Hungary, association agreement (EU), competition, dominant position, inter-company agreement, merger control, trading operation

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II

(Acts whose publication is not obligatory)

COUNCIL

DECISION No 1/2002 OF THE ASSOCIATION COUNCIL, ASSOCIATION BETWEEN THE
EUROPEAN COMMUNITIES AND THEIR MEMBER STATES, OF THE ONE PART, AND THE
REPUBLIC OF HUNGARY, OF THE OTHER PART,

of 29 January 2002

repealing and replacing Decision No 2/96 of the Association Council adopting the rules necessary
for the implementation of Article 62(1)(i), (1)(ii) and (2) of the Europe Agreement between the
European Communities and their Member States, of the one part, and the Republic of Hungary, of
the other part, and the rules implementing Article 8(1)(i), (1)(ii) and (2) of Protocol No 2 on ECSC
products to that Europe Agreement

(2002/412/EC, ECSC, Euratom)

THE ASSOCIATION COUNCIL,

Having regard to the Europe Agreement establishing an associa-
tion between the European Communities and their Member
States, of the one part, and the Republic of Hungary, of the
other part (1), and in particular Article 62(3) thereof,

Having regard to Protocol No 2 on ECSC products to that
Europe Agreement and in particular Article 8(3) thereof,

Whereas:

(1)

(2)

(3)

On 6 November 1996 the Association Council adopted
Decision No 2/96 adopting the rules necessary for the
implementation of Article 62(1)(i), (1)(ii) and (2) of the
Europe Agreement, and the rules implementing Article
8(1)(i), (1)(ii) and (2) of Protocol No 2 on ECSC products
to that Europe Agreement (2).

In Judgement No 30 of 25 June 1998 the Hungarian
Constitutional Court declared the first and second para-
graphs of Article 1 and Article 6 of the Annex to the
Hungarian Government Decree No 230 of 26 December
1996, which transposed Decision No 2/96 of the Asso-
ciation Council into the Hungarian legal system, uncon-
stitutional.

The criteria arising from the application of the rules of
Articles 85 and 86 of the EC Treaty (now Articles 81
and 82 EC) as referred to in Article 62(2) of the Europe
Agreement as well as the criteria arising from the appli-
the rules of Articles 65 and 66 ECSC as
cation of

(1) OJ L 347, 31.12.1993, p. 1.
(2) OJ L 295, 20.11.1996, p. 29.

referred to in Article 8(2) of Protocol No 2 on ECSC
products to that Europe Agreement need to be further
specified, so that they can enter the Hungarian legal
system in a way complying with the Hungarian Constitu-
tion and the constitutional concerns expressed in the
above judgement of the Hungarian Constitutional Court.

(4)

(5)

In so specifying the criteria, several purposes need to be
taken into account according to the procedure in which
the criteria are applied or invoked.

The criteria shall be specified in different ways according
to those different purposes,

HAS DECIDED AS FOLLOWS:

Article 1

Decision No 2/96 of the Association Council,
including its
Annex, is hereby repealed and replaced by the present Decision
of the Association Council, (including its Annex hereto and the
Appendix attached to that Annex.

Article 2

Any practices under Article 62(1)(i) and (ii) of the Europe
Agreement and Article 8(1)(i) and (ii) of Protocol No 2 on ECSC
products to that Europe Agreement shall be assessed according
to the provisions set out in the Annex to the new Decision.

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At the request of either Party, the Association Committee shall review the Appendix attached to the Annex
to this Decision, with a view to adapting it to newly adopted or amended Community acts.

Article 3

This Decision shall enter into force on the first day of the third month following the adoption of this Deci-
sion.

Article 4

Done at Brussels, 29 January 2002.

For the Association Council

The President

J. PIQUÉ I CAMPS

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ANNEX

IMPLEMENTING RULES FOR THE APPLICATION OF THE COMPETITION PROVISIONS APPLICABLE TO
UNDERTAKINGS PROVIDED FOR IN ARTICLE 62(1)(i), (1)(ii) AND (2) OF THE EUROPE AGREEMENT
BETWEEN THE EUROPEAN COMMUNITIES AND THEIR MEMBER STATES, OF THE ONE PART, AND THE
REPUBLIC OF HUNGARY, OF THE OTHER PART, AND THE RULES IMPLEMENTING ARTICLE 8(1)(i), (1)(ii)
AND (2) OF PROTOCOL No 2 ON ECSC PRODUCTS TO THAT EUROPE AGREEMENT

TITLE I

SUBSTANTIVE RULES

The definition of the criteria referred to in Article 62(2) of
the Europe Agreement

Article 1

Without prejudice to the obligations of the Parties under the
Europe Agreement,
— for all purposes that might arise in the context of the
invocation,
the criteria
interpretation or application of
referred to in Article 62(2) of the Europe Agreement in
procedures before
the European
Communities under the present Annex, these criteria shall
comprise all substantive norms of the acquis communautaire
as they are developed by the Community institutions in the
field of Community anti-trust law,

the Commission of

— for all purposes that might arise in the context of the
the criteria
interpretation or application of
invocation,
referred to in Article 62(2) of the Europe Agreement in
procedures before the Hungarian Office of Economic
Competition and the Hungarian courts under the present
Annex, these criteria shall comprise the substantive rules
specified in Articles 2 to 5 of the present Annex as well as
its Appendix.

Agreements between undertakings, decisions by associa-
tions of undertakings and concerted practices

Article 2

The following shall be prohibited as incompatible with

1.
the functioning of the Europe Agreement:

all agreements between undertakings, decisions by associations
of undertakings and concerted practices which may affect trade
between Parties and which have as their object or effect the
prevention, restriction or distortion of competition within the
territory covered by the Europe Agreement and in particular
those which:

(a) directly or indirectly fix purchase or selling prices or any

other trading conditions;

(b) limit or control production, markets, technical develop-

ment, or investment;

(e) make the conclusion of contracts subject to acceptance by
the other parties of supplementary obligations which, by
their nature or according to commercial usage, have no
connection with the subject of such contracts.

Any agreements or decisions prohibited pursuant to this

2.
Article shall be automatically void.

The provisions of paragraph 1 may, however, be declared

3.
inapplicable in the case of:

— any agreement or category of agreements between under-

takings,

— any decision or category of decisions by associations of

undertakings,

— any concerted practice or category of concerted practices,

which contributes to improving the production or distribution
of goods or to promoting technical or economic progress,
while allowing consumers a fair share of the resulting benefit,
and which does not:

(a) impose on the undertakings concerned restrictions which
are not indispensable to the attainment of these objectives,

(b) afford such undertakings the possibility of eliminating
competition in respect of a substantial part of the products
in question.

4. Without prejudice to paragraphs 1 to 3, for the assess-
ment of
the agreements, decisions and concerted practices
referred to in paragraph 1, the principles contained in the acts
of the European Communities listed in the Appendix attached
to the present Annex shall also apply mutatis mutandis.

Abuse of a dominant position

Article 3

Any abuse by one or more undertakings of a dominant posi-
tion within the territory covered by the Europe Agreement or
in a substantial part of it shall be prohibited as incompatible
with the functioning of the Europe Agreement insofar as it may
affect trade between the Parties.

Such abuse may,

in particular, consist in:

(c) share markets or sources of supply;

(d) apply dissimilar conditions to equivalent transactions with
other trading parties, thereby placing them at a competitive
disadvantage;

(a) directly or indirectly imposing unfair purchase or selling

prices or other unfair trading conditions;

(b) limiting production, markets or technical development to

the prejudice of consumers,

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(c) applying dissimilar conditions to equivalent transactions
thereby placing them at a

with other trading parties,
competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance
by the other parties of supplementary obligations which, by
their nature or according to commercial usage, have no
connection with the subject of such contracts.

Effect on trade between the Community and Hungary

Article 4

For the purposes of Article 62(1)(i)-(ii) and (2) of the Europe
Agreement and of this present Annex, the question of whether
an anti-competitive agreement or the abuse of a dominant
position may have an effect on trade between the Community
and Hungary shall be determined by establishing, on the basis
of a set of objective factors of law or of fact, whether the
practice in question may have an influence, direct or indirect,
actual or potential on the pattern of
trade between the
Community and Hungary.

Activities of minor importance

Article 5

1.
1. Anti-competitive activities under Article 2(1) whose
effects on trade between the Parties or on competition are
(i) of the Europe
negligible do not fall under Article 62(1)
Agreement and under the prohibition in Article 2(1) of the
present Annex and, therefore, are not to be treated under the
present Annex.

Negligible effects within the meaning of paragraph 1 are
2.
generally presumed to exist when the aggregate market shares
held by all of the participating undertakings with regard to the
goods or services which are the subject of
the agreement
together with the participating undertakings' other goods or
services which are considered by users to be equivalent in view
of their characteristics, price and intended use, do not exceed:

(a) the 5 % threshold, where the agreement is made between
undertakings operating at the same level of production or
of marketing (‘horizontal’ agreement);

(b) the 10 % threshold, where the agreement is made between
undertakings operating at different levels of production or
of marketing (‘vertical’ agreement);

of the total market for such goods or services in the area of the
common market affected by the agreement, and the Hungarian
market affected by the agreement, respectively.

4. With regard to:

(a) horizontal agreements which have as their object:

— to fix prices or to limit production or sales, or
— to share markets or sources of supply;

(b) vertical agreements which have as their object:

— to fix resale prices, or
— to confer territorial protection on the participating

undertakings or third undertakings,

the provisions of Article 62(1)(i) of the Europe Agreement and
the prohibition in Article 2(1) of the present Annex may be
applied even where the aggregate market shares held by all of
the participating undertakings remain below the above thresh-
olds.

TITLE II

COMPETENCE OF THE COMPETITION AUTHORITIES AND
PROCEDURAL RULES

Competence of the competition authorities of the Parties

Article 6

The cases under Article 62(1)(i) and (ii) of the Europe
1.
Agreement are dealt with by the Commission of the European
Communities
the
Community side, and the Office of Economic Competition on
the Hungarian side, according to the procedural rules under
this Title.

(Competition Directorate-General)

on

2.
The competence of the Commission of the European
Communities and the Office of Economic Competition to deal
with these cases shall flow from the existing procedural rules of
the respective legislation of
the Community and Hungary,
including where these rules are applied to undertakings located
outside the respective territory.

Competence of both competition authorities (notification,
consultation, comity and finding a mutually acceptable
solution)

Article 7

1.
The competition authorities shall notify to each other
those cases they are dealing with, which appear also to fall
under the competence of the other authority.

This situation may arise in particular in cases concerning

2.
activities that:
— involve anti-competitive activities carried out in the other

authority's territory,
relevant

— are

to enforcement

activities of

the other

In the case of a mixed horizontal/vertical agreement or where it
is difficult to classify the agreement as either horizontal or
vertical, the 5 % threshold is applicable.

competition authority,

— involve remedies that would require or prohibit particular

conduct in the other authority's territory.

3.
The said agreements do not fall under Article 62(1)(i) of
the Europe Agreement and under the prohibition in Article
2(1) of the present Annex if the above market shares are
exceeded by no more than one-tenth during two successive
financial years.

Notification under this Article shall

3.
include sufficient
information to permit an initial evaluation by the recipient
party of any effects on its interests. Copies of the notifications
shall be submitted on a regular basis to the Association
Committee.

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Notification shall be made in advance, as soon as possible
4.
and at the latest at the stage of an investigation still far enough
in advance of the adoption of a settlement or decision, so as to
facilitate comments or consultations and to enable the
proceeding authority to take into account the other authority's
views, as well as to take such remedial action it may find
feasible in accordance with the present Annex, in order to deal
with the case in question.

5. Whenever the Commission of the European Communities
or the Office of Economic Competition consider that anti-
competitive activities carried out on the territory of the other
authority are substantially affecting important interests of the
respective Party,
it may request consultation with the other
authority, or it may request that the other party's competition
authority initiate any appropriate procedures with a view to
taking remedial action. This is without prejudice to any action
by the requesting Party under the present Annex and does not
hamper the full freedom of ultimate decision of the authority
so addressed.

6.
The competition authority so addressed shall give full and
sympathetic consideration to such views and factual materials
as may be provided by the requesting authority and, in partic-
ular, to the nature of the anti-competitive activities in question,
the enterprises involved and the alleged harmful effects on the
important interests of the requesting Party.

7. Without prejudice to any of their rights or obligations,
the competition authorities involved in consultations under this
Article shall endeavour to find a mutually acceptable solution
in the light of the respective important interests involved.

Competence of one competition authority only

Article 8

the

falling under

competence of one
Cases
competition authority, and which may affect important inter-
ests of the other Party, shall be notified to the other authority,
without formal request by the latter.

exclusive

Request for information

Article 9

1. Whenever the competition authority of a Party becomes
aware of the fact that a case, falling also or only under the
competence of the other authority, appears to affect important
interests of the first Party, it may request information about
this case from the proceeding authority.

2.
The proceeding authority shall give sufficient information
to the extent possible and at a stage of its proceedings far
enough in advance of the adoption of a decision or settlement
to enable the requesting authority's views to be taken into
account.

Secrecy and confidentiality of information

Article 10

1.
Having regard to Article 62(7) of the Europe Agreement,
neither competition authority is required to provide informa-
tion to the other authority if disclosure of that information to

the
the requesting authority is prohibited by the law of
authority possessing the information, or would be incompat-
ible with important interests of the Party whose authority is in
possession of the information.

2.
Each authority agrees to maintain, to the fullest extent
possible, the confidentiality of any information provided to it
in confidence by the other authority.

Merger control

Article 11

the European Communities
Whenever the Commission of
applies Council Regulation (EEC) No 4064/89 of 21 December
1989 on the control of concentrations between undertakings
with regard to transactions that have a significant impact on
the Hungarian economy, the Office of Economic Competition
shall be entitled to express its view in the course of
the
procedure taking into account the time limits as provided for
in the aforementioned Regulation. The Commission of the
European Communities shall give due consideration to that
view, without prejudice to its powers to take appropriate
actions.

Association Council

Article 12

1. Whenever the procedures provided for in the Articles
above do not lead to a mutually acceptable solution, as well as
in other cases explicitly mentioned in these Implementing
Rules, an exchange of views shall take place in the Association
Council at
the request of one Party within three months
following the request.

2.
Following this exchange of views, or after expiry of the
period referred to in paragraph 1, the Association Council may
make appropriate recommendations for the settlement of these
cases, without prejudice to Article 62(6) of the Europe Agree-
ment. In these recommendations, the Association Council may
take into account eventual failure of the requested authority to
give its point of view to the requesting authority within the
period referred to in paragraph 1 to this Article.

3.
These procedures in the Association Council are without
prejudice to the powers of the competition authorities of the
Parties under the present Annex to take appropriate actions.

Negative conflict of competence

Article 13

When both the Commission of the European Communities and
the Office of Economic Competition consider that neither of
them is competent to handle a case on the basis of their
respective legislation, an exchange of views shall take place on
in the Association Council. The Community and
request
Hungary shall endeavour to find a mutually acceptable solu-
tion. The Association Council may make appropriate recom-
mendations without prejudice to Article 62(6) of the Europe
Agreement and the rights of individual Member States of the
European Communities on the basis of their competition rules.

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Administrative assistance

Article 14

The Commission of the European Communities and the Office of Economic Competition shall provide for
practical arrangements for mutual assistance or any other appropriate solution concerning in particular the
question of translations.

The acts listed in the Appendix attached to the present Annex shall be published in Hungary in the
Hungarian language. The publication may contain the necessary explicative and adaptatory notes.

Article 15

ECSC Treaty

Article 16

The provisions contained in the present Annex shall, mutatis mutandis, also apply with respect to the coal
and steel sector as referred to in Protocol 2 to the Europe Agreement.

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Appendix

ACTS REFERRED TO IN ARTICLE 2(4) OF THE ANNEX

A. Vertical agreements

— Commission Regulation (EC) No 2790/1999 of 22 December 1999 on the application of Article 81(3) of the

Treaty to categories of vertical agreements and concerted practices (OJ L 336, 29.12.1999 p. 21).

— Commission Regulation (EC) No 1475/95 of 28 June 1995 on the application of Article 85(3) of the Treaty to
certain categories of motor vehicle distribution and servicing agreements (OJ L 145, 29.6.1995, p. 25).

B. Licensing agreements for the transfer of technology

— Commission Regulation (EC) No 240/96 of 31 January 1996 on the application of Article 85(3) of the Treaty to

certain categories of technology transfer agreements (OJ L 31, 9.2.1996, p. 2).

C. Specialisation and research and development agreements

— Commission Regulation (EC) No 2658/2000 of 29 November 2000 on the application of Article 81(3) of the

Treaty to categories of specialisation agreements (OJ L 304, 5.12.2000, p. 3).

— Commission Regulation (EC) No 2659/2000 of 29 November 2000 on the application of Article 81(3) of the

Treaty to categories of research and development agreements (OJ L 304, 5.12.2000, p. 7).

D. Insurance sector

— Council Regulation (EEC) No 1534/91 of 31 May 1991 on the application of Article 85(3) of the Treaty to certain
categories of agreements, decisions and concerted practices in the insurance sector (OJ L 143, 7.6.1991, p. 1).
— Commission Regulation (EEC) No 3932/92 of 21 December 1992 on the application of Article 85(3) of the Treaty
to certain categories of agreements, decisions and concerted practices in the insurance sector (OJ L 398,
31.12.1992, p. 7).

E. Transport

— Council Regulation (EEC) No 1017/68 of 19 July 1968 applying rules of competition to transport by rail, road and
inland waterway (OJ L 175, 23.7.1968, p. 1 (in particular Article 4: exemption for groups of small and
medium-sized undertakings)).

— Council Regulation (EEC) No 4056/86 of 22 December 1986 laying down detailed rules for the application of
Articles 85 and 86 of the Treaty to maritime transport (OJ L 378, 31.12.1986, p. 4 (in particular Articles 3 and 6:
exemption for agreements between carriers concerning the operation of scheduled maritime transport services, and
exemption for agreements between transport users and conferences concerning the use of scheduled maritime
transport services)).

— Commission Regulation (EC) No 823/2000 of 19 April 2000 on the application of Article 81(3) of the Treaty to
certain categories of agreements, decisions and concerted practices between liner shipping companies (consortia)
(OJ L 100, 20.4.2000, p. 24).

— Commission Regulation (EEC) No 1617/93 of 25 June 1993 on the application of Article 85(3) of the Treaty to
certain categories of agreements and concerted practices concerning joint planning and coordination of schedules,
joint operations, consultations on passenger and cargo tariffs on scheduled air services and slot allocation at
airports (OJ L 155, 26.6.1993, p. 18 (as amended by Regulation (EC) No 1523/96 (OJ L 190, 31.7.1996, p. 11)
and Regulation (EC) No 1083/1999 (OJ L 131, 27.05.1999 p. 27))).

F. Notices of the Commission of the European Communities

— Notice concerning its assessment of certain subcontracting agreements in relation to Article 85(1) of the EEC

Treaty (OJ C 1, 3.1.1979, p. 2).

— Notice on the application of the EC competition rules to cross-border credit transfers (OJ C 251, 27.9.1995, p. 3).
— Commission Communication on clarification of Commission recommendations on the application of competition

rules to new transport infrastructure projects (OJ C 298, 30.9.1997).

— Notice on the definition of the relevant market for the purposes of Community competition law (OJ C 372,

9.12.1997, p. 5).

— Commission notice — Guidelines on vertical restraints (OJ C 291, 13.10.2000, p. 1).
— Commission Notice — Guidelines on the applicability of Article 81 of the EC Treaty to horizontal cooperation

agreements (OJ C 3, 6.1.2001, p. 2).