The Hungarian Competition Authority (“GVH”) has updated its guidance on merger control (“Updated Merger Guideline”). Effective as of 1 January 2025, the Updated Merger Guideline introduce new considerations and clarifications on, inter-alia, control relations, trust asset management and the standstill obligation. Filing fees will also be increased from 20 January 2025. This article provides a summary of the most relevant updates.

1. Clarifications on “Effective Control”

Principles derived from a recent Curia decision clarify that:  

• Effective control requires legal, durable, and significant influence over a company’s decision-making processes. Occasional involvement in decisions does not constitute effective control.
• Joint employment relationships, where an individual works for two companies, do not establish effective control if the employment-related directives pertain only to one of the companies and do not influence the other’s market behavior.

Acquiring a minority stake may constitute a notifiable merger if it:

• Provides significant voting rights exceeding those of the next largest shareholder.
• Allows control over decisions in a company where other shareholders rarely exercise their rights.

A notification is required if such control is expected to persist.

2. Concentrations not subject to merger notification

The GVH’s jurisdiction does not extend to certain transactions, including:

• Transferring a company from one administrative center to another under laws, regulations or government decisions.
• Granting or revoking independent decision-making rights by state or municipal entities.

However, if non-state decisions partially influence market effects, the GVH retains authority to assess these impacts.

The conversion of effective control into contractual control is not considered a new merger if:

• The original acquisition of control was lawfully notified to or acknowledged by the GVH.
• At the time of acquisition, the transaction did not require notification.

3. Contract-based control by trustees 

The Updated Merger Guideline explicitly recognizes that trustees under fiduciary asset management contracts (as defined in the Hungarian Civil Code) exercise contract-based control over the companies whose assets they manage. While the owner may monitor the trustee’s activities, they cannot issue directives concerning the assets. Therefore, trustees retain substantial autonomy to determine the market behavior of managed companies.

4. Standstill obligation violation  

To assess whether companies comply with the standstill obligation, the GVH provides examples of decisions affecting a company’s market behavior during the standstill obligation period (“végrehajtási tilalom” in Hungarian), including:

• Approving significant deviations from the business plan.
• Entering into substantial financial commitments.
• Appointing new executives.
• Altering the company’s main activities or expanding its scope.

Even abstaining from veto rights during this period is considered participation in decision-making. Violations extending over a fiscal year are unlikely to escape scrutiny, given the importance of annual business cycles.

5. Filing fee increases

Additionally, as of 20 January 2025, filing fees have been increased as follows:

• Fast-track procedure: from HUF 1 million to HUF 1.3 million.
• Phase I procedure: from HUF 4 million to HUF 5 million. 
• Phase II procedure: from HUF 19 million to HUF 21 million.

These updates introduce important nuances in determining control, the scope of GVH's authority, and obligations during the standstill period. Companies planning transactions should review their transaction structures in light of these clarifications to ensure compliance with the Updated Merger Guideline.

If you need more information on merger control in Hungary, please contact Gábor Kutai or Kinga Kálmán. 

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