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Hungary

Competing fairly

Updated 10/2012

Legal requirements

Regulation of the Hungarian market includes competition law in harmony with Community Regulations, joint statements issued by the presidents of the Hungarian Competition Authority and the Competition Council, and principled opinions drawn up by the Competition Council of the Hungarian Competition Authority.

Anti-trust rules

The Competition Act has defined the following prohibitions under competition law in the interests of defining the requirements for fair trade and creating respect for and freedom of economic competition: (1) a prohibition of unfair market practices; (2) a prohibition of unfairly influencing business decisions; (3) a prohibition of cartels; (4) a prohibition of abuse of a dominant economic position; (5) monitoring of concentrations (merger control).

Unfair market practices

Under the Competition Act, it is forbidden to pursue an economic activity unfairly - especially in a manner that harms or threatens competitors or the legal interests of consumers, or conflicts with the fair trade requirements. The Act also contains specific prohibitions, for example on damaging reputation or slander, or unfairly obtaining, using, publishing or reproducing trade secrets.

Unfairly influencing business decisions

The prohibition on unfairly influencing business decisions signifies a prohibition on the deception of trading partners. Deception of trading partners includes stating false facts regarding the price of goods or their actual ownership; ignoring the fact that goods do not fulfil the legal provisions; or providing misleading information, especially giving a false appearance of a favourable deal.

Agreements

Under the Competition Act, it is prohibited to conclude agreements between companies and to engage in concerted practices. This does not include agreements concluded between companies that are not at arm's length, are of very small size or where the agreement has been exempted from the prohibition by Government Decree.

Abuse of dominant position

  • Exploitative abuse: This affects buyers directly, for instance as a result of using unjustifiably high prices.
  • Restrictive abuse: This only affects buyers indirectly. Specifically, it means a restriction of competition, for instance in the form of unjustified preclusion from concluding a contract.

The Competition Act provides a list of certain examples of abuse of dominant economic position.

Concentration of companies

The essence of monitoring concentrations of companies is that mergers may only take place after preliminary permission has been granted by the Hungarian Competition Authority, and under defined conditions. Merger control is used to ensure that key company mergers, acquisitions or takeovers that restrict competition cannot avoid mandatory monitoring by the competition supervisory authorities.

Prohibition of abuse of significant customer power

Abuse of dominant power (unilaterally beneficial negotiating power) against the supplier is forbidden for the seller. It is a significant market power, in particular, if the consolidated net income of a seller or his group of companies from sales activities exceeds 100 billion forints (ca. 360 million EUR) in the previous year. In this case, the Commerce Act obliges the seller to create a self-controlling ethical codex on fair market behaviour.

Due to the specific disadvantages inherent in their activities, the producer or processor of agricultural and food products is protected by a separate regulation against unfair behaviour of organisations engaged in the marketing of such products.

State subsidy

The main rules relating to access to support provided from the Budget are contained in the Government Decree on Procedures Relating to the State Budget Act and State Subsidies.

In the interests of transparency of subsidies paid from public funds, the method by which subsidy is made public is regulated by separate legislation.

Consumer protection

The Consumer Protection Act defines the basic rights that consumers have, including the protection of consumers' health, safety and financial interests, the provision of information and training to consumers, endorsing consumers' compensation claims, and representation of consumers.

Consumers' compensation claims are endorsed by means of the consumer protection institution and through the serving of justice. The National Consumer Protection Authority, which operates under the leadership of the Ministry of Social Affairs and Labour, is responsible for implementing consumer protection legislation.

National Competition Authority

The Hungarian Competition Authority aims to support and promote market competition and protect the freedom and integrity of competition by ensuring compliance with competition law and anti-competition measures.

The Hungarian Investment and Trade Agency acts against unfair behaviour of distributors to protect the interests of the producers of agrarian products.

Strict provisions govern company mergers

Administrative procedures

Reporting a concentration of companies

Concentrations of companies require a licence from the Hungarian Competition Authority. Depending on the complexity of the case, the Authority may investigate whether the concentration may be permitted using the simplified or full procedure. The application forms to submit for a merger authorisation can be downloaded from the website of the Hungarian Competition Authority, in Hungarian and English.

The cut-off date for the simplified procedure is 45 days from receipt of the application or rectification of any deficiencies, which may be extended by 20 days on one occasion. If the case requires further investigation, the concentration must be evaluated using the full procedure; in such cases the final decision must be made within 120 days, which may be extended by 60 working days on one occasion. Should the Authority find that the merger does not significantly reduce competition in the relevant market, especially as a consequence of the creation or reinforcement of market dominance, it may not refuse to issue a licence.

Companies are obliged to have a statement published in the Companies' Gazette regarding the transformation within 8 days of the final decision, and the statement must be published in two consecutive issues.

The application for the registration of the company (of the change) must be electronically submitted by the legal representative (signing the articles of association) authorised by the company's legal representative.

Reports relating to aid transparency

The aim of the website on aid paid from public funds is to make information available free of charge to interested parties concerning European Union resources, and information on aid provided for programmes financed under international agreements. Once they submit their bids, bidders must submit a declaration to the receiver of the bid if they come to be affected during the tender process, in a manner defined by law. If the bidder does not initiate publication before the deadline (within 8 working days), it may not receive subsidy. It must also make a declaration to the effect that it has no conflicts of interest, or that any conflicts of interest have been eliminated by the bidder.

Competition supervisory procedures

The Hungarian Competition Authority may initiate proceedings ex-officio or upon request, if it receives a complaint or report of behaviour that contravenes the law. Complaints and reports can be lodged by anyone, at no cost. Reporting forms can be downloaded from the Hungarian Competition Authority website:

In cases instigated due to commercial practices that are unfair on consumers, the Hungarian Competition Authority will make a decision within 90 days of the investigation having been ordered. This period may be extended once, by no more than 60 days. Procedures to investigate agreements that restrict competition or abuse of a dominant economic position must be completed within 180 days; this deadline may be extended twice, by no more than 180 days each time.

Resources

Contact details for the Hungarian Competition Authority are available on its website.

The Combined Blacklist was created at the instigation of civil society and is an online database of Hungarian companies that uses tax numbers to link up and pin down to companies any of the various official procedures and offences that have come to light since 1 January 1998.

The results of procedures initiated in the recent years on the basis of prohibition of unfair behaviour by the distributor against the suppliers in relation to agricultural and food products are available.

Information on aid provided from programmes financed from the State Budget, European Union sources or under international agreements can be accessed by anyone on the website about aid paid from the public purse. The body accepting the bid publishes the subject matter of the tender, the tenderer, the bidder, and the amount demanded (within 5 working days of acceptance of the bid), and the extent to which the bidders are affected by the tender procedure, as defined by law.

Programmes

As part of improving the Hungarian competition culture, the Hungarian Competition Authority is striving to promote regulation that ensures social acceptance of competition, law-abiding behavior, and conscious decision-making by consumers.

Help & advice

Help & advice

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