Main developments in Competition Law and Policy for 2024 – Hungary
Abstract
This report outlines key developments in Hungarian competition law and policy in 2024, including legislative changes, enforcement actions, and market inquiries. Highlights include joint venture agreements being exempted, stricter de minimalis regulations, increased fines and clarified statutes.
Major cases of enforcement targeted unfair commercial practices andd acquisition cartels. Significant fines were imposed on companies such as Wizz Air, Booking.com. Hungarian Competition Authority launched inquiries into AI markets and single-bid contracts, focusing on SME support, consumer safety, and Hungarian language AI development. Legislative changes–
New exemption from the prohibition of anticompetitive agreements
As of 10 May 2024, Hungarian competition laws will exempt agreements between parent companies and their joint ventures (JVs) if they relate to the behavior of the Joint Venture in the markets where it operates. Previously, agreements that were necessary to operate the joint venture, such as non-compete agreements, exclusive purchasing arrangements, or information sharing agreements, were exempt from the prohibition of anticompetitive agreements.–
Previously, these agreements were only excluded if they were a part of a merger approval process. This legislative change is based upon the European Commission Horizontal Guidelines (2023/C 259), specifically paragraph 12. It states that the Commission does not “generally” apply Article 101 of TFEU to agreements made between parent companies and joint ventures if the agreements are limited to markets where the JV operates. The Hungarian legislator removed the word “generally” to ensure legal clarity and extended the exemption for all agreements that affect the affected markets of the JV.
–It’s important to note, however, that jointly controlled enterprises remain distinct from their parent companies. The Hungarian Supreme Court had previously ruled that such anti-competitive decisions could be exempted from the
de minimalis rule. This change is a result of this ruling. This interpretation contradicted the European Commission’s
de minimis notice, which states that association decisions should be treated the same as other anti-competitive agreements.
Clarification of Statute of Limitations for Damages Claims
The statute of limitations for initiating claims for damages now begins on the date when the full, non-confidential text of the competition authority’s infringement decision is published. This amendment is in line with the CJEU ruling in the Volvo and DAF Case (C-267/20), where it was stated that limitation rules must reflect the specificities and asymmetry of information between injured parties and offenders. The HCA has increased the maximum fines it can impose, reflecting its tougher stance against competition law violations. An amendment effective from September 1, 2023, raised this ceiling to 13%, with the legislator citing the need to enhance the deterrent effect of penalties.
Subsequently, Government Decree No. 184/2024 (VII. 8.) The maximum fine for violations committed after August 1, 2020 has been increased to 15% of the group’s net turnover. This regulation is in effect during the state-of-emergency declared by the Ukrainian war, which is currently scheduled to last until May 18, but will likely remain in place until the conflict’s end. And then Withdrawn?
–In April of 2024, the Hungarian parliament was presented with a bill that proposed the expansion of HCA’s power and a comprehensive modification of the Competition Act. The proposal included the introduction of a new category of “enterprises of paramount importance” based on Section 19a (GWB) of the German Competition Act. This designation would allow the HCA identify enterprises that have significant cross-market influences and could negatively impact market competition.–The proposed frame work aimed to enable the HCA impose preventative duties on such undertakings in order to preemptively reduce risks of competition distortions. The HCA’s primary goal was to empower it to act proactively when an enterprise’s dominance could potentially harm the market. This could be particularly relevant in situations where the enterprise’s operations are jeopardized by external factors, such as geopolitical challenges or internal financial difficulties. Under the proposal, designated enterprises would be subject to oversight of their business decisions by the HCA to ensure they do not harm competition. The HCA’s designation and decisions would be subject to administrative litigation, which would provide an additional layer of legal protection. Affected enterprises would have the right to challenge the HCA’s designation and decisions through administrative litigation, providing an additional layer of legal protection.
A number of stakeholders raised concerns with the proposal and pointed out issues such as:
Lack of Clear Criteria: The absence of precise criteria for designation could lead to subjective interpretations.
Potential for Overreach:
The regulation might allow the HCA to excessively interfere in market autonomy if its powers are broadly interpreted.
Administrative Burdens: The designation and related obligations could impose disproportionate administrative and operational burdens on the affected enterprises.
In light of these concerns, the government and the HCA decided to postpone the adoption of the amendments and initiate broader professional consultations. This delay is a reflection of the government’s commitment to address stakeholder concerns, and ensure that the regulatory framework is aligned both with market needs and legal protections. The HCA is now focusing a significant portion of its decisions on fighting unfair commercial practices. Although cases involving bid-rigging or cartel practices are common, they only make up a small part of the total caseload.
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Antitrust cases
–Road Salter Cartel
–In the early part of 2024, HCA closed one of its largest cases against cartels in public procurement, imposing fines totaling nearly HUF 400,000,000 (approximately EUR 970.000) on six companies. These firms colluded between 2011 and 2014 on pricing, divided bids, and manipulated selection of winners in the public procurements for salt. The violations involved public money, and several senior executives were actively involved. The investigation was complicated due to concurrent criminal proceedings that confirmed the infringements. The fines ranged between HUF 8,000,000 (approximately EUR 19,000.) and HUF 139,000,000 (approximately EUR 335,000. The HCA conducted a competition oversight procedure in relation to public procurements of Iveco vehicles. It investigated anticompetitive behavior by multiple companies. The firms engaged illegal bid coordination, pricing, and customer allocation arrangements, distorting the fair competition in procurement and undermining efficient use of public money. The HCA was able to resolve the case faster because of this cooperation. Nonetheless, the HCA imposed significant fines to reflect the seriousness of the violations and the importance of fair competition in public procurement.
The basic amount of the fine was 11.5% of the relevant turnover for the primary participants, 11% for certain others, and 10% for the remaining undertakings .
Railway Procurement Cartel
The HCA concluded an investigation into a major procurement cartel related to a multi-billion-forint railway infrastructure project. The investigation revealed that several companies engaged collusive practices including price coordination and bid manipulating to influence the outcome a public tender. The cartel members had agreed to coordinate their bids so that one of them would win the contract. The bids of both companies were prepared by a procurement consultancy that was under the direct control and management of a single group. The same employee also prepared the budget calculations for both companies, ensuring that they were aligned with the agreed outcome. The close cooperation continued even after bid submission, with the companies coordinating their procedural steps and supporting each other’s bids throughout the process.
- The HCA’s Competition Council imposed total fines of HUF 1.2 billion
- (approximately EUR 2,880,000) due to the large value of the public contract and the substantial turnover of the companies involved. The companies also tried to obstruct HCA’s investigation, requesting multiple delays and failing to submit observations by the agreed deadlines. The companies also requested a delay of the hearing which was initially granted. However, they then submitted a last-minute request for the hearing to be delayed the day before the scheduled date. The HCA found that these tactics were deliberate attempts to delay the investigation. They imposed a procedural fine of HUF 25,000,000 (approximately EUR 600.000) on one of the implicated firms. This cooperation resulted to a significant reduction in the fine, to HUF 30,000,000 (approximately EUR 700.000).–The case highlights serious consequences of procurement cartels. These are some of the most severe antitrust offenses due to the impact they have on public funds. The HCA is committed to eliminating these practices as they undermine fairness in competition and increase public spending through illegal agreements among bidders. The merger could have allowed GLS Hungary, a leading courier company, to gain access to iLogistic’s customer database and sensitive information. This access could have given GLS Hungary an important competitive advantage, while also disadvantaged other competitors. In order to address this issue, the HCA accepted GLS’s binding commitments that GLS Hungary would be restricted from accessing iLogistic’s parcel delivery data for three years. They also required internal procedures in order to prevent information flowing. The HCA also highlighted the rapid growth in the fulfillment sector where iLogistic was a dominant player. The HCA focused its efforts on ensuring iLogistic’s autonomy, especially in terms of data management, as well as preventing structural changes which could close the market. The Competition Council found the airline to have engaged in unfair business practices by failing adequately to inform consumers of the option of purchasing certain “additional” services individually. This led them towards more expensive packages. Wizz Air also failed to communicate the key features of its automatic checking-in service in a way that was consistent with professional diligence. The HCA is currently investigating Wizz Air. The HCA is currently conducting investigations into Wizz Air. One investigation, launched on 6 August 2024, will examine the airline’s reservations system, which violates professional diligence standards. According to reports, the system displays inconsistent prices across devices such as mobile phones or desktop computers, creating an unpredictability among consumers. A second investigation, launched on January 31, 2024 examines whether Wizz Air hid information about the free online check-in. It is alleged passengers with return tickets were not able to complete free check-in on certain mobile platforms and had to pay EUR40 for airport check-in. Both investigations aim to clarify the suspected violations and were launched with an initial three-month deadline, extendable twice by two months each.
- Booking.com
The HCA launched a competition supervision procedure against Booking.com B.V. in 2018 for suspected unfair commercial practices. The investigation revealed that Booking.com advertised “free cancellation”, even though it was often limited in time and charged higher prices. Booking.com used urgency tactics such as “Similar room not available” and “Few Rooms Left”, creating psychological pressure on the consumer. The company also failed to adequately present SZEP Card Payment
(most popular fringe benefit of Hungary)
options. In April 2020, the HCA imposed the largest fine in its history, a HUF 2,5 billion (approximately EUR 6,0 million). Booking.com was required to stop the infringing practice and provide evidence of compliance. This decision was later upheld by courts.
–On the 15th July 2024, HCA announced that it had concluded a follow-up inquiry, concluding that Booking.com did not fully comply with the 2020 decision. The company reduced the use of urgent messages but continued to use some pressure-inducing techniques until February 26, 2024. It also maintained the “free cancelation” slogan, while removing cheaper, non-refundable options until April 26, 2024. Following these findings, the HCA imposed a record HUF 382.5 million (approximately EUR 925,000) fine during the follow-up procedure, considering Booking.com’s waiver of its right to appeal, despite its denial of wrongdoing.
Eventim
In May 2023, the HCA initiated an investigation into the Eventim ticketing platform for allegedly influencing consumers through hidden costs. The HCA determined that Eventim used “drip pricing” by revealing fees like handling, delivery and collection charges at later stages of the purchase process. This practice, which is classified as a “dark pattern,” psychologically pushed consumers to accept a higher final price after investing time into the process. Eventim acknowledged the violation, waived the right to appeal and fully cooperated with the HCA. It committed to compensate affected consumers by reimbursing HUF 700 for each purchase of tickets purchased between January 1, 2020 and February 2, 2023. This amounts to more than HUF 70,000,000 (approximately EUR 175 000) for over 80,000 consumers. Eventim also pledged to restructure their pricing system in order to eliminate hidden fees, and to provide transparent pricing throughout the purchasing process. HCA did not impose a fine on Eventim because of its compensation and cooperation measures. Should Eventim fail to fulfill these obligations, the HCA will impose the remaining amount as a fine.
Viber
On May 17, 2024, the HCA announced a comprehensive package of measures for Viber Media to improve consumer awareness and decision-making in line with the latest data protection standards. Viber, an important messaging service in Hungary, was the target of the investigation for failing to provide Hungarian language information about its service’s safety and data handling practices. The HCA concluded this case without finding any violations, as the company had voluntarily agreed to make improvements. The HCA concluded the case without finding a violation, as the company voluntarily committed to improvements. Viber also introduced the “Viber Plus”, a subscription that offers an ad free experience and ensures that subscribers’ data will not be used for advertising. Viber has also committed to creating a Hungarian language “Privacy bot” to educate users on online privacy and safety through concise, visual messages, and relevant links. The bot will be operational for at least two years, helping users make informed decisions about their data.
Lottoland
On March 20, 2024, the HCA fined Deutsche Lotto- und Sportwetten Limited, the operator of the “Lottoland” platform, HUF 345 million (approximately EUR 835,000) for intentionally misleading Hungarian consumers. The company copied games or slightly modified those offered by Hungary’s National Lottery Operator, Szerencsejatek Zrt. It even used identical names, such as EUROJACKPOT, for some games. Lottoland’s advertisements gave the impression that Szerencsejatek Zrt. The company did not disclose its identity or contact information, or presented it in a way that was ambiguous. The HCA took into account several aggravating factors when determining the fine. These included the long duration and intensity, the impact on vulnerable groups like gambling addicts, as well as the simultaneous use multiple deceptive tactics. The fine reflects the company’s decision to waive its right to appeal. The HCA places a special emphasis on competition law violations associated with public procurement procedures, given that both antitrust decisions for 2024 were related cases. In Hungary, criminal liability is only possible if an agreement to restrain competition occurs in the context of public procurement or concession procedures. In line with this legal framework, HCA initially focused on certain segments of single bid public procurements and brought them under closer scrutiny. Single-Bid Public Procurements–
– In September of 2024, the HCA launched a sectoral inquiry to investigate the causes of single bid public procurements. The initial focus was on the market for medical diagnostic equipment. The investigation aims to identify the factors that limit competition and uncover why single-bid procedures in this sector are so high. The HCA believes that the lack of competition is detrimental to the public interest and undermines the efficient use public funds. They conducted on-site inspections with judicial authorization and collected substantial data, especially regarding procurements of MRI, CT and ultrasound equipment. In its market analysis of artificial intelligence (AI), HCA identified four key findings and recommended actions to promote the development and maximize the socio-economic impact. Support for Small and Medium-Sized Enterprises: HCA highlighted the importance of SMEs accessing AI technologies. The HCA recommends that businesses who use AI provide consumers with clear and comprehensible details about the technology. The HCA stressed the importance of improving research coordination and developing a national AI policy. The HCA emphasized the need to support Hungarian-language AI models due to the unique features of the Hungarian Language and limitations of international AI technologies. The HCA’s comprehensive analysis of the domestic and international AI markets addressed challenges, opportunities, as well as competitive dynamics. The study aims to support regulatory development and help market participants adopt AI technologies more effectively.
Legislative Changes in Early 2025
The HCA is set to increase its merger notification fees with effect from
20 January2025
. The notification fee will rise to HUF 1.3 million, compared to the previous HUF 1 million
, while the first-phase investigation
fee will increase to HUF 5 million
, compared to the previous
HUF 4 million. For a
full investigation, the fee will be
HUF 21 million, compared to the previous
HUF 19 million.
