Hungarian Competition Law & Policy: The Watermelon Omen

Posted by D. Daniel Sokol

Pal Szilagyi (Peter Pazmany Catholic University) explores Hungarian Competition Law & Policy: The Watermelon Omen

ABSTRACT: Looking at recent developments in Hungarian competition law and policy first gives us the impression that nothing exciting is happening. Most developments are business as usual at the national competition authority. (In Hungarian the proper name of the authority is the Gazdasagi Versenyhivatal, but for English speakers we refer to it by its initials, “GVH.”) The GVH has amended some notices (e.g. on simplified procedures in merger control or on fines) and brought them into line with recent developments on the European level. There have been few antitrust decisions by the authority, but several are in the pipeline. A few of them are related to the abuse of a dominant position (e.g. a case initiated against MasterCard Europe Sprl) and some more investigations focus on suspected cartels (e.g. one on a suspected cartel in the residential mortgage sector). There was even a case where the courts annulled the decision of the GVH in a merger case because of insufficient reasoning and evidence.

One interesting event, however, could have a general impact on the application of national competition law provisions on all the Member States of the European Union. In 2006 the GVH imposed one of the largest fines in Hungarian competition law (about 7 billion HUF); the case was appealed and finally, just recently, the highest court in Hungary has made a preliminary rulings request. The value of the request to existing European case law is that the Hungarian court had asked for a preliminary ruling in a case where Article 101 TFEU was not applicable. However, the national court was of the opinion that, since the national equivalent of the article was based on Article 101 TFEU, the notions originating in EU laws must have a direct influence on the interpretation of the relevant provisions. The European Commission supported this argument and was also of the opinion that the special relationship of national and EU law makes the question posed by the national court eligible. As of October 25, 2012, Advocate General Cruz Villalón was of a different opinion, so it will be interesting to see the judgment of the ECJ.

The other very interesting issue, in the opinion of the AG, is the interpretation of the notion of object or effect types of anticompetitive agreements in cases of vertical agreements that resemble hub-and-spoke cartels.

But, more ominously, if we look at recent developments from a wider perspective, we can see some radical changes in the attitudes of the Hungarian legislature and the society.