Abstract
The Competition Act serves as a general code for the regulation of Hungarian competition law. The Competition Act regulates the entire scope of competition matters, such as unfair competition, unfair manipulation of business decisions, agreements on the restriction of competition (horizontal and vertical), abuse of dominant position, merger control proceedings, and private enforcement of claims. The Competition Act also sets forth basic organizational rules of the Hungarian Competition Authority (HCA) enforcing competition law in Hungary.
The members of the working group preparing the chapter were Gusztáv Bacher, Virág Balogh, Adrienn Dömők, Márton Horányi, Anikó Keller, Márton Kocsis, Ádám Liber, Márk Pánczél, Ákos Réger, István Szatmáry, Pál Szilágyi, Péter Virág and Péter Vörös.
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Notes
- 1.
Act LVII of 1996 on the Prohibition of Unfair Trading Practices and Unfair Competition.
- 2.
Section 11 of the Competition Act reads as follows:
-
(1)
Agreements and concerted practices between companies, as well as the decisions of the organizations of companies established based on the right of association, their public bodies, associations and other similar (hereinafter referred to collectively as “association of companies”) (hereinafter referred to collectively as “agreements”), which are aimed at the prevention, restriction or distortion of economic competition, or which may display or in fact displays such an effect, are prohibited. An agreement concluded between companies that are not unrelated shall not be construed as such.
-
(2)
This prohibition shall, in particular, apply to the following:
-
a)
fixing the purchase or sales prices, and defining other business conditions directly or indirectly;
-
b)
restricting manufacture, distribution, technical development or investment or keeping them under control;
-
c)
dividing the sources of supply and restricting the freedom of choosing from among them, as well as excluding specific trading parties from the purchase of certain goods;
-
d)
dividing the market, excluding any party from selling, and restricting the choice of means of sales;
-
e)
preventing any party from entering the market;
-
f)
where, in respect of transactions of an identical value or of the same nature, certain partners are discriminated against, including the setting of prices, payment deadlines, discriminatory sales or purchase conditions or the employment of methods which cause disadvantage to certain business partners in the competition;
-
g)
rendering the conclusion of a contract conditional upon undertaking any commitment which, due to its nature or with regard to the usual contractual practice, do not form part of the subject of the contract.
-
a)
Section 21 of the Competition Acts reads as follows:
It is prohibited to abuse a dominant position, in particular:
-
a)
to fix purchase or sales prices unfairly in business relations, including where general contract terms and conditions are applied, or to stipulate unjustified advantages by any other means, or to force the acceptance of detrimental terms and conditions on the other party;
-
b)
b to restrict production, distribution or technical development to the detriment of final trading parties;
-
c)
to refuse to establish or maintain business relations adequate for the nature of the transaction without any justification;
-
d)
to influence the other party’s business decisions for the purpose of gaining unjustified advantages;
-
e)
to withdraw goods from general circulation or to withhold goods without justification prior to price increases or for the purpose of causing prices to rise, or by means otherwise capable of securing unjustified advantages or causing a disadvantage in competition;
-
f)
to render the supply and acceptance of goods contingent upon the supply or acceptance of other goods, or to render the conclusion of a contract conditional upon undertaking any commitment which, due to its nature or with regard to the usual contractual practice, does not form part of the subject of the contract;
-
g)
in connection with transactions of an identical value or of the same nature, to discriminate against certain business partners without due cause, including the setting of prices, payment deadlines, discriminatory sales or purchase conditions or the employment of methods which cause disadvantage to certain business partners in the competition;
-
h)
to force competitors off the relevant market, or to use excessively low prices which are based not upon better efficiency in comparison to that of the competitors, so as to prevent competitors from entering the market;
-
i)
to hinder competitors from entering the market in any other unjust manner; or
-
j)
to create a market environment that is unreasonably disadvantageous for the competitors or to influence their business decisions for the purpose of gaining unjustified benefits.
-
(1)
- 3.
Act CXL of 2004 on the General Rules of Administrative Procedures and Services.
- 4.
Act XLVII of 2008 on the Prohibition of Unfair Business-to-Consumer Commercial Practices.
- 5.
Directive 2005/29 of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-consumer commercial practices in the internal market and amending Council Directive 84/450, Directives 97/7, 98/27 and 2002/65 of the European Parliament and of the Council and Regulation 2006/2004 of the European Parliament and of the Council (‘Unfair Commercial Practices Directive’), OJ 2005 L 149, p. 22.
- 6.
Act V of 2013 on the Civil Code.
- 7.
Act CVIII of 2001 on Electronic Commerce and on Information Society Services.
- 8.
Directive 2000/31 of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on Electronic Commerce’), OJ 2000 L 178, p. 1.
- 9.
Act XXV of 2005 on the financial service contracts concluded as distance contracts.
- 10.
Directive 2002/65 of the European Parliament and of the Council of 23 September 2002 concerning the distance marketing of consumer financial services and amending Council Directive 90/619 and Directives 97/7 and 98/27, OJ 2002 L 271, p. 16.
- 11.
Government Regulation No 45/2014 (II. 26.) on the detailed rules of contracts between businesses and consumers.
- 12.
Commission Notice Guidelines on the effect on trade concept contained in Articles 81 and 82 of the Treaty, OJ 2004 C 101, p. 81.
- 13.
Council Regulation 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ 2003 L 1, p. 1.
- 14.
This interpretation is based on Recital 8 and 9, as well as Article 3(3) of Regulation 1/2003.
- 15.
The relationship of EU and national merger control is separately regulated by way of the EU Merger Regulation (Regulation 139/2004), while national laws on B2C unfair commercial practices were fully harmonized by way of the Unfair Commercial Practices Directive.
- 16.
Government Regulation No 205/2011 (X. 7.) on the exemption of certain categories of vertical agreements from the prohibition of restriction of competition.
- 17.
Commission Regulation 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practices, OJ 2010 L 102, p. 1.
- 18.
The full version of the Hungarian language Sector Inquiry Report is available at: http://gvh.hu//data/cms1034253/Agazati_vizsgalat_online_szallashelyfoglalas_piacan_vegleges_jelentes_2016_06_08.pdf. The English language executive summary of the Sector Inquiry Report is available at: http://www.gvh.hu/data/cms1034473/Agazati_vizsgalat_online_szallashelyfoglalas_piacan_vegleges_jelentes_2016_06_08_a.pdf.
- 19.
See Sector Inquiry Report, p. 65.
- 20.
Guidelines on Vertical Restraints, OJ 2010 C 130, p. 1.
- 21.
Kommentár a tisztességtelen piaci magatartás és a versenykorlátozás tilalmáról szóló 1996. évi LVII. törvényhez, Budapest, 2014, HVG-ORAC, p. 218.
- 22.
The full version of the Hungarian language summary of comments is available at: http://www.gvh.hu//data/cms1034254/Agazati_vizsgalat_online_szallashelyfoglalas_piacan_eszrevetelek_2016_06_08.pdf.
- 23.
Section 14 of the Competition Act reads as follows:
-
(1)
The relevant market shall be defined with regard to the goods subject to the agreement and to the geographical territory.
-
(2)
In addition to the goods for which the agreement is concluded, the goods considered as reasonable substitutes in terms of use, price, quality and the conditions of performance (substitution in demand) shall also be taken into account, as well as the factors involved in substitution in supply.
-
(3)
A geographical territory is an area, outside of which:
-
a)
a business partner is unable to purchase the goods, or is only able to purchase the goods under substantially less favorable conditions; or
-
b)
the seller of the goods is unable to sell the goods, or is only able to sell the goods under substantially less favorable conditions.
-
a)
-
(1)
- 24.
Commission Notice on the definition of relevant market for the purposes of Community competition law, OJ 1997 C 372, p. 5.
- 25.
The full version of the Hungarian language contribution is available at: http://www.gvh.hu/data/cms1022123/hu_atev_oecdh_elker00_m.pdf. The full version of the English language contribution is available at: http://www.gvh.hu/data/cms1022135/us_atev_oecdh_elker00_a.pdf.
- 26.
VJ/113/2013.
- 27.
VJ/55/2013.
- 28.
Section 22 of the Competition Act reads as follows:
-
(1)
A dominant position shall be deemed to be held on the relevant market (Section 14) by persons who are able to pursue their economic activities to a large extent independently of other market participants without the need to substantively take into account the market reactions of their suppliers, competitors, customers and other trading parties when deciding their market conduct.
-
(2)
In assessing whether a dominant position exists, the following factors shall be considered in particular:
-
(a)
the costs and risks of entry to and exit from the relevant market, and the technical, economic and legal conditions that have to be met;
-
(b)
the assets, financial strength and profitability of the undertaking or the group of undertakings [Section 15(2)], and the trends in their development;
-
(c)
the structure of the relevant market, the comparative market shares, the conduct of market participants and the economic influence of the undertaking or the group of undertakings on the development of the market.
-
(a)
-
(3)
A dominant position may be held by a single undertaking, a group of undertakings, jointly by more than one undertaking, or jointly by more than one group of undertakings.
-
(1)
- 29.
Communication from the Commission – Guidance on the Commission’s enforcement priorities in applying Article 82 of the EC Treaty to abusive exclusionary conduct by dominant undertakings, OJ 2009 C 45, p. 7.
- 30.
Section 13 of the Competition Act reads as follows:
-
(1)
Agreements of minor importance shall not be subject to prohibition.
-
(2)
An agreement shall be construed of minor importance if the combined share of the parties to the agreement and of the companies that are not independent from such parties does not exceed ten per cent in the market in question. The requirement of a market share of ten per cent or less shall be satisfied during the term of the agreement or in each calendar year if the said term covers more than one year.
-
(3)
Subsection (1) shall not apply to agreements between competitors or concerted practices which have as their object the restriction, prevention or distortion of competition, such as the fixing or coordination of purchase or selling prices or other trading conditions, the allocation of production or sales quotas, the sharing of markets, including bid-rigging, restrictions of imports or exports (hereinafter referred to as “cartel”), including any agreement aiming, directly or indirectly, for fixing purchase or sale prices, or concerted practices.
-
(4)
The provisions of Subsections (1)-(3) notwithstanding, any agreement that is able to create an environment, in conjunction with other agreements of the like, whereby competition in the relevant market is substantially obstructed, restricted or distorted, shall be subject to prohibition. The Hungarian Competition Authority shall have powers to declare an agreement illegal, in which case no penalty shall be imposed.
-
(1)
- 31.
VJ/10/2002, para 44.
- 32.
VJ/78/2003, para 43.
- 33.
In case of predatory pricing: VJ/10/1997, VJ/76/1999, VJ/39/2009 and VJ/32/2012.
- 34.
Abuse of Dominant Position Notice, para 14.
- 35.
Act XI of 1997 on the Protection of Trademarks and Geographical Indications.
- 36.
Directive 2008/95 of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks, OJ 2008 L 299, p. 25.
- 37.
ECJ, case C-337/95, Christian Dior SA v. Evora BV, ECR 1997 I 1603.
- 38.
ECJ, case C-63/97, Bayerische Motorenwerke AG (BMW) and BMW Nederland BV and Ronald Karel Deenik, EU:C:1999:82.
- 39.
See Sector Inquiry Sector, p. 93.
- 40.
See Sector Inquiry Sector, p. 95.
- 41.
See Sector Inquiry Sector, p. 81 and p. 94.
- 42.
‘Selective distribution system’ means a distribution system where the supplier undertakes to sell the contract goods or services, either directly or indirectly, only to distributors selected on the basis of specified criteria and where these distributors undertake not to sell such goods or services to unauthorized distributors within the territory reserved by the supplier to operate that system.
- 43.
Section 17 of the Competition Act reads as follows:
The prohibition defined in Section 11 shall not apply to an agreement if:
-
a)
it contains facilities to improve the efficiency of production or distribution, or to promote technical or economic development, or the improvement of means of environmental protection or competitiveness;
-
b)
a fair part of the benefits arising from the agreement is conveyed to final trading parties;
-
c)
the concomitant restriction or exclusion of economic competition does not exceed the extent required for attaining the economically justified common goals;
-
d)
it does not contain facilities for the exclusion of competition in connection with a considerable part of the goods concerned.
-
a)
- 44.
CJEU, case C-230/16, Coty Germany vs. Parfümerie Akzente GmbH.
- 45.
Opinion of Advocate General Wahl delivered on 26 July 2017 in Case C-230/16 Coty Germany GmbH v Parfümerie Akzente GmbH, EU:C:2017:603.
- 46.
See Report from the Commission to the Council and the European Parliament, Final report on the E-commerce Sector Inquiry, 10.5.2017 COM(2017) 229 final, para 42.
- 47.
ECJ, case C-439/09, Pierre Fabre Dermo-Cosmétique SAS, EU:C:2011:649.
- 48.
See Commission Staff Working Document – Accompanying the document Report from the Commission to the Council and the European Parliament, Final report on the E-commerce Sector Inquiry, 10.5.2017, SWD(2017) 154 final, para (503).
- 49.
VJ/55/2013.
- 50.
Section 73/A of the Competition Act.
- 51.
Section 75 of the Competition Act.
- 52.
Notice No. 3/2015 of the President and Vice-President of the HCA on settlement procedures, the Hungarian language Notice is available at http://www.gvh.hu//data/cms1035560/2015_3_egyezsegi_kiserlet_kozlemeny_egyseges_szerkezetben_20170115.pdf.
- 53.
Directive 2014/104 of the European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union, OJ 2014 L 349, p. 1.
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Papp, Á., Horváth, A. (2018). Hungary. In: Kilpatrick, B., Kobel, P., Këllezi, P. (eds) Antitrust Analysis of Online Sales Platforms & Copyright Limitations and Exceptions. LIDC Contributions on Antitrust Law, Intellectual Property and Unfair Competition. Springer, Cham. https://doi.org/10.1007/978-3-319-71419-6_8
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