Merger Control 2023 Comparisons

Act LVII of 1996 on the Prohibition of Unfair Trading Practices and Unfair Competition as modified several times since its enactment (the “Act”) regulates merger control issues, among other things. The Act applies to all mergers which do not meet the EU notification thresholds under the EU merger control regulations.

The president of the Hungarian Competition Office and the chairman of the Competition Office regularly issue joint interpretations of the Act, the most relevant to merger issues being guidance No 8/2017 (as modified), No 2/2023, No 3/2023 and No 4/2023. 

There are several laws regulating foreign investments in Hungary, though discussion thereof would be beyond the scope of this article. These laws regulate other aspects of a transaction and do not relate to questions of merger control.

The authority in charge of merger control and other competition and antitrust issues is the Office of Economic Competition (the “Competition Office”).

Notification is compulsory if the planned transaction involves at least two unrelated parties with aggregate net sales revenue over HUF20 billion, in such a way that each has a separate net sales revenue of more than HUF1.5 billion. There are a few exemptions from the basic rule of obligatory clearance, such as:

• where the government may exempt certain transactions from public interest due to national strategy, especially in order to maintain workplaces or supply sources;
• for acquisitions carried out by insurance companies, financial institutions or holding companies, etc for a temporary period of maximum one year with the goal of organising the resale of the acquired shares or assets;
• for acquisition by state-owned companies within the scope of state subsidies approved by the EU; and
• for acquisitions executed by state-owned or privately held capital funds in connection with financial transactions which became necessary due to the COVID-19 pandemic.

Notification is possible on a voluntary basis in the event that the HUF20 billion threshold is not met, but where the planned transaction involves parties with aggregate net turnover over HUF5 billion, and where it cannot be concluded with certainty that the merger will not significantly impede competition on the relevant market. This is especially the case where the merger is capable of establishing or strengthening a dominant position on the relevant market.

Failure to notify a merger whose notification was compulsory may result in the imposition of a fine – currently a maximum daily HUF300,000, calculated from the date of the transaction having closed without merger clearance. These penalties are applied by the Competition Office in one to three cases per year. The fine amount may not exceed 10% of the combined net revenue reached in the previous business year by the group companies in which the relevant company is a member.

Furthermore, if the Competition Office concludes that the transaction could not have been approved in the case of proper filing, it may order the controlling entity or the parties to reverse the illegally executed transaction – for example, by selling the business shares or business assets acquired without clearance, or by terminating the agreement establishing control or joint control, etc. The resolutions of the Competition Office are made publicly available on its website.

Transactions resulting in the concentration of companies fall under merger control regulations. Relevant transactions include the following:

• where one company merges into another previously independent company, or two previously independent companies merge with each other, establishing a new entity;
• where one or more companies jointly, directly or indirectly acquire a controlling interest in another company by purchasing its shares (or by purchasing business parts or assets of an independent company); and
• where several independent companies jointly set up a jointly controlled company, and where the new company will be capable of functioning in all respects as an independent company.

Shareholders’ agreements or articles of associations establishing de facto control or joint control for one or more parties also fall within the scope of the merger regulations. Only those transactions or agreements which are executed between unrelated parties are relevant for merger control purposes. Internal reorganisations within a company group are not affected. 

Direct and indirect controls are distinguished by the Act. Direct control is established when the company:

• holds over 50% of the shares or voting rights in the company under control;
• is in the position of appointing or dismissing the majority of the executive officers; and
• based on a contract or otherwise, is authorised or is in the position to exercise major influence over the other company’s decisions.

A company has indirect control over another company when the latter is controlled, independently or jointly, by one or more companies under the control of the former.  Minority position in itself does not qualify as control unless other aspects as previously described establish controlling influence – eg, on a contractual basis.

Filing of the planned transaction is required where the combined net sales revenue of all groups of companies involved in the previous business year (based on legally closed financial records) in aggregate exceeded HUF20 billion, provided that there are at least two groups of companies, whose net sales revenue in each case exceeds HUF1.5 billion.

When calculating the HUF1.5 billion net sales revenue, previously unreported acquisitions of control or other mergers between the same two company groups executed during the last two years before the current transaction also need to be taken into account. Where the above thresholds are not met, but it is not apparent that the concentration does not significantly reduce competition in the relevant market, there is a possibility for voluntary reporting, provided that the combined net sales revenue of the company groups involved exceeds HUF5 billion. 

The jurisdictional threshold is the same in each sector. Nevertheless, the basis of the calculation differs in certain sectors – for example, the following shall be taken into account:

• for insurance companies, the amount of the gross insurance premium;
• for investment service providers, the revenue from investment services; and
• for stock exchanges, the annual fee paid by the traders to the exchange.

In the event of a merger of financial institutions, and depending on the type of the financial activity, the following must be calculated:

• interest or similar income;
• income from securities;
• commissions received;
• net profit on financial operations; or
• other operating income.

When calculating the net revenue, the revenue deriving from sales on the Hungarian market needs to be considered. 

Jurisdictional threshold is calculated in Hungarian forints, the Hungarian currency. Sales and assets booked in foreign currency have to be transformed into Hungarian forints on the official exchange rate of the National Bank of Hungary on the last business day of the last business year legally closed by the company. In the event of acquiring control over assets or business parts, the net revenue deriving from the use of the assets or generated by the business part in question needs to be taken into account.

When calculating the jurisdictional threshold, the combined net sales revenue in the last business year for each relevant company needs to be calculated. A company is relevant if it qualifies as a direct participant or as an indirect participant, including those companies which are under joint control by a direct or indirect participant (calculating only 50% of the net revenue of these jointly controlled companies).

The revenue of the company which, as a result of the transaction, will lose control over the target company, as well as of the companies controlled by this company (except the target company), will not need to be taken into account when calculating the threshold figure. Changes in the business during the reference period (such as other acquisitions, divestments or business closures that take place after the notification) are not relevant for the calculation of the jurisdictional threshold, but their economic effects in the ongoing clearance proceedings are investigated and reflected in the final decision of the Competition Office.

Foreign companies are not exempted from filing in Hungary based merely on the fact that they do not have a registered seat or assets in Hungary. For foreign-to-foreign transactions, filing has to be made in Hungary only if the relevant companies’ aggregate net sales revenue deriving from sales on the Hungarian market exceeds the jurisdictional threshold, regardless of whether they have a company registered or assets held in Hungary.

The Hungarian jurisdictional threshold is not market share-based.       

Joint ventures become relevant for merger clearance if two or more companies, due to a contractual arrangement or otherwise, exercise joint control over another company. This may be the case for a voting agreement, according to which, the companies, regardless of their ownership ratio, can pass resolutions or appoint or dismiss officers of the company together only, or can assert major influence over the decisions of the other company. Furthermore, joint ventures involve merger laws if two or more independent companies establish a new company that will be capable of fully functioning.

The Competition Office may initiate an administrative procedure for investigating the circumstances of an unreported merger to establish whether the merger qualifies as a concentration that should have been notified mandatorily. In this case, the statute of limitations is five years calculated from the closing of the unreported transaction.

For concentrations that might have been reported voluntarily, the Competition Office may initiate an investigation within six months of the closing of the transaction.   

For concentrations that must be reported mandatorily, the implementation of the transaction must be suspended until clearance of the Competition Office is passed. No suspension requirement applies for concentrations that may have been reported voluntarily.

For concentrations that must be reported mandatorily, the Competition Office may impose a fine in the event of an early closing, the maximum amount of which may be HUF300,000 per each day of delay. These penalties are applied by the Competition Office in one to three cases per year.

For concentrations that may have been reported voluntarily, the Competition Office may not impose any fine if the transaction is closed without clearance. However, in both cases, if the transaction could not have been approved, the Competition Office may order the parties to reverse the transaction – for example, by obliging the purchasing party to sell shares or assets of the target company or the parties to terminate the joint control established illegally. Decisions of the Competition Office, including these types of decisions, are made public.       

For mandatory notifications, there are no general exceptions for early closing. However, the Competition Office, upon the well-reasoned request of the filing party and taking into account all relevant factors of the planned transaction and the effect of the transaction on the market circumstances, may allow the requesting party to exercise its control before the clearance is made available, especially in those cases when the exercise of control is necessary for protecting the investment value of the petitioner. This may not result in the implementation of the transaction before the clearance is made, with the parties having to find another method of arrangement for the exercise of controlling interest.

The applicant must file for this request in writing within five days from the resolution of the Competition Office on commencing the merger clearance procedure, and must describe in detail to the authority the circumstances which make the exercise of such early control necessary, as well as describe the method by which such exercise of control is planned. The petition also has to include plans for reversing the situation in the future in case no clearance is provided.

See 2.14 Exceptions to Suspensive Effect.

The notification must be filed following the earliest date of the following events:

• entering into the transaction agreement;
• publication of the public bid; or
• acquiring control.

Typically, filing for clearance is made based on a binding written agreement of the parties. Nonetheless, filing is also possible based on a good faith decision of the parties. Such intention must be proved to the authority – for example, by presenting a signed letter of intent or pre-contract.

The filing fee for a simplified clearance is HUF1 million. If the clearance is issued in a “phase-one” investigation, the fee is in aggregate HUF4 million (in which case, HUF3 million has to be paid in addition to the HUF1 million already paid).

Finally, if the clearance is issued as a result of “phase-two” proceedings, the fee is HUF19 million (in which case, HUF18 million has to be paid in addition to the HUF1 million already paid).

For mergers, joinders and public bids, the direct participant of the transaction has the obligation to file for merger clearance. In all other cases (eg, acquisition of shares or assets) the party acquiring control or its controlling company is under the filing obligation.

Filing must be performed by filling out a simplified notification made available on the Competition Office’s website. The questions relate to:

• the introduction of the parties and their group companies;
• a description of the planned transaction and the market situation;
• a definition of the relevant market, and presenting market share data of the participants and the competitors;
• a description of the market situation following the accomplishment of the transaction; and
• a listing of the most important contractual partners of the petitioner and the target company, on both the supply and the sale side, etc.

If it cannot be concluded with certainty that the merger will not significantly impede competition on the relevant market, the parties are required to complete the supplemental part of the notification form where complex market analyses are to be given, and the petitioner has to describe the benefits and the potential disadvantages of the merger. 

The agreement relevant to the transaction (eg, the purchase agreement) needs to be filed. The language for the proceedings is Hungarian. Documents in English may be filed in the English language; nevertheless, the case examiner of the Competition Office may order filing of a Hungarian translation or a summary of the document(s) in Hungarian.

If the filing is incomplete, the simplified procedure does not apply, and the case examiner opens a formal investigation and may request further documents, additional information and the answering of questions regarding the parties, the transaction and the market situation. The examiner sets a timeframe for the provision of the additional information. In practice, it is likely that for a full investigation, the examiner will request further documents and data from the petitioner.

The examiner, in agreement with the Competition Office, commences an investigation procedure when it is likely that the petitioner presented an important fact in a misleading manner to the authority in the simplified proceedings, and as a result of which the simplified clearance certificate was issued without opening investigation proceedings.

If the Competition Office already issued a clearance resolution following a full investigation, and later it becomes likely that such resolution was based on misleading information, the examiner, in agreement with the Competition Office, commences new investigation proceedings for the reinvestigation of the case – in these proceedings, the Competition Office may withdraw the previously issued clearance resolution.

Furthermore, the Competition Office may impose a fine on the petitioner or another person who negligently (or deliberately) provided misleading data or information in the clearance proceedings. 

Within eight days following the filing and payment of the procedural fee of HUF1 million, the case examiner will order the commencement of the clearance proceedings if the filing is incomplete or if it cannot be concluded with certainty that the merger will not significantly impede competition on the relevant market. When no further investigation procedure is necessary, within this eight-day period, the case examiner, in agreement with the Competition Office, closes the case and issues a certificate showing that the clearance procedure is not necessary (simplified clearance).

If the clearance proceeding is initiated within the foregoing eight-day period, the case examiner may request additional documents and data from the parties and third persons affected by the merger and, based on its findings, prepares the investigation report for the Competition Office. The Competition Office may request a further investigation from the examiners’ team or may proceed to prepare the written document summarising its preliminary findings, which will be sent to the parties. This has to include the facts, the basic interpretation of the situation, and the planned actions or resolution of the Competition Office.

The parties must be provided with sufficient time to respond to the document. The Competition Office, ex officio or upon the request of the parties, may hold a hearing, and then passes its resolution. No preliminary findings document or hearing are necessary if the Competition Office allows the merger unconditionally. 

The clearance procedure’s timeframe depends on the case’s complexity. If the clearance proceeding was initiated because the filing was incomplete, but the investigation does not prove any significant impediment of the competition on the relevant market due to the concentration, the Competition Office issues its clearance within 30 days (this term may be extended for an additional 20 days). In all other cases, the timeframe for the clearance proceedings is four months, but this term may be extended for an additional two months.        

The petitioner(s) may request a pre-notification discussion from the Competition Office in order to clarify the scope of data, information and documents required to be filed in the given case. Any document, information and data provided by the parties in this phase to the Competition Office shall be treated as confidential and may be used exclusively for the purposes of the pre-notification discussion.

The examiner or the Competition Office may request further information, data or provision of documents throughout the proceedings. For smaller companies which do not have up-to-date market information available on hand, provision of information on market share of competitors and other market-related information might prove especially difficult. In each case, when the examiner requests the provision of additional information from the parties or third persons, the lapse of procedural deadlines is suspended.         

There are no regulations available to expedite the investigation and the clearance proceedings. If the planned transaction does not raise any concentration concerns and the examiner is of the view that not even an investigation of the merger is necessary, the examiner, in agreement with the Competition Office, may issue a clearance certificate within eight days from the date of the filing.

Consequently, the only quick clearance possibility available is in those cases where, based on the market data, there are absolutely no concentration concerns in connection with the transaction and not even the commencement of an investigation proceeding is necessary.

The substantive test is basically the “SIEC test”, according to which concentrations that would lead to a significant impediment of effective competition in the relevant market, especially where the merger is capable of establishing or strengthening a dominant position, are to be prohibited.

The Competition Office investigates the horizontal, vertical and portfolio (or conglomerate) effects of the concentration. In addition, the Competition Office examines whether the merger can establish or strengthen a dominant position on any relevant market or a part of it.

A merger has horizontal effects if at least one market exists in which both parties are active.

A merger has vertical effects if at least one market exists in which one of the merging parties is active as a seller while the other is a buyer.

The portfolio effect arises from the increase in the range of goods produced (distributed) by the merged entity. This may lead to adverse competitive effects when the producers (distributors) of complementary goods (purchased by the same customers) merge.

A market is considered horizontally affected if the combined market share of the merging parties exceeds 20%.

A market is considered vertically affected if one of the merging parties is active as a seller while the other is a buyer, and either the buyer or the seller has a market share in excess of 30%.

Finally, a market is affected by portfolio (conglomerate) effects if the combined market share of the merging parties exceeds 30%.

In the case of post-merger market shares below the above-mentioned thresholds, competitive concerns are deemed unlikely, precluding the significant impediment of effective competition in the relevant market.

The concept of economic dominance is complex, and assessing its existence or a significant reduction of competition requires a comprehensive analysis of the market situation and operating conditions of the undertaking concerned. In any case, the Competition Office considers a market share of less than 25–30% to be the threshold below which a single dominant position is unlikely.

The Competition Office regularly relies on the decisions of the European Commission, especially in connection with market definitions.

The Competition Office examines:

• the structure of the affected markets;
• the existence of potential competition in the affected markets;
• the supply and sales opportunities;
• the costs, risks, technical, economic and legal conditions of entry and exit;
• the market position and strategy, economic and financial capabilities, business behaviour, and internal and external competitiveness of the merging parties; and
• the impact of the concentration on suppliers and business partners.

In addition, the Competition Office investigates the concentration’s horizontal, vertical and portfolio (or conglomerate) effects and whether the merger can establish or strengthen a dominant position on any relevant market or a part of it.

In a horizontally affected market, the Competition Office carefully examines unilateral, co-ordinated, conglomerate or portfolio effects and the existence of directorate interlockings.

In a vertically affected market, the Competition Office investigates vertical concerns that result from internalising formerly external seller-buyer relations (such as price discrimination and refusal to supply) and eliminating potential competition.

In the field of portfolio (conglomerate) effects, the Competition Office analyses the potential for product tying, possible incentives for market foreclosure, and the possible lessening of the competition resulting from the accumulation of important sources or inputs (such as intellectual property, customer or other databases, etc).

If the merger is likely to have adverse effects, the Competition Office carefully considers the merger-related economic efficiencies or benefits. The Competition Office may, in support of the clearance, take into consideration whether the parties’ post-merger production costs will decrease, provided that this cost reduction is a merger-specific result, is verifiable, and a fair share of the resulting benefits are sufficiently passed on to the consumers.

In addition, the Competition Office may also take into consideration the failing firm doctrine, provided that the parties prove that the target undertaking would go out of the market in the absence of the merger.

The Competition Office does not take into consideration any non-competition-related issues. Mergers justified by public interest and other public policy objectives may be exempted by the government from the mandatory clearance obligation (see 2.1 Notification).

As mentioned in 1.2 Legislation Relating to Particular Sectors, several laws regulate foreign investments in Hungary. These are separate from the merger control rules. 

A very important technical difference from the EU rules is that if a joint venture acquires control over another undertaking, the net sales revenues of the joint venture and its parents must be considered separately.

Regarding the substantive review, the Competition Office examines the possible co-ordination between the parents as part of the qualification of the joint venture’s full functionality. Where the full functionality is established, the creation or acquisition of a joint venture is to be reviewed under the merger control substantive test, and the joint venture is presumed to be unlikely to raise any competition issues if the net sales revenue of the joint venture is under (or, in the case of a newly created joint venture, is likely to fall below) HUF150 million per year. If, however, the joint venture aims for or has the effect of the co-ordination of its parents, it is to be analysed by the Competition Office as a restrictive agreement and be permitted only if the conditions for individual exemption rules equivalent to Section (3) of Article 101 of the TFEU are met.

The Competition Office forbids the completion of the transaction if the concentration would significantly impede competition in the relevant market, especially if it would create or strengthen a dominant position. The authority issues such a decision in written form, in which it must provide detailed reasoning of its conclusion.

The resolution must contain the description of the relevant market, the market participants and an analysis of the effect of the planned transaction to the competition on the market. The reasoning of the resolution must support the argument that the concentration would significantly impede the effective competition.

The parties are entitled, during the investigation phase or later (before the issuance of the final resolution), to offer remedies in order to reduce the negative effects of the transaction on the market. The petitioner may offer to sell certain entities held prior to the acquisition or certain entities purchased as a result of the transaction, or may offer to undertake certain behaviour or obligations for the future in order to mitigate the negative effects of the transaction.

The Competition Office may also initiate such undertakings during the proceedings in those cases where clearance of the transaction without remedial actions would raise competition concerns.

Remedial actions are applied in those cases where the planned concentration is capable of impeding competition on the relevant market, and the Competition Office may not issue a clearance resolution unless the situation can be cured by remedial actions. 

The remedial actions must be able to maintain competition following the completion of the planned transaction. The goal is to mitigate the adverse effects of the transaction on the market and protect the interests of the market participants and the consumers. Only those remedial actions and/or obligations that have been discussed with the parties and to which the relevant party agreed may be ordered by the Competition Office.

Typical remedies include divesting certain overlapping businesses by selling business entities or business parts or assets, or terminating control or joint control over certain companies or business units. These divesting obligations might be set out as a condition precedent or as a condition subsequent.

Where the divesting condition is set out as a condition subsequent, a short but reasonable deadline has to be defined in the clearance resolution for the execution of the necessary actions. In this case, the Competition Office will review the timely fulfilment of the condition. Sale of business units or assets to third parties as a remedial action is possible only to purchasers previously approved by the Competition Office. 

Other types of remedies include undertaking of certain obligations – for example, remedial behaviour or refraining from certain activities. These may include undertaking an obligation to ensure access to third parties, to certain assets or to technology, or undertaking an obligation not to share information with certain third parties (establishing firewalls). 

Only those companies who, in the merger clearance proceedings, qualify as parties may be obliged to perform certain remedial actions or to undertake obligations.  Undertaking of obligations for certain behaviour has to be established for a specific period of time, defined in the resolution.

The parties may already offer remedies in the filing documents, or may offer such remedial actions during negotiation with the authority. The Competition Office may also recommend the imposition of certain remedies, but in practice such remedies will be discussed with the parties during the proceedings. 

In most cases, the remedies have to be fulfilled before the closing of the planned transaction. In exceptional cases, the Competition Office may allow post-closing remedies in its resolution by setting a certain deadline for the fulfilment of the obligations. The parties have to keep the authorities informed about the progress and results of compliance. Where the obligations are not fulfilled by the obligor, the Competition Office may withdraw its resolution permitting the merger. In this case, the already completed transaction must be reversed.

Resolutions of the Competition Office are issued in writing to the parties, and are also published on the Competition Office’s website. The published versions do not include data and information that the parties requested be treated as business secrets.

No such resolutions have been issued by the Competition Office in the last three years.       

Clearance decisions typically do not address ancillary agreements or restraints. However, the practice of the Competition Office in respect of ancillary restraints is substantially identical to that of the European Commission, and the Hungarian Competition Act specifically includes that any restraint which is ancillary to the concentration does not constitute a prohibited restriction of competition.

The parties themselves must evaluate the situation and decide whether a given ancillary arrangement can legally be undertaken based on all aspects of competition regulations. Under Hungarian law, no separate clearance procedure is available for the parties to request the official opinion of the Competition Office in a case of restraints, shareholders’ agreement, etc.

Third parties who might be interested in the outcome of the merger clearance (eg, competitors, suppliers and purchasers) may be invited by the Competition Office for a consultation during the merger clearance procedure. In such case, the interested third parties will be informed – without sharing any confidential information with them – on the planned merger and will be invited to express their opinion and potential concerns in connection with the planned transaction.

The interested third parties have 20 days to file with the Competition Office a written document summarising their views, concerns and recommendations in connection with the planned transaction and obligations. Third parties invited for this consultation do not qualify as parties in the proceedings, do not have access to the files (other than for answering questions and expressing their opinions and recommendations) and do not have other rights in the proceedings.

The interested third parties are contacted in writing by the Competition Office. They may receive a written questionnaire and are expected to respond in writing within 20 days.

The Competition Office makes the fact of the notification for clearance publicly available on its website, unless the filing party requests keeping the fact of the planned transaction a business secret. Description of the transaction and other details shall not be made available to the public by the Competition Office during the clearance proceedings.

On a general level (policy matters, enforcement priorities, etc), the Competition Office participates in:

• the European Competition Network (ECN) to ensure effective and consistent enforcement of European competition law in the investigation of restrictive agreements (Article 101 TFEU), abuse of dominant position (Article 102 TFEU) and merger cases;
• the European Competition Authorities (ECA), which consists of the competition authorities in the European Economic Area (EEA); and
• the International Competition Network (ICN), which is an informal network of 141 competition authorities from 129 jurisdictions worldwide.

Regarding practical co-operation related to specific transactions, a complex case referral system operates between the Competition Office and the European Commission pursuant to Council Regulation No 139/2004. For these merger case referrals, all information of the specific transaction may be exchanged between the Competition Office and the European Commission without the prior approval of the party to whom the information relates. However, the confidentiality of information exchanged in the network (and with the competent authorities of third countries) should be safeguarded.

In merger clearance cases, no appeal against the decision of the Competition Office to another administrative authority is possible under Hungarian law. A decision of the Competition Office might be challenged in court by filing a claim for judicial review with the Administrative Court.

There is no deadline fixed by law for the court review process. The judgment of the Administrative Court is final and is only subject to extraordinary review by the Supreme Court of Hungary in exceptional cases. Typically, it takes a number of years to obtain a final judgment. In the case of mergers, the authors are unaware of any decision of the Competition Office successfully being brought before the court.

The procedural code of the administrative courts, in principle, allows for any third party to file a petition if it proves that the challenged decision of the Competition Office “directly affects its rights or its legally protected interests”. However, the Supreme Court of Hungary has applied the rule restrictively, and in a precedent case refused the standing for a third party from initiating a court review of a merger decision based on the sole reason that it was a competitor of the parties that the clearance decision addressed.

In any case, should any third party successfully challenge a merger clearance, the court would overturn the clearance with retroactive effect (ie, the court has no right to amend the clearance decision) and would require the Competition Office to re-examine the transaction.

In certain segments of the industry, for the acquisition of control by a foreign company, the approval of the Minister of Economic Development and/or the Minister of the Interior is required prior to the completion of the transaction.

Due to a recent modification of the Act, the jurisdictional thresholds have been increased to the amounts previously discussed in this article (see 2. Jurisdiction in particular). This was necessary due to inflation in Hungary and the devaluation of the local currency (the Hungarian forint) compared to other major currencies. In addition, a recent amendment of the Act made it clear that if only the lower threshold (aggregate net revenue above HUF5 billion) is satisfied, filing is not mandatory.

Over recent years, there has been a clear tendency by the Competition Office to impose fines for implementing acquisitions without mandatory merger clearance. Depending on the individual circumstances, the fine in these cases varies between HUF50,000 and HUF300,000 for each day of delay. The Competition Office imposes the minimum fine if the parties voluntarily report the infringement and waive the right to challenge the decision of the Competition Office before the court. Most of these cases involve Hungarian firms, and no transaction has been prohibited in the last five years.

The Competition Office has applied remedies (typically pre-closing divestitures) only in some cases over the last five years – none of which involved purely foreign-to-foreign transactions.

Access to “Big Data” has become a growing concern in merger control review. The Act was recently amended to the effect that the Competition Office, in the review of mergers in digital markets, should specifically assess how innovation and competition are affected due to the merging parties’ increased access to competitively relevant data and their ability to aggregate large data sets.

Another notable trend in Hungarian merger control review shows the Competition Office making significant efforts towards further reducing the duration of clearance proceedings and easing administrative burdens. In line with these objectives, in 2023 the Competition Office introduced a new simplified merger notification form applicable to mergers that do not raise any competition concerns.