A antitrust proceeding It is based on Act LVII of 1996 on the Prohibition of Unfair Market Practices and Restrictions on Competition, commonly known as the Competition Act. In its proceedings, the GVH may apply not only domestic rules but also the prohibitions under European Union competition law. At the conclusion of the proceedings, the GVH issues a decision or order and may also determine that the conduct under investigation does not violate the law.
One competitor or business partner complaint in and of itself still no means antitrust procedure launch. A situation then is changing and, when a GVH investigation order and, even complaint or notification based on, even own detection as a result. Because of this starting with a business data reporting may be required to, a GVH examiner but a statutory conditions existence in the event that on-site research too can be performed. The procedure at the end a GVH violation of the law may determine and, fine may who and may prohibit a unlawful behavior its continuation, but violation of the law absence of too may determine. The below the procedure its course, deadline, possible consequences and a business defense possibilities we'll show you in.
Table of Contents
- What is a GVH proceeding, and who does it apply to?
- How does a GVH proceeding begin, and what is the process?
- How long does a competition authority proceeding take?
- How large a fine can the GVH impose?
- How can one challenge a decision by the GVH?
- How Does Competition Law Relate to Consumer Protection and Public Procurement?
- Misplaced Expectations: From Complaints to Fines
- When the defense Depends on the Company's Own Documents
- Frequently Asked Questions About GVH Proceedings
What is a GVH proceeding, and who does it apply to?
A antitrust law scope covers a natural and legal persons, and a foreign headquartered in businesses in Hungary branches a by law specified market his behavior. A law application from the perspective of no exclusively a legal entity legal form, but the by him/her certified behavior and that market nature too is decisive. From the perspective of the territorial scope of competition law, both the location of the market conduct and its impact in Hungary are significant. As a general rule, the Act applies to market conduct occurring within the territory of Hungary. Its scope may also extend to market conduct occurring abroad if such conduct has an effect within the territory of Hungary, subject to the exceptions specified in the Act.
A GVH among others between the following antitrust on the subject of in such matters may from:
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Anti-competitive agreements and coordinated behaviors examination.
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Economic with a decisive advantage actual abuse examination.
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The business decisions unfair influence on examination.
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Some unfair market behaviors examination.
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A businesses interconnection of verification.
A GVH consumer protection within its jurisdiction with consumers opposite unfair commercial exercise too can examine.
How does a GVH proceeding begin, and what is the process?
The stages of the process build on one another.
- Initiation. The GVH may initiate proceedings on its own initiative or based on a complaint or report. Filing a report is free of charge, but neither a complaint nor a report automatically triggers proceedings.
- Ordering an Investigation. An investigator at the GVH—that is, the case officer responsible for investigating the matter—orders an investigation if the conduct may violate the competition law, the GVH has jurisdiction to act, and the protection of the public interest necessitates such action.
- Data Collection. The investigator may send a request for information to the business and may also conduct an on-site investigation.
- Investigation Report. The investigator submits the findings of the investigation to the Competition Council, which is the decision-making body within the GVH.
- Decision. The Competition Council hearing the case issues a decision or an order. It may find that an infringement has occurred, impose a fine, order the cessation of the infringing conduct, or rule that no infringement has occurred.
- Appeals. An administrative lawsuit may be filed against the decision within 30 days of receipt, and against the order within 8 days of notification.
When the company takes action at each stage, what documents it submits, and what arguments it presents depend on the facts of the specific case.
How long does a competition authority proceeding take?
The processing time depends on the type of case. According to information from the GVH, the following deadlines apply:
| Case Type | Processing Time | Extension |
|---|---|---|
| Misleading business partners, unfair trade practices | 3 months | In justified cases, twice, for up to 2 months each time |
| Agreements Restricting Competition, Abuse of Dominant Position | 6 months | Twice, if warranted, with a 6-month interval between instances |
| Merger, simplified procedure | 30 days | Cannot be extended |
| Merger, full-scope proceeding | 4 months | 20 days or 2 months |
A case involving an anti-competitive agreement or abuse of dominance could thus take up to 18 months, including the two extensions. The company must factor this length of time into its planning, transaction scheduling, and negotiations with investors while the proceedings are ongoing.
How large a fine can the GVH impose?
The fine may not exceed 13 percent of the net sales revenue of the enterprise or group of enterprises subject to the fine in the fiscal year preceding the issuance of the decision (Section 78 of Act LVII of 1996 on the Prohibition of Unfair Market Practices and Restrictions on Competition). The upper limit is therefore based on revenue. For a company belonging to a corporate group, it is therefore advisable to assess the risk based on the group’s revenue.
In addition to imposing a fine, the decision may prohibit the continuation of the infringing conduct and may also impose obligations. The GVH may monitor compliance with the decision through enforcement proceedings.
In the case of small and medium-sized enterprises, the GVH may issue a warning instead of a fine for a first-time violation of competition law. This option does not apply to price-fixing in public procurement procedures, market-sharing, or violations committed against vulnerable consumers. Whether a company meets these conditions depends on its prior history of violations and the nature of the case; therefore, it is advisable to clarify this first when planning a defense.
How can one challenge a decision by the GVH?
The GVH’s decision may be challenged in court. An appeal may be filed against the decision within 30 days of receipt and against the order within 8 days of notification. The two deadlines start at different times and have different durations. Therefore, upon receipt of the decision, the first step is to determine what type of decision it is.
The court phase is already a litigation process, and the general issues regarding it are addressed in the a subpage dedicated to litigation and debt collection provides an overview.
How Does Competition Law Relate to Consumer Protection and Public Procurement?
The GVH takes action in cases involving unfair commercial practices against consumers if the conduct is capable of substantially affecting economic competition. Thus, whether an advertisement or sales practice is brought before the GVH depends on the extent of its market impact.
In the area of public procurement, the connection is direct. In cases of price-fixing committed during a public procurement procedure, a warning is out of the question; in such cases, the GVH cannot waive the fine. Accounting data also matters, because the upper limit of the fine is determined by net sales revenue. Regarding the scope of competition law services, the Competition Law Advisory Services Subpage provides an overview.
Misplaced Expectations: From Complaints to Fines
The first misunderstanding concerns the effect of a complaint. Filing a complaint does not initiate proceedings. A complaint does not oblige the GVH to initiate proceedings, and there is no statutory deadline for its resolution. The complainant therefore cannot expect the GVH to take action within a specific timeframe.
The second misconception is that the GVH always imposes fines. At the conclusion of the proceedings, the Competition Council may also find that no violation has occurred. In the case of small and medium-sized enterprises, a warning may be issued for a first violation, subject to the exceptions mentioned above.
The third misconception is that the GVH’s decision is final and cannot be challenged. An administrative lawsuit may be filed against the decision within 30 days, while an appeal against rulings may be filed within 8 days.
When the defense Depends on the Company's Own Documents
The outcome of the GVH proceeding depends on what the company can prove. In some situations, it is difficult to correct a misstep after the fact:
- If the business claims that its agreement is of minor significance (de minimis) or that the conditions for an exemption—that is, an exception to the prohibition—are met, it must substantiate this in accordance with the provisions of competition law (Sections 13 and 17 of Act LVII of 1996 on the Prohibition of Unfair Market Practices and Restrictions on Competition).
- If the business is part of a corporate group, the group’s net revenue may also affect the upper limit of the fine; therefore, mapping the group’s structure is part of the risk assessment.
- In the case of a small or medium-sized enterprise, the possibility of issuing a warning depends on whether this is a first-time violation and whether the case falls under any of the excluded circumstances.
- Once a decision has been made, the 30- or 8-day deadline for filing an appeal begins on the date of receipt or notification, depending on the type of decision.
In these situations, a legal review prior to the company’s initial response during the investigative phase protects the company. Our firm represents the company in competition authority proceedings and handles the legal preparation of its defense. For additional topics related to competition law, see the in a collection of articles on competition law finds.
Following a data request or on-site investigation, it is advisable to first gather the documents that substantiate the legality of the agreement or practice under review and, at the same time, calculate the net revenue for the entire corporate group for the previous fiscal year. Upon receipt of a decision, the type of decision and the date of service must be recorded, as this determines whether you have 30 or 8 days to file a lawsuit.
Frequently Asked Questions About GVH Proceedings
Will the GVH proceedings begin if someone files a complaint against our company?
A complaint or report does not, in and of itself, trigger a competition authority proceeding. A complaint does not obligate the GVH to initiate a proceeding, and there is no statutory deadline for its resolution. A proceeding begins only if the GVH orders an investigation.
In what types of cases can the GVH initiate proceedings?
The GVH may take action in cases involving anti-competitive agreements, abuse of a dominant position, misleading business partners, and business mergers. In cases of unfair commercial practices against consumers, the GVH may take action if the conduct is capable of substantially affecting economic competition.
How much of a fine can a business face for violating competition law?
The maximum fine is 13 percent of the net revenue earned by the company or group of companies subject to the fine during the fiscal year preceding the decision. For a member of a corporate group, the group’s revenue may therefore also be taken into account. In addition to the fine, the GVH may prohibit the continuation of the infringing conduct.
How long does a GVH investigation take?
The processing deadline is 3 months for cases involving the deception of business partners and 6 months for cases involving agreements that restrict competition or the abuse of a dominant position; this deadline may be extended twice if justified. For mergers, the simplified procedure takes 30 days, and the full procedure takes 4 months.
Do GVH proceedings always result in a fine?
No, the Competition Council may also determine that the conduct does not violate the law. In the case of a first competition law violation by a small or medium-sized enterprise, a warning may be issued instead of a fine. This is not possible in cases of price-fixing in public procurement, market-sharing, or violations committed against vulnerable consumers.
How many days do we have to challenge the GVH's decision?
An administrative lawsuit may be filed against the decision within 30 days of receipt. The deadline for filing a lawsuit against an order is shorter: 8 days from the date of notification. Therefore, to calculate the deadline, both the type of decision and the date of service must be recorded.
If a company is involved in a GVH proceeding, the most important decision is made before the initial submission of information; therefore, it is advisable to assess at that time which documents substantiate the legality of the conduct under investigation. We assist in representing the company during the investigation and decision-making phases of the GVH proceedings, review the agreements under scrutiny and the revenue data used as the basis for the fine, and manage the deadlines for filing a lawsuit. About our firm: on our About Us page You can read it, and at our Budapest office, the [email protected] titled, the +36 1 200 3447 by phone or at the on our Contact page You can request an appointment using the form provided.
