Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

The HCA is empowered to order that an undertaking refrain from conduct violating the Act, and impose conditions or obligations aimed at restoring competition. Under Act XIX of 2020, designed to implement the ECN+Directive, the HCA may impose behavioral or structural remedies, such as ordering the parties to conclude contracts in cases of unreasonable refusal to enter into a business relationship o …

Cease or desist orders

The HCA is empowered to order that an undertaking refrain from conduct violating the Act, and impose conditions or obligations aimed at restoring competition. Under Act XIX of 2020, designed to implement the ECN+Directive, the HCA may impose behavioral or structural remedies, such as ordering the parties to conclude contracts in cases of unreasonable refusal to enter into a business relationship or to continue an existing one as appropriate for the nature of the transaction (Section 76(1)(i). However, when choosing between two equally effective remedies, the HCA must opt for the least burdensome for the undertaking, in line with the principle of proportionality. 

Since March 2024, the HCA has new powers to combat unfair commercial practices against consumers. In particular, it can order the deletion of any electronic data, especially by making certain offending websites unavailable, if such measure results in preventing a risk of serious harm to consumers.

Since 1 September 2023, a maximum fine of up to 13% of the entire group's global turnover over the last financial year can be imposed for a breach of the Competition Act (Article 78). 

If the association of undertakings refuses to pay the fine voluntarily within the prescribed time-limit, the HCA adopts a ruling ordering the association to pay the fine from the contributions collected from its members. Where that contribution does not cover the amount of the fine, the HCA may order the association members named in the decision to pay the remaining amount of the fine subject to joint and several liability, where a person acting on behalf of such undertakings was a member of the decision-making body that took part in implementing the infringing decision of the association during the period affected by the infringement. Finally, if those measures still prove to be insufficient, the HCA may order the association members named in the decision to pay the remaining amount of the fine subject to joint and several liability where they were active on the market affected by the infringement in the relevant period.

Factors relevant to setting the fine include the gravity of the violation, the duration of the unlawful situation, the benefit gained by the infringement, whether it is a repeated violation and the level of cooperation of the undertaking during the proceedings. In the revised Notice on Fines of December 2017 the Competition Council extended the scope of the circumstances that may result in a significant reduction of the amount of the fine or even in full immunity. Under the notice, undertakings which take steps to compensate - either partially or entirely - the harm done to consumers, may be granted a reduction of the fine amounting to the sums paid to the latter. An incentive is also given to undertakings setting up a compliance program in the form of a 7-10% fine reduction where the program has led the undertaking to terminate its participation in the infringement or where it has agreed to provide evidence to the Competition Council in any subsequent proceeding. The commitment to set up a compliance program within the course of proceedings may also result in a 5-20% fine reduction.

Penalties may also be imposed in the case of obstruction of proceedings. Section 61, as lastly amended in 2020, indicates what behavior constitutes obstruction, and provides for a fine of at least 200,000 forints (EUR 486) for undertakings and 50,000 forints (EUR 121) for natural persons. The maximum amount shall be, in respect of undertakings or associations of undertakings, of 1% of the net turnover of the preceding fiscal year or 500 000 forints for natural persons. 

Enforcement fines of up to a maximum of 50,000 forints (EUR 121) per day may also be ordered for failure to comply in a timely manner with a final decision. That fine can be increased up to 100,000 forints (EUR 243) one on one occasion (Section 90). Such fines may be imposed on both the undertaking and the individual charged with managing the undertaking.

Under amendments to the Competition Act adopted on 9 June 2015, the Competition Council may substitute a mere warning for the imposition of a fine in respect of SMEs where they are first-time offenders. Such exemption however does not apply where the infringement at issue is against the EU competition rules or concerns public procurement procedures.

In addition, since 2023 the HCA has been able to issue a formal notice to an undertaking by contacting it to inform it of concerns about potential illegal practices, without or before initiating formal proceedings.

As of 1 August 2024, the maximum fine has been raised from 10% to 15% of a company’s annual net sales. This increase is intended to enhance the deterrent effect of penalties and align Hungarian competition policy with European standards. In 2023, the total amount of fines imposed by the Hungarian competition authority reached HUF 2.2 billion, while by August 2024 this figure had already exceeded HUF 2 billion—indicating an upward trend in the severity of sanctions.

Fines

The Competition Act provides for a leniency program, at Section 78/A. The Competition Council handling the case grants immunity from, or reduces, the fine imposed on those undertakings disclosing to the HCA a cartel, including in the case of hardcore restrictions.

The first person to apply can seek immunity if the evidence produced allows the HCA to obtain a judicial authorization to carry out investigative measures, to prove the infringement, when the HCA could not obtain these elements without the evidence submitted.

Undertakings that provide evidence of the infringement that constitutes significant added value to the HCA (but not such as to obtain immunity) can expect a reduction of 30-50% for the first applicant, 20-30% for the second, and up to 20% for the subsequent.

In any case, an applicant for leniency must end its involvement in the cartel immediately, cooperate genuinely, fully and on a continuous basis with the HCA, but will not be eligible if it took steps to coerce other undertakings to participate in the infringement.

The 2013 amendments to the Competition Act significantly improved the incentives to make use of the leniency program. Under the new rules, full immunity may be granted to the first undertaking who comes forward to the HCA with decisive evidence even where the HCA has already launched investigations. In the same way, an application for a fine reduction may be successful even if it is made after the HCA has issued the Statement of Objections or granted access to the case file. 

In June 2016, the HCA published its latest Leniency Notice (No 2/2016), taking account of the revised Model Leniency Programme of the European Competition Network which provides detailed explanations on the principles followed by the HCA when assessing leniency applications.

The 9 December 2016 amendments now clarify that leniency is also available for vertical infringements such as resale price maintenance.

Finally, Act XIX of 2020 implementing the ECN+ introduced stricter rules for leniency applicants. Section 78/A now expressly specifies that the undertaking's cooperation includes, in particular, remaining at the authority’s disposal to answer any request that may contribute to the establishment of the facts; making executive officers, employees, delegates and other persons who effectively exercise control over the company available for interviews with the HCA and making reasonable efforts to make former executive officers, employees, delegates and other persons who effectively exercise control over the company available for interviews with the HCA; not destroying, falsifying or concealing relevant information or evidence. Before the application is made, the undertaking must also not have destroyed, falsified or concealed the relevant evidence, and disclosed the fact of, or any of the content of, its contemplated application, other than to any other competition authorities of other Member States or competition authorities of third countries.The 2020 amendment also introduced a marker system whereby an undertaking is entitled to make a summary application without immediately submitting all the necessary evidence (Section 78/B(3)). The marker system applies both to applications for immunity or reduction of the fine. A summary application may also be presented in parallel with an application made before the European Commission, where an infringement of the TFEU provisions is at stake. If the applicant supplements the summary application within the prescribed time-limit, and presents the evidence necessary, the date of receipt of the summary application will be considered as the date of submission of the application and the date of submission of the related evidence.

Leniency

The Act does not provide for criminal sanctions, but any penalties imposed under the Act are without prejudice to criminal sanctions that may be available under other legislation (Section 93).

Global Competition Law

375. Cease or desist orders

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Les notions juridiques connexes

375. Cease or desist orders

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise