1. Changes to the Competition Act

The provisions of the Act LVII of 1996 on the Prohibition of Unfair Market Practices and Unfair Competition (the "Competition Act") regarding the merger clearance application fee have been amended. Such changes took effect as of 1 January 2012. Although the amount of the fee remains unchanged, the following changes are introduced:

  • the fee of HUF 4 million shall be paid in all cases if a merger clearance is filed;
  • if the merger clearance does not fall under the simplified rules, the above amount shall be paid up to HUF 16 million, the remaining HUF 12 million shall be due, within 8 days as from the receipt of the Hungarian Competition Office's (the "HCO") relevant resolution. Should the applicant fail to meet this deadline, the procedure shall be terminated;
  • if the merger clearance application is withdrawn, only half of the fee already paid may be reimbursed;
  • the fee is due even if the HCO partly or fully approves or rejects the merger clearance application or terminates the procedure (e.g. due to lack of competence or necessity for approval);
  • if, in connection with the same transaction, a new merger clearance procedure is initiated or several merger clearance applications are included in the same submission, the fee shall be paid in respect of each merger clearance application.

Due to further amendments to the Competition Act, as a general, non-merger clearance-specific amendment, new procedural rules are in force as of 1 February 2012. The newsworthy changes include the following:

  • according to the new rules, the HCO may deliver its official communication via post or telefax to foreign undertakings as clients (instead of the previously compulsory, very often unsuccessful, public noticing);
  • contrary to previous rules, the termination of the merger clearance procedure is not compulsory if the HCO's request for additional information – partly or fully – has not been met by the applicant. It follows that the HCO, at its own discretion, may evaluate if it possesses enough information to meet a decision with regard to clearance of the merger.

2. New Merger Clearance Application Form

Earlier this year, the HCO opened a public consultation regarding the merger clearance form applicable under Hungarian law. The general aim of the revision of the form was to increase the transparency and the speed of the procedure, and furthermore, to decrease administrative burden of the undertakings. Therefore, the comments of companies and law firms were welcomed. As a result, the merger clearance application form has now been tailored – among others to practical requirements – and published via the HCO homepage along with a guidance paper. The amended merger clearance application form now follows more closely the structure and logic of the CO Forms applied in EU-level merger clearance cases.

The new merger clearance form is to be applied as from 1 February 2012 (i.e. in case of merger clearance requests to be filed on 1 February 2012 and afterwards).

As a novum, a shorter merger clearance form may be filed if certain criteria are met. This means that a more detailed analysis of the concerned product and geographic markets and the effects of the merger shall solely be required if there are:

(i) horizontal market overlaps (where the market shares of the direct or indirect parties to the merger is altogether at least 15%); or

(ii) substantive vertical connections between the concerned markets (where the market shares of the active participants is at least 20%).

This is good news to future applicants, however, in its guidance, the HCO highlighted that the application of the shorter version of the merger clearance form shall not automatically mean that the merger clearance falls under the simplified rules (i.e. a one-phased procedure). Moreover, the HCO shall nevertheless be entitled to request the completion of the information or the provision of additional information.

In addition, the HCO encouraged promoting the efficiency of merger clearance. To this end, prenotification for the undertakings with the authority is now ensured by law prior to filing. The aim of the prenotification is to bring more flexibility to the procedure, i.e. that questions in relation to the given case can be addressed leading to a more focused application and subsequent clearance procedure.

The HCO will continuously monitor the practical experiences in relation to the application of the new form, a review is planned to take place in two years.

Law: Act LVII of 1996 on the Prohibition of Unfair Market Practices and Unfair Competition

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

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The original publication date for this article was 05/01/2012.