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The Hungarian Competition Authority has imposed a maximum fine of almost 40 million forints (EUR 103,500) to a Slovak online shop for misleadingly suggesting that e-cigarettes and Elf Bar products could be legally ordered from it in Hungary.
Last summer, the authority launched an investigation into two Slovak online shops selling e-cigarettes and Elf Bar products on their Hungarian-language websites. They used the interim measure to immediately order the closure of the online shops until the cases were closed. The first of these proceedings ended with the highest possible fine at the end of last year, while the other case has just been decided.
The investigation revealed that the company also misled Hungarian consumers into believing that its products could be legally marketed.
Csaba Balázs Rigó, president of the Hungarian Competition Authority, said that the company violated clear sectoral rules and marketing prohibitions. Moreover, its behavior was partly aimed at children and minors, a more vulnerable group of consumers, not to mention the fact that the National Center for Public Health has stated that the products in question may have harmful effects on health.
The story of Elf Bar began with an American product called JUUL, copied in China after its success, and that is how the current product was born. The company, Elf Bar vapes, is based in California, US and their products are manufactured in China. The Elf craze hit Europe after the Australian market closed and Chinese products started to arrive uncontrolled by sea.
Since Elf Bar is a banned product in Hungary, it was distributed through an increasing number of black market dealer networks and got into the hands of minors. It is particularly dangerous because of its unknown, untested, and unreliable composition and its very high nicotine content. The government had taken action to protect the health of young people as soon as the illegal product appeared.
The authority’s Competition Council imposed the maximum possible fine of HUF 38.7 million (EUR 100,177) on Bensons Europe s.r.o., a company registered in Párkány, Slovakia. The company had already “collected” a fine of HUF 3 million (EUR 7,765) during the procedure because it failed to comply with its obligation to provide information in response to repeated requests, thereby obstructing the work of the authorities.
During the investigation, the Competition Authority also sanctioned the company for circumventing the interim measure by redirecting the operation of its webshop from the hosting site in Hungary that had been shut down, to another service provider.
As a result, the authority imposed daily increasing enforcement fines on both the company and its managing director, eventually leading the company to shut down the website.
The National Tax and Customs Administration is also strictly monitoring the illegal trade of Elf Bar products and has organized hundreds of operations to remove the speciality tobacco product from the market. The results so far are more than 160 million forints (EUR 414,100) in seized goods and 20 million forints (EUR 51,700) in fines.
Marcell Bíró, President of the Authority for the Supervision of Regulated Activities, stated that
to protect the health of minors, the coalition against Elf Bar was established for the start of school last year
at the initiative of their organization, the Hungarian Competition Authority, the Ministry of the Interior, the National Tax and Customs Administration, the National Police Headquarters, and the Kopp Mária Institute. Thanks to this rigorous and coordinated action, this illegal activity has been eliminated from the vicinity of schools and public institutions, but they are interested in even more effective and successful actions in the online space, he emphasized.
Via MTI, Featured photo via Facebook/Gazdasági Versenyhivatal
