The Hungarian Competition Authority (hereinafter: the GVH) shall order an ex officio investigation in the case of market conduct falling within its competence, which is prohibited by the Competition Act and the EU competition rules, such as unfair manipulation of business decisions, abuse of dominant position, anti-competitive agreements and other infringements falling under its competence by other laws (e.g. abuse of significant market power, unfair commercial practices)
The GVH may itself observe the conduct giving rise to the ex officio initiation of an investigation; however, anyone may draw it to the Authority’s attention by submitting a formal or informal complaint. The submission of a formal or informal complaint does not automatically result in the initiation of a competition supervision proceeding. The GVH shall issue an injunction initiating an investigation upon the observation of a conduct falling within the competence of the Hungarian Competition Authority that is likely to constitute an infringement, if the protection of the public interest necessitates the initiation of a competition supervision proceeding. In cartel cases, the initiation of an ex officio proceeding may be preceded by the submission of a leniency application.
The GVH takes a decision within three months in cases initiated due to unfair market practices and unfair manipulation of consumer decisions. This period may be extended, on two occasions, by up to two months each time where justified. Proceedings initiated to examine anti-competitive agreements and abuses of a dominant position must be concluded within six months, and this period may be extended on two occasions, by up to six months each time where justified.
In its decision, the competition council proceeding in the case:
- shall establish the fact of infringement;
- shall order the termination of the infringing state;
- shall prohibit the continuation of the infringing conduct;
- shall, where the existence of an infringement is established, impose obligations on the undertaking concerned;
- shall order the publication of a corrective statement in cases of unfair commercial practices or unfair manipulation of business decisions concerning deceptive information;
- shall impose a fine;
- shall, under certain conditions, issue a warning to small and medium-sized enterprises instead of imposing a fine,
- shall establish that a conduct does not constitute an infringement.
Through the institution of commitment decisions, the desired effect can be achieved even without major intervention: if, in the course of the proceedings, the undertaking subject to the proceedings offers commitments to bring its conduct in a specified way in line with the applicable legal provisions and if the efficient protection of the public interest can be ensured in this manner, the competition council proceeding in the case may, in its decision, oblige the party to abide by such commitments without establishing the existence or the absence of an infringement in such decision; this solution is also beneficial to the undertaking.
Instead of imposing a fine, the GVH considers the development of undertakings’ compliance with the law to be much more effective and important. In order to promote this, the GVH may only issue a warning instead of imposing a fine in the case of a small or medium-sized enterprise if it is their first infringement. It is important to note, however, that if the infringement takes the form of an agreement aimed at price fixing or market sharing in the course of a public procurement procedure or the infringement has been committed against a vulnerable group of consumers, it is not possible to apply the warning.
Competition supervision proceeding for the examination of concentrations
Pursuant to the provisions of the Competition Act in force from 15 January 2017, the application for the approval of a concentration has been replaced by the notification of a concentration and, where appropriate, the initiation of ex officio competition proceedings. The GVH will initiate a competition supervision proceeding to investigate a notified concentration if:
- it is not obvious that the concentration would not result in a significant reduction of competition in the relevant market or
- the notification of the concentration fails to satisfy the conditions set out in the Competition Act, or the position statements of the Media Council of the National Media and Infocommunications Authority (hereinafter: Media Council) must be obtained and the preliminary consent of the Media Council as a special authority permitting the concentration without the imposition of any conditions or obligations is not available
During a competition supervision procedure initiated in one of the above-mentioned ways, the GVH assesses the concentration in a simplified or full procedure, depending on the complexity of the case. The deadline for the closure of the simplified procedure is 30 days from the receipt of the notification of the concentration. If it is not obvious that the concentration would not result in a significant reduction of competition in the relevant market, the GVH shall issue an injunction ordering the full investigation of the concentration. In that case, the final resolution concluding the proceeding must be taken within four months of receipt of the notification of the concentration.
In addition to the above, the GVH shall initiate a competition supervision proceeding if:
- on the basis of the notification of the concentration, the concentration is likely to have been implemented in contravention of the prohibition on implementation, or
- the unnotified concentration was implemented in contravention of the prohibition on implementation, or
- in the notification of a concentration the notifying party concealed or misrepresented a relevant fact, and therefore the concentration was not examined under the competition procedure, or
- if a concentration is likely to meet the threshold of the investigation of concentrations but it has not been notified and it is not obvious that that concentration would not result in a significant reduction of competition in the relevant market
In its decision, the competition council proceeding in the case, shall establish that the concentration would not significantly reduce competition on the relevant market under the condition or obligation laid down in the decision, thus, it acknowledges the concentration or prohibits the implementation of the transaction. In its decision acknowledging the concentration, the GVH may also require the notifying parties to fulfil a prior or ex post condition or obligation in order to mitigate the potential harmful effects of the concentration on competition (for example, one of the activities of the enterprise can be separated or a specific conduct can be imposed on the notifying party). In the case of concentrations implemented in contravention of the prohibition on implementation, and subsequently prohibited, the Competition Council may, in its decision, order to restore the competitive conditions that existed before the concentration or impose other obligations in order to restore effective competition.
More detailed information on merger control can be found here.
Following the conclusion of the competition supervision proceeding, the GVH monitors compliance with the obligations included in the decision of the competition council proceeding in the case (e.g. the fulfilment of the obligations) within the framework of a follow-up investigation.