On 10 May 2024, the latest amendment to the Hungarian Competition Act (“Competition Act”) entered into force, bringing significant changes to the regulation of restrictive agreements, de minimis exceptions and statute of limitation for damages for competition law infringements (“Amendment”). 

I. Relief for restrictive joint venture agreements

According to the Amendment, an agreement between parent companies and their jointly controlled undertaking (“JV”) is not restricting competition if it relates only to practices in the relevant markets where the JV operates. This new exemption aligns with the Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (2023/C 259/01), which stipulates the same rules. This means that the legislator generally exempts agreements between JVs and their parent companies from the prohibition of restrictive agreements.

Consequently, any agreement between the parent companies and their JV which is generally restrictive (e.g., non-compete clauses, vertical restrictions, exclusivity terms, exchange of sensitive data) will not infringe competition law as long as these restrictions pertain to operations in the relevant markets where the JV is active. 

Nonetheless, the Amendment does not change the rules regarding the distinction between independent and non-independent undertakings, i.e. JVs and their joint controllers continue to be considered independent, divided into separate groups of undertakings from a merger clearance perspective.

II. Narrowing de minimis exemptions

In the future, no exemption under the de minimis rule will be applicable for decisions by any group of undertakings (e.g., associations) with a restrictive purpose.

As background, the Competition Act formerly allowed for de minimis exemptions for association decisions restricting competition by object. This former interpretation gained ground in one of the most important cartel decisions from last year, the Curia judgment in the Personnel Consultants case (Kfv.II.37.762/2022/24.), which was strongly opposed by the Hungarian Competition Authority (“GVH”). The reasoning for the Amendment stresses the logic that the de minimis exemption applies to practices with no appreciable effect on competition, therefore restrictive purpose cannot be covered by this exemption. The Amendment makes it clear that neither type of restrictive agreements (i.e. agreement between undertakings, concerted practices, decisions by associations) fall under the de minimis rule.

III. Delayed start date for statute of limitation

The new start date for the statute of limitation will be delayed until the official publication date of the full, non-confidential decision of the GVH or the European Commission (“Commission”), instead of the receipt of the confidential version. The reasoning for the Amendment highlights that injured parties are typically able to assess the legal basis of their claim and their enforcement options no earlier than on the publication date of the full, public version of the decision, and that their claim requires full knowledge of the detailed reasoning for the decision.

The new statute of limitation for damages for competition law infringements will apply in cases where the infringement (i) occurred before 15 January 2017, (ii) was established by the decision of the GVH or the Commission after 15 January 2017, (iii) provided that the statute of limitation has not expired on 15 January 2017 and (iv) the claim was brought before court after the entry into force of this Amendment, i.e. 10 May 2024. 

IV. Conclusions

Overall, the Amendment aims for clarity at the statutory level, reflecting on the latest case law and policy developments. Allowing more flexibility between the parent company and the JV may facilitate a more efficient business relationship, while narrowing de minimis exemptions resolves a previously contradictory situation. A delayed start date for the statute of limitation may serve for more informed and clarified decisions to file a claim for damages. 

If you need more information or further guidance on the Amendment, please contact Gábor Kutai or Kinga Kálmán. 

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