Accelerated sector inquiries aimed at reducing single-bid public procurements in Hungary

During the conditionality procedure, the EC identified several systemic problems in the functioning of the Hungarian public procurement system, notably the high proportion of single-bid procurements and the low level of competitive intensity. In response, Hungary undertook to adopt a comprehensive action plan by 31 March 2023 to strengthen competition in public procurement. As part of the action plan, the Government requested the President of the HCA to conduct sector inquiries in three public procurement markets, where the prevalence of single-bid procedures particularly warranted intervention.

Pursuant to this request, the HCA initiated accelerated sector inquiries on the domestic public procurement markets for imaging diagnostic equipment, passenger vehicles and commercial vehicles, as well as mosquito control services.

The role and characteristics of the accelerated sector inquiry

The initiation of an accelerated sector inquiry in Hungary is subject to two conditions. First, based on the specific characteristics, combined unique features or structural framework of a given sector, it must be reasonably assumed that competition in a market within that sector is distorted or restricted. Furthermore, the identification and handling of these market problems must require urgent intervention.

The HCA must prepare the draft report within one month (which may be extended twice). By contrast, in a traditional sector inquiry, the preparation of the draft report may take more than one year. Due to the urgent nature of accelerated sector inquiries, undertakings operating in the affected sector are granted only an eight-day period to submit comments on the draft report prepared by the HCA, as opposed to the 30-day period applicable in traditional sector inquiries.

Furthermore, in accelerated sector inquiries the HCA may, subject to prior judicial authorisation, conduct dawn raids, similarly to cartel cases.

The authority's findings in the examined public procurement markets

Imaging diagnostic equipment

The HCA launched its first accelerated sector inquiry concerning the domestic public procurement market for imaging diagnostic equipment in September 2024 and published the final sector inquiry report in March 2025.
The inquiry found that public contracting authorities exhibit strong brand loyalty in procurement procedures, coupled with significant caution toward technological change. In the HCA's view, these factors alone are capable of restricting competition among suppliers. The report also pointed out that bundled procurements covering multiple product and service categories may impose disproportionate administrative and business burdens on specialised market players, thereby discouraging their participation in public procurement procedures.

In order to stimulate competition, the HCA proposed, among other measures, the broader use of partial bidding, more substantive application of preliminary market consultations, and the stronger integration of professional (in particular medical) considerations in the preparation of public procurement procedures.

Passenger and commercial vehicles

The HCA launched the second accelerated sector inquiry related to public procurements in March 2025, namely in the domestic public procurement market for passenger vehicles and commercial vehicles. The final sector inquiry report was published in June 2025.

According to the HCA's findings, disruptions in global supply chains – particularly those following the COVID-19 pandemic – contributed significantly to the decrease in the number of bids submitted during the 2020 to 2024 period. The report also highlighted that, for structural reasons, many potential bidders deliberately stay out of the public procurement market, primarily due to strong demand in the private sector and the administrative burdens associated with public procurement procedures.

The HCA's recommendations include the separate procurement of different vehicle categories or the provision of partial bidding opportunities, the application of more flexible delivery conditions and the proportionate design of penalty systems. The report also emphasised the importance of targeted training related to public procurement procedures in encouraging market participation.

Mosquito control services

The HCA launched the third accelerated sector inquiry in the domestic public procurement market for mosquito control services on 7 October 2025. The final sector inquiry report was published on 23 December 2025.

The inquiry established that mosquito control constitutes a distinct, specialised market characterised by high barriers to entry and participation, as well as strong regional segmentation. Although the proportion of single-bid procurements has decreased across environmental management services as a whole, the number of bidders in the mosquito control market has remained low.

Competition is further restricted by the increasing use of environmentally friendly, biological control methods, as only a limited number of service providers currently possess the necessary equipment and professional expertise to apply these techniques. According to the HCA, strengthening competition cannot be achieved solely through amendments to procedural rules; targeted policy, technological and training support is also necessary, particularly to facilitate market entry for micro- and small-sized enterprises.

Dawn raids and competition supervision risks

In two of these three accelerated sector inquiries, the HCA conducted dawn raids and thereby obtained data and information about market participants. Such information may later also be used in separate formal (competition supervisory) proceedings. While a sector inquiry cannot lead to the imposition of a fine, a competition supervisory proceeding may result in a substantial fine. For this reason, it is particularly important for market participants to be aware of their rights and obligations during sector inquiries.

Outlook 

The main conclusion of these three inquiries is that, in many cases, single-bid public procurements do not result from classic competition law infringements, but rather arise from structural, technological and institutional factors. Accordingly, the HCA's reports primarily aim to refine public procurement practices and encourage greater market participation. The reports do not indicate that the HCA will initiate a formal proceeding in the near future as a result of these sector inquiries.

At the same time, the HCA launches several accelerated and non-accelerated sector inquiries each year, which may later result in the initiation of competition supervision proceedings against some or even all market participants involved. Moreover, a recent legislative amendment has introduced a new tool for the HCA: if, during an accelerated sector inquiry, the HCA finds that an undertaking or group of undertakings operating in construction or in the mining of solid mineral raw materials has cross-market significance, and that competition may consequently be significantly and continuously distorted or restricted, the HCA will initiate a formal proceeding. In it, the HCA may decide to classify the undertaking as an "undertaking with cross-market significance", which, once established, may subject the undertaking to various behavioural or even structural obligations, even in the absence of a competition law infringement.

authors: Anna Turi, Tamás Vetró