In October 2024, the Hungarian Competition Authority (GVH) published its first comprehensive analysis on the current state and potential of artificial intelligence (AI) in Hungary (“Report”). The Report highlights the GVH's findings and recommendations based on their market investigation.

I. Purpose and Scope of the Analysis

The GVH’s main objective was to determine if the rapid spread of AI-based technologies could distort competition across sectors and increase consumer vulnerability. The GVH explained that generative AI solutions significantly impact economic growth and influence the development paths of emerging economies. The stronger and more accessible these AI models are, the more economic and social benefits they can provide. However, to realize these benefits, a competitive developer market is essential. This analysis is the GVH’s first step toward ensuring robust competition in the AI field.

To gather insights, the GVH sent detailed questionnaires to major multinational tech companies and generative AI developers. These questions covered their AI developments, services, and consumer protection practices. The banking and telecommunications sectors were specifically examined due to their priority status in Hungary’s AI landscape.

II. Key Findings

The Report emphasizes that effective AI model development requires critical resources: large, diverse datasets, sufficient computing power, a skilled workforce, and solid financial backing. Ownership of essential pre-trained model inputs is highly concentrated, typically held by international tech giants who control various points along the value chain. However, the rapid evolution of AI technology means that power dynamics within this value chain remain fluid. Competition authorities are advised to monitor these developments closely to ensure a competitive environment.

For Hungary, the Report notes that AI adoption is low, especially among small and medium-sized enterprises (SMEs). Limited capital and a shortage of skilled labor contribute to this slower uptake. Companies that are using AI, such as for chatbots, fraud detection, and translation, are mainly applying it to non-core tasks like internal administration. In the banking and telecommunications sectors, AI adoption is still limited, though some firms are investing in training to expand their AI capabilities. Large companies are likely to expand AI use in the coming years, while SMEs risk falling behind.

The GVH also cautions that languages like Hungarian could face disadvantages, as self-learning AI systems are often trained on data in major world languages.

III. GVH Recommendations

The GVH emphasizes the need for AI service providers to give clear, transparent information to consumers. This includes transparent commercial practices visible both during service presentation and before deployment.

The GVH also encourages the Hungarian government to create an environment that supports AI adoption, particularly for SMEs. A supportive ecosystem is vital for competing with international tech companies. Effective coordination of public financial and strategic resources is also needed to develop and expand large language models in Hungarian.

IV. Conclusion

The Report underscores AI’s growing role as a competitive factor in various markets. As multinational platforms enter the market, Hungarian SMEs could face competitive disadvantages if they do not embrace AI. To foster fair competition in AI-affected markets, the GVH stresses the need for government support and continuous monitoring by competition authorities.

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

VISIT OUR COMPETITION LAW HOMEPAGE