The Economic Competition Authority created a special investigation group to explore the reasons for the drastic rise in the price of raw materials for the construction industry. This primarily analyzes complaints and market signals related to suspected cartel activities, says the GVH announcement.
The price increase in the construction sector can be traced back to a number of possible reasons. Among other things, stuttering international supply chains, trade policy measures, customs duties, foreign exposure, capacity shortages and transport disruptions caused by the pandemic have an increasing effect on construction raw material prices. In market economy conditions, the price is shaped, in addition to all these factors, by the interaction of supply and demand.
On the basis of preliminary investigations carried out over the past year, the Hungarian competition authority revealed that in the case of some construction raw materials and products, oligopoly markets have also developed where producers (sellers) are present in small numbers, have great market power and can easily set their prices to those of competitors. is set higher than the price level typical for the market. Already in October 2020, the Economic Competition Authority initiated proceedings against the three most important actors of the domestic cement market for alleged violations of the prohibition of abuse of economic dominance, which proceedings are currently ongoing.
According to the investigation group's analysis, the time has come to create a national strategy for the extraction and utilization of important mining raw materials. It falls within the jurisdiction of the competition authority if independent market participants in a given sector coordinate their market behavior and, forming a cartel, raise prices above the price level that would arise in a normal competitive situation, harming consumers. Anti-competitive behaviors usually take place in secret, so the competition authority learns about them primarily from market signals (informant, cartel chat, complaint, report) or from companies choosing forms of cooperation (permissiveness).
Nobody should be surprised if, if necessary, new competition supervision procedures are initiated! The anonymity of complainants and whistleblowers is guaranteed by law, and various forms of cooperation can significantly reduce the weight of possible sanctions." - pointed out Balázs Csaba Rigó, president of the Economic Competition Authority.
