Hungarian Competition Authority

Overview of competition supervision proceedings

Competition supervision proceedings are ex officio proceedings which are initiated on the basis of (i) consumer signals (formal or informal complaints from competitors, NGOs, etc.), (ii) concentration notifications, or (iii) the GVH’s own observations of concerning conducts. In order for competition supervision proceedings to be initiated, two conditions must be satisfied: (i) with the exception of merger proceedings, the conduct in question must be likely to constitute an infringement falling within the competence of the GVH, and (ii) the additional condition specified in Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices (hereinafter: Competition Act) must be fulfilled; namely, the initiation of competition supervision proceedings, including the ordering of an investigation, must also be justified by the efficient protection of the public interest.

The fact that an investigation has been initiated may be published. If the fact that an investigation has been initiated is published, the public must also be informed about the outcome of the investigation.

The competition supervision proceeding begins with the procedure of case handlers, which belong to specialised professional sections. The case handler shall terminate the ex officio competition supervision proceeding – excluding the investigation of concentrations – if the evidence obtained in the course of the proceeding does not enable it to be determined whether or not the conduct concerned constitutes an infringement, and the continuation of the proceeding is not expected to yield further results or if the proceeding has become devoid of subject-matter.

If the case handler does not terminate the competition supervision proceeding by issuing an injunction, the case files and the case handler’s report completing the investigation are submitted to the decision-making body of the GVH, namely the Competition Council,

Upon receipt of the case handler’s report completing the investigation, the competition council proceeding in the case

• shall terminate the competition supervision proceeding,
• shall return the documents to the case handler for further investigation, or for the calling of a new undertaking into the proceedings or for the extension of the proceedings,
• shall order an interim measure.

If the above measures are not taken, the competition council proceeding in the case shall send to the party its preliminary position about the case to which the party may make statements or comments in response. Concurrently with sending its preliminary position, the competition council proceeding in the case shall invite the party to make a statement as to whether it requests a hearing to be held.

The competition council shall hold a hearing if this is requested by the party or if it considers it necessary in order to clarify the facts of the case. Hearings shall be open to the public; however, the case handler or the competition council proceeding in the case shall, acting upon request, exclude the public from the hearing or a part thereof or the public may be excluded ex officio.

In its decision, the competition council proceeding in the case

• with regard to a proceeding for the investigation of a concentration (i) may establish that the concentration would not significantly reduce competition on the relevant market, in which case the concentration can be implemented; (ii) may impose a pre- or post-condition or obligation regarding the implementation of the concentration; (iii) may prohibit the concentration,
• shall establish, in a competition supervision proceeding initiated on the basis of a notified concentration, that a material fact was misrepresented during the notification of the concentration in a way that had an effect on the initiation of the investigation of the concentration, and it shall withdraw the official certificate issued by the case handler,
• shall withdraw a decision adopted pursuant to Article 30 if it was based on a misleading representation concerning a fact that was material to the adoption of the decision,
• shall establish that the benefit of the application of the group exemption does not apply to the agreement,
• shall establish the fact of infringement,
• shall order the termination of the infringing state,
• shall prohibit the continuation of the infringing conduct,
• shall impose an obligation,
• shall, under certain conditions, issue a warning to small and medium-sized enterprises instead of imposing a fine,
• shall order the publication of a corrective statement in respect of any infringing communication of information,
• shall establish that a conduct does not constitute an infringement,
• shall withdraw or amend its previous decision.

The competition council proceeding in the case may impose a fine. The amount of the fine shall not exceed 10% of the net turnover in the preceding business year of the undertaking concerned or of the group of undertakings to which the fined undertaking belongs. The amount of the fines imposed on social associations of undertakings, public bodies, associations and other similar organisations shall not exceed 10% of the net turnover in the preceding business year of the undertakings which are members of such associations. As regards to associations of undertakings, the financial liability of each member undertaking may not exceed 10% of its net turnover in the business year preceding the decision.

Administrative time limits vary according to the case type and may be extended where justified as follows:

It may also be an important circumstance that the administrative deadlines are resumed at the invitation of the new undertaking subject to the procedure, and also that the calculation of the administrative time limit does not include the duration of other procedural acts, nor the period during which the Authority awaits the decision of another administrative body.

During the competition supervision proceeding, the case handler or the competition council proceeding in the case may perform several procedural measures: it may request information, documents and statements from the parties to the proceedings and from other persons request the provision of legal assistance, interview witnesses, appoint experts, conduct unannounced inspections and, if necessary, with a previously obtained judicial warrant, it may conduct unannounced inspection.

For the clarification of the facts of the case, any requested person or organisation must provide the necessary information also in writing and submit the documents related to the subject matter of the investigation to the Hungarian Competition Authority.

When clarifying the facts, the case handler or the competition council proceeding in the case shall apply the rules of the Competition Act and of Act CL of 2016 on General Public Administration Procedures on the clarification of facts, interviewing of witnesses, appointment of experts and holding of inspections. In the case of unfair commercial practices, deception of trading parties, and comparative or misleading advertising, no investigation shall be initiated if three years have elapsed from the date of the infringement. In the case of anti-competitive agreements, abuse of dominant position or proceedings for the investigation of concentrations, the limitation period is five years, beginning on the date on which the conduct ceased or the concentration was implemented. Where the infringing conduct is continuous in nature, the time limit shall begin at the time when the conduct is terminated.