On 9 June 2015 the Hungarian Parliament adopted Act 78 of 2015 amending the Hungarian Competition Act (Act 57 of 1996), which was the subject of a significant review last year. The majority of the amendments entered into force on 20 June 2015 and concern the following areas.
Merger control. The amendments introduce procedural rules governing the submission of preliminary implementation requests, make it clear that merger notifications can be filed only after signing transactional documentation, and contain some clarification on turnover calculation.
Access to file and confidential information. The Competition Act enables investigated undertakings to access confidential information of other investigated parties to the extent that this is necessary to exercise their right of defence. The amendments will make this even easier by (i) making such access to confidential information conditional upon a declaration that the accessing investigated party will keep the information confidential, (ii) by eliminating the possibility of appeal against the competition authority’s decision allowing access to such information, and (iii) by eliminating the authority’s obligation to seek the affected investigated party’s opinion before it grants access to confidential information by another investigated party’s lawyers (without the right to take copies).
Limited access to leniency applications and settlement declarations. The amendments will limit the scope of persons that can access settlement declarations, leniency applications and leniency declarations and related evidence. In order to limit exposure to private enforcement actions, third parties will not be entitled to access these documents in the future at all. Investigated parties will be able to access these documents, but will not be entitled to make copies.
Milder sanctions for SMEs. Based on existing Hungarian legislation, SMEs are subject to milder sanctions in the case of a first offense for certain types of administrative law infringements. This general rule will also be extended to competition law. Instead of imposing a fine, the competition authority may simply issue a warning and oblige the SME to introduce a competition compliance procedure preventing competition law infringements in the future. A warning cannot be applied for infringements violating EU law, bid rigging in public procurement proceedings, or if unfair commercial practices were committed against a particularly vulnerable consumer group.
Preferential treatment for cartels relating to agricultural products. The amendments will be incorporated into the competition rules already existing in sectoral legislation. Cartels that relate to agricultural products will be exempted from the cartel prohibition under the Competition Act if certain conditions are met (i.e. the distortion did not go beyond what was necessary to achieve a fair and equitable income, and did not foreclose other players from the market). The competition authority must seek the opinion of the Minister responsible for agriculture as to whether those conditions are met, and is bound by such opinion. In addition, the competition authority must suspend the imposition of a fine in a (non-exempted) cartel relating to agricultural products and must offer the cartelists the opportunity to comply with the Competition Act within a set deadline. Fines may be imposed only after such deadline has expired. These preferential rules must not be applied if the investigated conduct may fall under Article 101 TFEU – the decision as to whether this is the case lies within the competence of the competition authority.
Public procurement and use of EU funds. The amendments introduce a new provision to the Public Procurement Act (Act 108 of 2011), according to which the minister responsible for public procurement or the distribution of EU funds must notify the competition authority in the case of a suspected or obvious infringement of cartel rules, and may provide related evidence.
It appears that the purpose of the amendments is twofold: to fine-tune existing competition related legislation, including the last major review of the Competition Act in June 2014, and to give a legislative response to certain concerns raised by the European Commission recently with respect to legislation relating to the agricultural sector, and with respect to the use of EU funds in Hungary.