The Hungarian Competition Act [Act LVII of 1996 on the Prohibition of Unfair and Restrictive Market Practices] (“Act”) contains the following sustainability-related competition law provisions:

1. Restrictive Agreements

According to Section 17 of the Act, an agreement is exempted from the prohibition of restrictive agreements pursuant to Section 11 of the Act provided that:

• it contributes to a more reasonable organization of production or distribution, the promotion of technical or economic progress, or the improvement of competitiveness or the protection of the environment;
• it allows trading parties not participating in the agreement a fair share of the resulting benefit;
• the concomitant restriction or exclusion of competition does not exceed the extent necessary to attain economically justified common goals; and
• it does not enable the exclusion of competition in respect of a substantial proportion of the goods concerned.

2. Mergers

The Act provides a public interest exemption from merger control in Section 24/A which could relate to sustainability.

According to Section 24/A of the Act, the Government may - in the public interest, in particular, to preserve jobs and to assure the security of supply - declare a merger of companies to be of strategic importance at the national level. Such mergers shall not be subject to an obligation of notification to the Hungarian Competition Authority pursuant to Article 24.

The law itself does not refer explicitly to sustainability, but it may be covered by the notion of “public interest” for the purposes of the above provision.

We refer to our answer to Question 1 above. We have no information about any new relevant Hungarian regulations under discussion.

According to the overview of the planned revision of the Horizontal Block Exemption Regulations (“HBER”) by the EU Commission, a chapter on sustainability agreements (the “Chapter”) is proposed to be included in the HBER. The Chapter proposes the introduction of the definition of sustainability agreements and explains when such agreements would not fall within the scope of Article 101(1). The Chapter also proposes guidance on how sustainability agreements would be assessed when they fall within the scope of that provision and may qualify for an individual exemption pursuant to Article 101(3) [https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1371]. It is expected that the Hungarian Competition Authority (“GVH”) will adopt these changes into its practice when the revised HBER will enter into force.

The GVH has been very active in the field of the correlations between sustainable development and competition law.

In October 2021, the GVH, as the host of the annual world conference of the International Competition Network ("ICN"), conducted a path-breaking international survey on the environmental sustainability aspects of competition law enforcement among competition authorities and non-governmental advisors ("NGAs") across the globe, with special regard to restrictive agreements. Within the framework of the survey, 52 competition authorities and 41 NGAs from around the world filled out the questionnaires associated with the project. This research is the first to assess the global interactions between sustainability and competition law. Following the analysis of the data, the experts of the GVH published the results in the form of a survey report which was nominated for Best Soft Law in General Antitrust category of the 2022 Antitrust Writing Awards of Concurrences and The George Washington University Law School’s Competition Law Center.

The survey report is available on the GVH’s website in English:

https://www.gvh.hu/pfile/file?path=/en/gvh/Conference/icn-2021-annual-conference/sustainability_survey_REPORT_3rdEd_2021_09_30_final_PUBLIC.pdf1&inline=true

In addition to the above, the GVH has noticed in several markets that promoting products using claims that indicate the environmentally friendly and sustainable nature of products, services or the operation of undertakings is becoming a more and more prevalent practice.

As a consequence, in December 2020, the GVH published its so-called “Green Marketing” guidance which aims to assist undertakings in developing appropriate advertising practices regarding the environmentally friendly and sustainable nature of their products and services and to outline possible assessment criteria for the evaluation of misleading commercial practices and comparative advertising under the Hungarian competition laws. The guide summarises the criteria to be kept in mind when designing advertisements: it discusses – among others – the requirements for providing proof of certain typical green claims (e.g. “recyclable”, “bio”, “organic” or “biodegradable”) and the legal framework of using certification marks.

The guidance is available on the GVH’s website in English:

https://www.gvh.hu/pfile/file?path=/en/gvh/Conference/icn-2021-annual-conference/sustainability_survey_REPORT_3rdEd_2021_09_30_final_PUBLIC.pdf1&inline=true

Please see our response to "Has your Authority issued any guidance on the role, if any, of ESG in the competition law analysis applied to mergers or other conduct?"

There is no guidance system developed by authorities in Hungary in connection with proposed ESG initiatives.

Outside of the area of competition law, the Budapest Stock Exchange (“BSE”) issued a guide for the companies listed on the BSE to help them harmonize their ESG reports with the Taxonomy Regulation applicable for financial market participants and “large companies which are public-interest entities” according to Act C of 2000 on Accounting and therefore are obliged to publish non-financial statements.

The guidance is available on the BSE’s website in English:

https://bse.hu/Issuers/corporate-governance-recommendations/bse-esg-/esg-guide

There is no regulated, official method of calculation or quantification of the ESG effects currently in force in the Hungarian jurisdiction. The voluntary use of international standards (GRI, SASB) is popular among reporters.

Not applicable.

In a sustainability-related Hungarian competition case no. Vj/43/2015, in its decision rendered in April 2019, the GVH established that the former producers of Energizer, Duracell and Varta batteries had been engaged in conduct that infringed competition law for a period of 10 years when they coordinated their practices in order to pass the waste management fees of their portable batteries and accumulators onto their customers. The GVH imposed fines of more than HUF 30 million (cca EUR 90,000) on the producers after taking into account their active cooperation during the investigation. In connection with their agreement, the producers referred to sustainability as an environmental protection element, that is, they claimed that their activities aimed exclusively at the realization of environmental protection goals. However, the producers neither explained this reason in detail; nor specified it in any way. As a result, this argument was not specific enough for the GVH to evaluate it on its merits.

There is no specific regulation in Hungary according to which private or class actions can be brought in connection with antitrust cases or ESG litigation.

However, there is a special procedural rule regarding class action in the Hungarian Code of Civil Procedure (the “CCP”). According to the CCP, at least 10 people are allowed to initiate a class action together in the following cases:

1. for the purpose of enforcement of claims arising in connection with consumer contracts (according to the legal literature, claims arising from the competition law infringements mentioned below also fall into this category);
2. in labor disputes; or
3. for the enforcement of claims or damages stemming from health impairment resulting directly from unforeseeable environmental pollution caused by human activities or arising as a consequence of negligence.

Private actions for compensation for damage can be brought against infringers in the case of the following competition infringements:

• unfair competition
• agreements restricting economic competition
• abuse of dominant position.

It is, however, necessary to mention that initiating class action is not common in Hungary.