CLIENT ALERT – HUNGARY: Amendment to the Competition Act

Legislation amending the Hungarian Competition Act was published on 1 December 2022. The amendments include – among others – an increase in certain fees and fines, and the introduction of a new legal instrument, the letter of formal notice of the President of the Hungarian Competition Authority (“GVH”). The amendments entered into force on 1 January 2023 and on 1 February 2023.

Merger control

The GVH MUST be notified of a transaction under certain conditions:

  • First, if the combined net turnover in the previous business year of the concerned business groups or jointly controlled undertakings exceeded a certain amount: previously the threshold was 15 billion HUF (approx. 38.5 million EUR), now it is increased to 20 billion HUF (approx. 51.3 million EUR), and
  • Secondly, if there are at least two undertakings in the business groups who’s turnover in the previous business year exceeded a certain amount: previously 1 billion HUF (approx. 2.5 million EUR), now increased to 1.5 billion HUF (approx. 3.9 million EUR).

The changes entered into force on 1 January 2023 and aim to increase the efficiency of procedures and reduce the administrative burden. Under the revised thresholds, 10-15% fewer transactions are expected to be notified to the GVH in the future, which will greatly contribute to reducing the administrative burden for domestic businesses. Under the law, net sales are calculated on the basis of turnover in Hungary, i.e. the net sales of domestic sales.

The GVH no longer needs to, but CAN be notified of the merger transaction if the business groups aggregate turnover exceeded 5 billion HUF (approx. 12.8 million EUR) in the previous business year.

The administrative service fees for the competition supervision procedure also increased from 1 February 2023: from 3 million HUF (approx. 7,700 EUR) to 4 million HUF (approx. 10,200 EUR) for the “Phase I” procedure and from 15 million HUF (approx. 38,500 EUR) to 19 million HUF (approx. 48,700 EUR) for the full “Phase II” procedure.

As of 1 February 2023, the modification increases the amount of the maximum daily fine from 200.000 HUF (approx. 500 EUR) to 300.000 HUF (approx. 770 EUR) that can be imposed on the undertaking which fails to fulfil its obligations under the law.

Formal notice of the President of GVH

As of 1 January 2023, the president of GVH, in relation to the allegedly infringing market conduct, may send a letter of formal notice to the undertaking which has engaged in the unlawful conduct, in order to inform it about GVH’s concerns and to encourage compliance with the law.

As a “soft law” instrument, the letter of formal notice can help companies to review and modify objectionable market conduct based on the principle of gradualism.

The undertaking which has been served with the notice may indicate to the authority its views on the notice, in particular its efforts to restore compliance.

Each year, GVH publishes on its website the suspected infringement, the market concerned and the number of letters of formal notice sent.

Transposition of new EU legislation on digital markets, new powers to the GVH

EU’s Digital Markets Act (“DMA”) will enter into force in May 2023. In accordance with the new regulation, GVH will cooperate with the European Commission as designated authority.

DMA aims to ensure that large online content platforms (“gatekeepers”) operate fairly (whether they comply with their EU obligations). In that framework, GVH helps the Commission to enforce the DMA, can carry out procedural acts, may initiate competition proceedings against “gatekeeper” companies, etc.

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