Hungary: Hungarian Competition Office amends notice on the imposition of fines in consumer protection cases

The most recent amendment of the Hungarian Competition Office’s (“HCO”) notice on the practice of imposing fines in consumer protection cases (“Notice”) entered into force on 1 October 2015. The amendment (“Amendment”) is aimed at encouraging businesses to take active steps to ensure compliance with applicable legal regulations.

According to the Amendment, the HCO may consider the substantive and properly justified compliance efforts made by a company under investigation as a fine mitigating factor. However, the sole existence of a compliance program will not suffice; companies will have to demonstrate the actual and significant efforts they have taken towards compliance.

In order to prove that substantive compliance effort measures have indeed been taken, the company must demonstrate that it approached an independent external body (e.g. a professional, self-regulating body) or person (e.g. an attorney-at-law) with the specific intent to ensure compliance prior to the publication of commercial communication under investigation. Further, the company shall also provide evidence that the opinion of the independent advisory body or advisor was taken into consideration in the preparations of the commercial practices.

Besides the above-detailed mitigating factor, when determining the initial amount of the fine the HCO (for fines not determined on the basis of the costs of the communication) will calculate 5% of the turnover generated from the sale of goods affected by the infringement and related to the infringing commercial practice. This initial amount will then be subject to further considerations before determining the exact amount of the fine to be imposed.

Apart from the above, the Amendment left the basic principles of the Notice unchanged. As with all of the HCO’ notices, this Notice is not legally binding and only serves as guidance to the HCO. The Notice only applies to cases where the HCO’s preliminary standpoints are sent to companies under investigation after 1st October 2015.

Promoting competition law compliance is one of the main goals and responsibilities of the HCO. In the HCO’s view, recent events have highlighted that compliance programs alone may be incapable of preventing serious infringements if the programs are not paired with substantive compliance efforts integrated into corporate decision making. By the Amendment, the HCO further incentivises market players to focus on and invest in compliance, with the benefit that such efforts may be “returned” in case of an eventual infringement.

If you would like more information on the Amendment, which was enacted as notice no. 2/2015, please contact Dóra Petrányi or Nóra Jekkel.

Notice no. 2/2015 of the President of the Hungarian Competition Authority and the President of the Competition Council on the practice of imposing fines in consumer protection cases