For the Hungarian Competition Authority (GVH), the year 2023 was defined by strong actions against technology giants, with a particular focus on the protection of families and other vulnerable consumer groups, and measures taken to tackle inflation and efficient merger control. The GVH is expected to remain vigilant and proactive in 2024 aided by its significantly expanded portfolio of instruments.
1.Extended powers regarding whistleblowing and foreign subsidy
The GVH, in addition to investigating market players, seeks to promote consumer welfare in several other ways (e.g. by making regulatory proposals to the legislator and by educating consumers). For these tasks the GVH will be given significant powers in other domains in 2024.
As of 1 January 2024, the GVH will act as the responsible authority in connection with the European Commission's request for investigation under Regulation (EU) 2022/2560 on foreign subsidies distorting the internal market. The GVH may launch targeted investigations to examine the legality of foreign subsidies granted to market players.
The role of the GVH will also become increasingly important in relation to whistleblowing, as the changes implemented will see the GVH taking on certain tasks in relation to consumer complaints procedures.
2. Reinforced armoury for action against tech giants
The European Union is calling for stronger action to ensure that online intermediaries and platforms operate in a fair and consumer-friendly manner. Accordingly, the Regulation (EU) 2022/2065 on a Single Market For Digital Services and amending Directive 2000/31/EC (DSA Regulation) aims to prevent illegal and harmful online activities and intentional misinformation by setting rules for online intermediaries, platforms and app stores.
The regulation also applies to businesses established in Hungary or providing internet intermediary services in Hungary. Where such businesses act in breach of the DSA Regulation, the GVH, from 1 March 2024, may order the inaccessibility of electronic data (e.g. a website) where this is necessary to prevent a risk of serious harm to consumers. The GVH works closely with the National Media and Infocommunications Authority to ensure the effective fulfilment of its duties in relation to the DSA Regulation.
3. The GVH's proposals on online booking service providers materialise
A bill is currently being debated in Parliament which would introduce even stricter standards than Regulation (EU) 2022/1925 on contestable and fair markets in the digital sector and amending Directives (EU) 2019/1937 and (EU) 2020/1828 (DMA Regulation) for gatekeepers.
The bill, inter alia,
- requires the establishment of a Hungarian customer service and complaint handling mechanism operating in Hungary;
- establishes that in contracts between a gatekeeper and a company established in Hungary the payment deadline shall not exceed 45 days; and
- in certain cases, requires gatekeepers to provide independent legal advice on the applicable law in Hungarian, in a way that is accessible to consumers resident in Hungary or to businesses established in Hungary.
These developments are partly due to the recommendations made in the GVH’s final report on the online booking service industry. As we previously covered, in 2023 the GVH has launched an accelerated sector inquiry into the market and now finalized its draft report. In its final report the GVH:
- invites the legislator to prohibit online accommodation intermediaries from using so-called price parity clauses, which require accommodation providers undertaking that they will not offer the given accommodation at a lower price than the price set on their platform, or on their own platform;
- recommends market participants to make the search result ranking criteria transparent, so that consumers can make informed choices that benefit them; and
- in light of numerous complaints from accommodation providers, proposes to set out a regulatory framework for the general terms and conditions of online booking service providers to improve the efficiency of complaint handling mechanisms between online providers and accommodation providers and to balance the legal consequences of failure to perform by each party.
It can therefore be concluded that the Parliament and the Government are closely following the GVH’s sector inquiry in view of which we expect the GVH's proposals to be implemented.