Blog » LUXEMBOURG RULED – THE HUNGARIAN STATE MOBILE PAYMENT SYSTEM BREACHES EU LAW
LUXEMBOURG RULED – THE HUNGARIAN STATE MOBILE PAYMENT SYSTEM BREACHES EU LAW
03 December 2018
Whether a mobile payment system can be nationalized in an EU member state relying on the doctrine of services of general economic interest? The Luxembourg court this time examined the Hungarian national mobile payment system. We analyze the reasons of the decision in our article.
From 2014, Hungary set up a state monopoly on the market of mobile payment services, in the framework of which the Nemzeti Mobilfizetési Zrt. a 100% state owned entity was created. From this time, public parking charges, tolls for use of the road network, and fees connected with all the other services offered by a State body can be paid by mobile device only through the national mobile payment system, operated by the Nemzeti Mobilfizetési Zrt.
The European Commission was of the view that the Hungarian mobile payment system, as nationalization of the market of mobile payments breached EU law, since the Nemzeti Mobilfizetési Zrt., endowed with an exclusive right, created an obstacle for wholesalers to enter the mobile payment market, and therefore the provisions of the service directive, and the freedom of establishment and provision of service within the EU were not respected.
Since the Hungarian government disputed the infringement and failed to comply with the notification of the European Commission, the case continued in Luxembourg, in front of the Court of the European Union.
The case in Luxembourg
The Hungarian court firstly invoked the doctrine of services of general economic interest (SGEI), alleging that the national mobile pay system is a SGEI, in respect of which the service directive is not applicable at all, or may be applicable with restrictions, so Hungary is not obliged to liberalize an existing SGEI.
The EU court highlighted in this respect, that even if the mobile pay system is considered as a SGEI, the EU law allows exceptions only for SGEI and state monopolies which were already in existence when accessing to the EU. However, the Hungarian national mobile payment system was created with effect from 2014, as a new system, therefore, in addition to being non-discriminatory, it shall comply with the requirements of necessity and proportionality.
In the above context, the Hungarian government argued that the former mobile payment services, operated by private undertakings, have not provided whole country-coverage and equal access, while the state monopoly ensures the protection of consumers, the fairness of commercial transactions and the fight against crime.
Despite of the above, the EU Court stressed that the interference into the free market was unnecessary and disproportionate, since the above objectives could have been achieved by less restrictive measures, for example, instead endowing a state monopoly to the Nemzeti Mobilfizetési Zrt., the government could have introduced a system of concessions based on a competitive process.
Based on the above the EU court established that the Hungarian national mobile payment system breached the provisions of the service directive and the freedom to provide cross-border services within the EU.
LUXEMBOURG RULED: MESSI DRIBBLED PAST EVEN THE EUROPEAN TRADEMARK OFFICE
Messi hit the legal news again, this time not because of his tax issues. In September, the match between the EUIPO and the world-famous football player, which was ongoing since 2011, finally ended. Messi won the match, as the European Court of Justice ruled that because of his significant reputation, his name can be registered as a trademark despite the fact that it is similar to several earlier trademarks, which is otherwise a ground for exclusion. In our short article, we summarise the details of the case and the legal significance of the decision.Read more »
7 MUST-KNOWS ABOUT FIXED-TERM EMPLOYMENT IN HUNGARY
The parties usually establish the employment relationship for an unlimited period. However, in certain cases, for various reasons, like business or organisational considerations, it seems to be better to conclude a fixed-term labour contract. In this article we summarize what you as an employer shall consider in Hungary in case you would hire someone for a fixed period.Read more »
CAN THE CHOICE OF COURT AMOUNT TO THE CHOICE OF LAW? – THE SUPREME COURT DECIDED
Shall it be considered as the choice of the English law if the party first starts a litigation in England regarding to a Hungarian project? How much of a role do the procedural acts of the parties play in relation to the choice of law applicable to a contract? In this article we analyse the fresh judgement of the Supreme Court, in which, among others, the highest court addressed the issue of the tacit choice of law.Read more »