The latest amendment to the Hungarian Competition Act (defined below) introduces a new tool enabling the Hungarian Competition Authority (HCA) to intervene in the construction and mining sectors, even in the absence of any competition law infringement. If the HCA identifies, during a prior accelerated sectoral investigation, undertakings of paramount significance for competition across markets and determines that competition is likely to be significantly and continuously restricted or distorted as a result, the HCA may impose behavioral or structural obligations on these construction and mining undertakings.
In depth
The amendment to Act LVII of 1996 on the Prohibition of Unfair Market Practices and Restrictions of Competition (“Competition Act”), which entered into force on 19 December 2025, provides the HCA with a new type of regulatory intervention tool. This new instrument enables the HCA to initiate a competition law investigation and intervene in the market conduct of undertakings engaged in the construction sector or in the extraction of solid mineral raw materials.
The HCA may use the new intervention tool if it has carried out an accelerated sectoral investigation concerning the construction or mining sector and, based on the findings of that investigation, concludes that certain undertakings qualify as Undertakings of Paramount Significance for Competition Across Markets (UPSCAM) and as a result of these UPSCAM undertakings, competition may be significantly and continuously distorted or restricted.
The HCA has three months to complete the procedure, which may be extended by an additional two months. Requests for information (RFIs) stop the clock, as the time from their issuance by the HCA until these RFIs are responded to does not count toward the statutory deadline. This is relevant because if the HCA orders an investigation, it must simultaneously request the opinion of the Supervisory Authority for Regulated Activities (SARA) on the conditions for classifying undertakings as having cross-market significance. The SARA has 60 days to issue its opinion, which is binding on the HCA.
Who qualifies as an UPSCAM?
The new tool is limited to the construction and mining sectors and is conditional on the HCA having conducted a prior accelerated sectoral investigation in those sectors. During the classification of undertakings as an UPSCAM, the HCA may, in particular, consider the following factors:
- The undertaking’s market share, financial strength or access to other resources, vertical integration and activities in related markets, and access to data relevant for competition
- The fundamental importance of the services provided or the goods produced or distributed by the undertaking for consumers or for the economy as a whole
- The significance of the undertaking’s activities in terms of third parties’ or consumers’ access to procurement and sales markets and, in this context, the influence exerted by the undertaking on the business activities of third parties
The HCA may establish that competition is significantly and continuously distorted or restricted in either of the following circumstances:
- The distortion or restriction of competition has persisted continuously for at least two years prior to the initiation of the accelerated sectoral investigation; or
- The distortion or restriction of competition has repeatedly occurred within three years prior to the initiation of the accelerated sectoral investigation.
How can the HCA intervene in the conduct of UPSCAMs?
If all of the above conditions are met, the HCA may initiate the procedure to apply the new tool against construction or mining companies. At the end of the procedure, without establishing the existence of an infringement, the HCA determines that the undertaking qualifies as an UPSCAM and that its conduct contributes to a significant and continuous distortion or restriction of competition. The HCA may impose proportionate behavioral or structural measures necessary to eliminate such a distortion or restriction of competition.
The HCA may impose the following obligations:
- Prohibit the UPSCAM from treating its own offers more favorably than those of its business partners.
- Require the UPSCAM to provide information on the performance and quality of the services it offers to its business partners.
- Require the UPSCAM to make its own offer accessible to other undertakings.
- Require the owners of the UPSCAM to sell part or all of their shareholding, or require the UPSCAM to dispose of part or all of its assets, if the measures set out in the previous points are not feasible, not effective or would impose a disproportionately greater burden on the UPSCAM.
Background and foreign models
The current adoption of the new tool is not the first time that the need for a tool targeting UPSCAMs has arisen. A legislative proposal from early 2024 would have introduced a similar tool with largely comparable conditions and intervention powers, although without being limited to the construction and mining sectors. That proposal was ultimately not adopted. The legislator was inspired by foreign models in both cases and explicitly refers to similar tools available in Germany and the UK.
Outlook
Although the HCA has not yet announced that it will launch an accelerated sectoral investigation in the construction or mining sectors, it has shown increased interest in the construction industry. In parallel with the introduction of the new tool, 10 cartel proceedings related to the construction sector are pending before the HCA, typically concerning market-sharing practices, including the allocation of winning bidders in public procurement and private tenders, as well as price-fixing conduct.
With the new year, the HCA may start to explore the construction and mining sectors more closely.
By Marton Horanyi, Partner, and Andras M. Horvath, Counsel, and Andor Cserep, Associate, Baker McKenzie
