On 25 January 2022, the Hungarian Competition Authority (“GVH”) announced that it had completed its accelerated sector inquiry into COVID antigen rapid tests (“Rapid Tests”). The GVH’s sector inquiry found that the retail prices of the domestically available Rapid Tests were high in European comparison and that in many cases consumers were not properly informed about the Rapid Tests. As a result, the GVH made several recommendations to co-authorities, the legislator and market players.
We reported in the January 2022 issue of our newsletter that the GVH launched an accelerated sector inquiry into the COVID Rapid Tests on 23 December 2021. During the inquiry, the GVH concluded unannounced inspections, requested several market players to submit data, held hearings with the National Institute of Pharmacy and Nutrition (“OGYÉI”), requested information from all EU competition authorities and the DG Comp, and concluded an online consumer inquiry (so-called sweep). Before publishing its final report (“Report”), market players had the opportunity to submit their comments about the findings of the draft report.
The Report highlights that the high retail prices are the result of the weak competition in the sale of the Rapid Tests, the fact that the Rapid Tests are produced exclusively abroad and of the long value chain, where new margins appear in the consumer price at all levels of the value chain. The Rapid Tests are also considered as medical devices and as such may currently only be sold in licensed specialised shops or pharmacies. The Report also identified several commercial practices making it difficult for consumers to be fully and unambiguously informed about Rapid Tests.
The GVH has recommended in the Report:
(i) to temporarily (e.g., for three months) allow the sale of Rapid Tests at retail chains, drugstores and petrol stations to boost the level of competition;
(ii) for market players to develop shorter value chains, such as supplying directly from domestic importers;
(iii) if recommendation (i) is not implemented, the GVH proposes the Hungarian Government to consider intervening to determine the maximum price level for the Rapid Tests (similarly to the PCR tests);
(iv) OGYÉI to publish the product summaries of the Rapid Tests (such as information about the manufacturer and distributor, user manual, efficiency data) for consumers and allow the market players to use these summaries to ensure that consumers receive all the relevant information.
One key takeaway from the Report is that the GVH has informed the operators of the websites and the co-authorities about the specifically identified objectionable practices. The GVH noted that it will perform its next sweep starting on the week of 14 February 2022. If such problems persist, the GVH will initiate coordinated administrative action with the involvement of OGYÉI and the Ministry for Innovation and Technology.
The final Report is available here in Hungarian. Please also see our articles on the previous accelerated sector inquiries of the GVH that were carried out in the market of ceramic bricks and in the construction wood market.