Accelerated sector inquiries were introduced aiming to authorize the Hungarian Competition Authority (“GVH”) to quickly identify and address market problems during the COVID-19 emergency situation, if (i) there were reasonable grounds to suspect that competition within a sector is distorted or restricted; and (ii) urgent intervention was needed. This transitional procedure type, however, has now become a permanent competition law instrument in Hungary.
Accelerated sector inquiries during the COVID-19 emergency situation
The accelerated sector inquiry was introduced during the COVID-19 emergency situation in Hungary and was also the legal basis for three procedures during this time. We reported in our previous newsletters that the GVH concluded accelerated sector inquiries into (i) the ceramic bricks market, (ii) the coronavirus rapid tests market, and (iii) the covid antigen tests market.
Accelerated sector inquiries from 1 June 2022
Although the COVID-19 emergency situation ended on 1 June 2022 in Hungary, the Hungarian legislator decided to further apply this new type of procedure which was originally designed as a transitional intervention instrument. Therefore, the Act LVII of 1996 on the Prohibition of Unfair Market Practices and Restriction of Competition (“Competition Act”) has been modified by implementing the provisions related to this procedure. The new provisions of the Competition Act do not substantially change the legal framework of the accelerated sector inquiry laid down in the subsequent Government Decree, but rather clarify the rules in a few areas and render the application of certain provisions of the accelerated sector inquiry on the “general” sector inquiry and vice versa. According to the amended Competition Act, the court may authorize the GVH to conduct on-site investigation (dawn raid) together with the initiation of the accelerated sector inquiry, if it is likely that the evidence relating to the purpose and subject of the accelerated sector inquiry can reasonably be found at the premises specified by the GVH.
From the amended provisions of the Competition Act, it seems that the legislators intended to make the accelerated sector inquiry a permanent legal tool available for the GVH as well as to clarify and bring closer the relevant rules applicable to the “general” sector inquiry to the legal framework of the accelerated sector inquiry. The GVH may now even conduct a dawn raid in the frame of an accelerated sector inquiry, a tool which the GVH does not have during a “general” sector inquiry procedure.
It may be expected that initiating accelerated sector inquiries will continue as a trend allowing the GVH to quickly review or intervene on a particular market if needed, for instance, on markets, where the new regulation on price reduction announcement – detailed in our latest newsletter – apply.