The latest amendment of the Hungarian Competition Act introduces a new settlement procedure in cartel investigations which will take effect from 1 July 2014. The procedure offers significant time and cost savings to those potentially facing fines for cartel activities.
With this new legislation, the Hungarian Competition Authority’s settlement procedure will mirror that of the European Commission, and the policy objectives will also be the same.
From 1 July 2014, following issuance of the Statement of Objections, the Hungarian Competition Authority may, at its discretion, offer the possibility of settlement negotiations to parties under investigation. Although no notice is available for the time being regarding the practical aspects of the new tool, these settlement negotiations will take verbal form and will require intensive cooperation and short response times from the parties involved.
Successful settlements would potentially be a win-win for all sides: while the authority would save time and resources and could keep the costs of the procedure low, and the parties under investigation would benefit from a 10 percent reduction of any fine that could otherwise be imposed on them should the investigation not end in their favor. This 10 percent reduction would be in addition to any other reduction already available in the procedure – effectively meaning that successful leniency applicants (who are not entitled to full exemption from penalties) may further push down their financial penalty exposure by using the new tool.
The Hungarian Competition Authority expects to arrive at the first settlement decisions by 2016 and will most likely issue a notice on the practical aspects of the implementation of the new procedure by that time.