Hungary: Easing administrative burden on companies filing for merger clearance?

22 July 2013 | newsletters

The Hungarian Competition Authority ("GVH") has amended the documents – including the merger filing form - related to merger control proceedings, with the declared aim of further decreasing the administrative burdens placed on market players.

The GVH aims to increase the scope of Phase I merger control proceedings (which results in a shorter deadline and lower filing fee) and to decrease the scope of the data to be submitted in merger control proceedings by simplifying and harmonizing the merger documents.
The amendments also support harmonization with EU laws and practices, as the European Commission has also initiated a simplification of the EU merger control procedures.

What changes will the amendments bring about in practice? 

• The most significant change with regards the Hungarian merger control documents is the increased scope of Phase I proceedings. For non-horizontal mergers (i.e. when a company acquires e.g. a non-competitor company to whom it has other ties, such as being vertically related), the threshold for applying the simplified (i.e. cheaper and shorter) Phase I proceeding has been raised from 25% to 30% combined market share. In practice, this means that if the combined market share of the merging undertakings is between 25% and 30%, the deadline by which the GVH must issue a ruling onthe concentration will be 45 days instead of 4 months and a filing fee of HUF 4 million (ca. EUR 13,500) will be applicable instead of HUF 16 million (ca. EUR 53,500). Moreover, the GVH has introduced the possibility of a Phase I proceeding even above 30% market share under certain circumstances. Nevertheless, the 20% market share threshold for horizontal mergers has not changed: if a market player with 15% market share on the relevant market acquires its competitor of 10% market share, this merger would continue to fall under the – longer and more costly - full procedure.

• The other changes are more of a fine-tuning of the merger control documents that had been issued in 2012 and involve inter alia the following:

- The removal of some questions from the merger control filing form, as well as the shortening of other questions (e.g. less data to be provided in order to assess the EU Commission’s jurisdiction), which will ease theburden on the companies participating in merger control proceedings;

- The amendment of the Best practice guidelines on preliminary consultations to emphasize that the GVH can provide preliminary guidelines and recommendations, but can only undertake an assessment on the merits in the formal merger control proceeding;

- The supplementation of the conditions of the application of a simplified decision - originally introduced last year - in the form of a notice. In a simplified decision, the GVH does not provide the reasons for its (clearance) decision when certain conditions are fulfilled. The advantage of this approach is generally faster decision-making by the GVH. This must be balanced by the interest of the parties involved to learn the reasons for the GVH’s decisions and to be able to ascertain the regulator's evolving legal practice.

 Harmonising the simplified and full proceedings (i.e. Phase I and Phase II) with the conditions of the short and full filing form. The GVH has amended the merger control filing form and its explanations with regards to the short filing form. Although the threshold under which parties can resort to a short filing form (i.e. not having to fill out sections VI and VII of the filing form with detailed market data) has now been raised in vertically related markets from 20% to 25%, the GVH has introduced an amendment under the umbrella of harmonisation of the two documents that is likely to make undertakings less happy. The reason is that there are constellations which would result in the having to fill out the full filing form now where a short filing form was sufficient earlier. 


The changes are generally to be welcomed, especially considering the fact that the GVH is now acting within just over a year after introducing these set of merger control documents. This step signals that the GVH aims to respond to the needs of stakeholders.
However, a more client-friendly and less formalistic application of the GVH's procedures would benefit market players even more. Market players would welcome if case handlers more regularly applied the rule of applicants not having to answer all questions on the filing form if specific questions are irrelevant; doing so saves companies from the further costs and time spent answering additional data requests for information not necessarily relevant for assessing the concentration.

The new filing form is to be used as of 1 August 2013, whereas most of the other changes have been applicable from the date of publishing (10 June 2013).