Following an unsuccessful attempt in April 2024, the Hungarian legislator introduced the concept of "undertakings with paramount significance" into Hungarian competition law – this time for real.
What is this new concept?
Under the new rules, the Hungarian Competition Authority (HCA) received substantially expanded powers, including the ability to impose obligations on companies without having to establish a competition law infringement or even to prove dominance.
The idea of regulating companies with significant market power, especially where such power may harm competition, is not new in Europe. According to the bill's explanatory memorandum, the Hungarian legislator drew inspiration from German and UK competition rules.
How will the new tool work?
If, during an accelerated sectoral investigation the HCA identifies a company with paramount significance and finds that competition in that sector is likely to be seriously and persistently restricted or distorted, the authority launches a separate proceeding.
In this separate proceeding, the HCA may decide that the company qualifies as an undertaking of "paramount significance across markets." Notably, this designation may be made even without finding any infringement of competition law, e.g. a cartel or an abuse of dominance. Once designated, the company can face a range of behavioural or even structural corrective measures imposed in the same proceeding.
The legislator argues that these new powers are needed to allow rapid intervention where traditional tools, such as abuse of dominance or antitrust rules, are too slow or ill-suited. Examples include unique market structures, unilateral buyer power, barriers to entry or exit, and vertical foreclosure.
The April 2024 proposal sent shockwaves to the market and was withdrawn following widespread stakeholder criticism; the current version marks the legislator's second attempt.
A narrower but still powerful proposal
Compared to the 2024 bill, the new version defines "undertakings of paramount significance" more narrowly. It will only apply to accelerated sectoral investigations in one sector, namely in the mineral mining and construction industries. However, it is reasonable to expect that, after a trial period, the scope could be extended to additional strategic sectors.
To determine whether a company has such "paramount significance", the HCA may examine factors such as
- market share,
- financial strength and access to resources,
- vertical integration and activities in related markets,
- access to data relevant for competition.
The list is non-exhaustive, granting the HCA broad discretion, particularly regarding criteria such as "fundamental importance of the undertaking's goods from the perspective of consumers or the economy as a whole", as well as the "importance of the undertaking's activities for the purchasing and sales opportunities of consumers or third parties." In the course of the assessment, the HCA is also required to request the opinion of the Supervisory Authority for Regulated Activities regarding the above considerations.
The bill defines a time frame of significant and continuous distortion or restriction of competition, namely if it existed continuously for two years, or recurred within three years preceding the initiation of the accelerated sectoral inquiry.
What measures could the HCA impose?
If the HCA concludes that an undertaking with paramount significance contributes to a significant and continuous distortion of competition, it may impose behavioural or structural obligations, subject to the principle of proportionality.
Possible measures include
- information and transparency obligations,
- duties to make certain offerings available to competitors and
- bans on favouring the undertaking's own offerings over those of its business partners.
In the most severe cases, where behavioural remedies are impossible or disproportionately burdensome, the HCA may even force the company's owners to sell shares or divest assets, in whole or in part.
Although the affected companies will have legal possibilities to challenge the decision of the HCA before courts, but the appeal will not have automatic suspending effect.
Our views
The new amendment represents a notable improvement over the withdrawn 2024 draft bill, offering clearer definitions and stronger legal safeguards. For example, the revised proposal no longer includes structural measures aimed at "maintaining security of supply", and its scope is limited to a narrower, specifically defined set of industries.
However, the proposal still falls short of the safeguards provided under German law, e.g. a buy-back option in the event of an obligation to sell, a minimum sale price, restrictions on obliging the disposal of an asset previously purchased with competition-authority approval, etc.
Important questions remain to which answers and guarantees should, in our view, be regulated in a statute due to the significant interference in the rights of the undertakings.
When will the new rules take effect?
The legislative proposal was published on the Parliament's website on 8 December 2025 and the final vote already took place on 10 December, with the law entering into force on the third day following its publication in the Official Journal.
Undertakings should monitor closely the implementation of the new rules as we expect that the scope may also be extended also to additional strategic sectors in the future.
By Anna Turi, Counsel, and Mark Kovacs, Attorney at Law, Schoenherr
