szilÁgyi pÁl: private enforcement of competition law and stand-alone actions in hungary. global...

Private Enforcementof Competition Lawand Stand-aloneActions in HungaryDr Pál Szilágyi*

IntroductionOn the day of completing the present article, the EuropeanCommission submitted its proposed directive on privateenforcement in the European Union.1 Based on theexperience gathered in Hungary this was a timely andneeded action. Here I evaluate the accessible case law onthe private enforcement of Hungarian and EU competition(antitrust) rules in Hungary.2 The research focusedmainlyon cases where the Hungarian competition authority wasnot involved in any form.3Due to the improvement of thejudicial administration, as of 2007 a collection of allHungarian judgments is available online in Hungarian.4

Accessing cases prior to that period is very difficult, sincethere is no publicly available register of those cases. TheCuria, the highest court in Hungary publishes a collectionof cases each month, but those cases are only summariesof the cases and are selective. Therefore, the assessmentpresented below includes a full analysis of all cases after2007 until 2012, but we also refer to cases dating backprior to that period if those cases are in the public domain.No cases are discussed which constitute appeals todecisions of the competition authority, the GazdaságiVersenyhivatal (GVH).As to the state of Hungarian private enforcement, we

have to note that before the 1st of November 2005 it wasnot clear whether it was possible to initiate stand-aloneactions based on arts 11 and 21 of the HungarianCompetition Act (HCA).5 The courts interpreted the lawin a way prevented the direct application of thecompetition rules by the courts. Someauthors—correctly—disputed this interpretation since thefirst judgement rendered on that note, but nevertheless,this approach was retained by the courts.6

Due to the reluctance of the courts to deal with privateactions for the infringement of competition provisions,the law was amended in November 2005 and since thenthe HCA directly and undisputedly allows for stand-aloneprivate actions before the courts. Article 88/A states that:

“The power of the Hungarian CompetitionAuthorityto proceed, […], shall not prevent civil law claims,arising out of the infringement of the provisions laiddown in Chapters III to V of this Act [on consumerdeception, anticompetitive agreements and abuse ofa dominant position] […] from being enforceddirectly in court.”

Moreover, art.88/B of the HCA provides that: “Forlawsuits to be assessed under the provisions laid down[e.g. for anticompetitive agreements and abuse of adominant position], the provisions of Act III of 1952 onthe Code of Civil Procedures shall be applied with theexceptions defined in this Chapter.”In Hungary there has already been a thorough review

of private enforcement up to 2009.7 Since that report somenew cases have become accessible, therefore, we willfirst analyse the national legal framework and thenproceed to evaluate the cases. Lastly, we will draw someconclusions.

National frameworkHungarian law allows for the possibility of bothstand-alone and follow-on private actions for damagesand there are also other remedies available. Hungarianlaw distinguishes between damages caused by breach ofcontract and damages caused outside of contractualrelations, but the rules are basically the same for bothtypes.

LitigationThe costs of litigation are covered by the unsuccessfulparty and the parties are free to agree on the level of legalfees. As a general rule, the plaintiff must pay a fee forinitiating any procedure before the court. This fee is basedon the value of the claim and is 6 per cent with minimumand maximum limitations. Following the judgement, theunsuccessful party has to cover all costs, includingadministrative, court and legal fees. However, if the courtfinds the legal fees to be unreasonable, it may reduce the

*Director of the Competition Law Research Centre—PPCU, Budapest, H-1088, Hungary; [email protected], +36203666290). I would like to express mygratitude to Barry J. Rodger, Tihamér Tóth and Petra Láncos. Usual disclaimer applies. The original research for this article was carried out under the following project:Comparative Private Enforcement and Consumer Redress in the European Union (http://www.clcpecreu.co.uk). The update of the report was published under the projectTÁMOP-4.2.1.B-11/2/KMR-2011-0002 - Development of Scientific Research at PPCU.1Proposal for a Directive of the European Parliament and of the Council on certain rules governing actions for damages under national law for infringements of the competitionlaw provisions of the Member States and of the European Union COM(2013) 404 final.2The executive national report and the table of cases underlying this article are available here: http://www.clcpecreu.co.uk/default.htm [Accessed July 11, 2013].3 In Hungary, according to the public register, the GVH has not yet acted as amicus curiae in stand-alone cases and according to publicly available information there wasonly one—not yet reported—real follow-on private enforcement case. There was one case where the GVH intervened but the higher courts found that it had no right to doso.4 See: http://birosag.hu/ugyfelkapcsolati-portal/anonim-hatarozatok-tara [Accessed July 11, 2013].5Act No. LVII. of 1996 on the Prohibition of Unfair and Restrictive Market Practices (HCA).6 See e.g. Gábor Fejes, “Versenyjogi jogsértés - polgári jogi szankció: érvénytelenség, teljesítésre kötelezés és kártérítés versenyjogi alapon” in Boytha Györgyné (ed.),Versenyjogi jogsértések esetén érvényesítheto magánjogi igények (HVG-ORAC, 2009), p.51. Or Tamás Éless and Ágnes Németh,Hungary, National Report (Ashurst Studyon the conditions of claims for damages in case of infringement of EC competition rules, 2004) p.2.7Boytha Györgyné, (ed.) A versenyjogi jogsértések esetén érvényesítheto magánjogi igények (HVG-ORAC, 2009). See also Éless and Németh; and Csongor István Nagy,The Judicial Application of Competition Law in Hungary (2010).

136 Global Competition Litigation Review

[2013] G.C.L.R., Issue 3 © 2013 Thomson Reuters (Professional) UK Limited and Contributors

amount. A special government decree is applicable forthe calculation of legal fees if there is no agreement onthe fee between the lawyer and the client. The decree hasdetailed rules on the amount of legal fees. In Hungarythere are no contingency fees in a way that it is appliedin the United States for example (no win no fee).Sometimes law firms agree that in case the party winsthey will receive higher fees, but due to the legalregulations in force (see above) this approach is notfavoured. There is no special prohibition on theapplication of such a fee, but since the party who losesthe case has to pay the legal fees of both parties, none ofthe parties is interested in such a solution. Even if thiswere the case, because the courts may reduce—based ona regulation—the legal fees by a significant amount, thelawyers aren’t interested in such a solution either.

CourtsCompetition cases which do not concern an administrativedecision brought by the GVH are dealt with by the generalcourts.8 The highest court in Hungary is the Curia,formerly known as the Supreme Court. The structure ofthe Hungarian court system is as follows: local courts(131), tribunals (19+1), High Courts (5) and the Curia.9

There are no special mechanisms in place for follow-onrulings.In the court system, the civil courts deal with private

enforcement claims, except for one type of case. It ispossible in a criminal procedure to claim damages. In thiscase the criminal court can rule on damages or decidethat a separate civil procedure shall deal with such claim.If an action involves damages, the amount of damagessought determines which court will be competent toadjudicate it. If the value of the claim is below HUF30million, local courts shall be seized by the case, and abovethat amount, the tribunals shall proceed. Appeals arepossible to higher level courts.

Burden of proof and discoveryThe plaintiff bears the burden of proof before the courts:the party bearing the burden of proof must producedocuments supporting its claims and arguments.10Article164 (1) of the CCP states that “[o]n general principle thefacts based on which the case can be decided shall beadduced by the party bearing a vested interest inpersuading the court to recognize them as true.” Thereare no rules related to discovery procedures in competitionproceedings. In Hungary courts may take evidence exofficio only if it is expressly allowed by an act and thisis not the case in competition law cases. There are somespecial rules whichmight be of assistance to the plaintiffs.For example a person in possession of documents may

be summoned as a witness to produce the documents; orthe court may oblige the parties to produce deeds in theirpossession. The general rule is that one of the parties hasto request the taking of evidence. Both parties have anobligation to present appropriate evidence in a timely andproper manner. The court is free to decide on takingevidence, at the same time, it must explain its reasons inthe judgment.

Types of remedies availableUntil an amendment of the HCA in 2005, the act onlyreferred to nullity as an available remedy. As of today,however, the plaintiff can seek the following remedies:

• recovery of loss suffered (compensatorydamages);

• in integrum restitutio;• interim measures;• seize and desist;• declaration;• modifications of contractual relations by

the court.

A special rule in the HCA is s.88/C, which states:

“In the course of civil proceedings for any claimconducted against a party to a restrictive agreementbetween competitors aimed at directly or indirectlyfixing selling prices, sharing markets or settingproduction or sales quotas that infringes Article 11of this Act or Article [101 TFEU], when proving theextent of the influence that the infringementexercised on the price applied by the infringer, itshall be presumed, unless the opposite is proved,that the infringement influenced the price to anextent of ten per cent.”11

Although there is a commonmisunderstanding inHungarythat this rule is a presumption on damages, the rule mightbe beneficial for those who suffered damages. Thepresumption however does not solve the burden ofproving causation and the actual amount of damages,which has to be substantiated by the plaintiff.12 The factthat this provision has not yet been applied in any publiclyavailable case is a clear sign that this amendment has notlived up to expectations. One reason might be simply thatthe presumption on price increase does not resolve themost difficult hurdles for those who would seek to provean antitrust case.

StandingThere are no special rules on standing. The general ruleaccording to the CCP art.48 is that “[a]ny person who isable to accrue rights and obligations under the rules of

8Appeals from the GVH are to be made to the Metropolitan Court.9Currently there is an ongoing reform of the judicial system. The reform will most probably have an effect on the court which deals with appeals from the GVH.10Act III of 1952 on the Code of Civil Procedure (III 1952) art.190 (1).11 For a more detailed assessment of the presumption of price increase see: Csongor István Nagy, “The new Hungarian rules on damages caused by horizontal hardcorecartels: presumed price increase and limited protection for whistleblowers — an analytical introduction” 32 E.C.L.R. 63.12To date (November 9, 2012) there is no judgment available in the public register on this provision of the HCA.

137


civil procedure is considered to have the capacity to bea party in legal proceedings (legal capacity).” Article 49(1) states that

“[a]ny person having full legal competency underthe rules of civil procedure may be a party in legalproceedings acting personally or by way of acounsel, or who has the right of disposition of thesubject matter of the action under the rules of civilprocedure (competency in legal proceedings).”

A plaintiff can only enforce claims if s(he) has standing.A plaintiff has standing if his/her rights or interests areaffected by the legal dispute. Parties involved in anagreement have standing as well as those who suffereddamages. Third parties also have standing if they candemonstrate sufficient interest in the case. There is specialprovision in relation to Hungarian private enforcementin cases where a criminal procedure is ongoing beforethe courts and the party who suffered damages requeststhe criminal court to decide on the damages. As notedabove, the GVHmight have standing to enforce consumerclaims and also indirect purchasers have standing.13 Incertain cases the GVH can act as amicus curiae (seebelow, art.88/B (3)).14

Obligatory involvement of the GVHThe Hungarian Parliament adopted many positiveinitiatives in order to promote private enforcement. Forexample, the Hungarian Competition Act includes aprovision that creates a rebuttable presumption that acartel increases the price of products by 10 per cent.However, more recently there was a remarkable

decision rendered by the Curia. The HCA states that, ifthere is a claim relating to anticompetitive agreements orabuse of a dominant position before any court in Hungary,the court shall notify the GVH without delay. The GVHmay initiate an investigation and the court has to stay itsproceeding and await the outcome of the investigationand the final decision in the case. This final decision onthe existence or absence of an infringement is binding onthe court, as discussed below. The relevant article15 of theHCA reads as follows:

(2) “The court shall notify, without delay, theHungarian Competition Authority oflawsuits before it, which are to be assessedunder the provisions laid down in ChaptersIII to V of this Act.”

Most practitioners and academics in Hungary werepreviously of the view that the final decision of the GVHon an infringement subsequently binds all the courts, evenif the procedure of the authority was not initiated because

of the court’s notification based on the above citedprovision of the HCA. The judgment of the Curia,16

however, clarified that the decision of the authority wasonly binding if the court had to stay its proceedings andawait the final decision of the GVH in that particular case.The judgment clearly correctly reflects the grammaticalinterpretation of the wording of the Act, but the rulingmay have an unintended effect on follow-on privateenforcement claims. This basically means thatinfringement decisions of the GVH, even if final, are notbinding in any other case on the courts.17

The personal opinion of the author is that this judgmentis not beneficial for private enforcement. If a particularplaintiff has to factor in the possibility that the GVH willtake over the case—he has the right to do so—and thedecision of the GVH might be appealed and hence hisclaim will only be decided upon in 6 to10 years at theearliest, then that might be quite discouraging. On theother hand, those defendants who would like to use thesection contained in the act as a defence, can alsosuccessfully prolong the procedure, since the undertakingonly has to make a plausible case to invoke the HCA uponwhich the court will stay the proceedings to await a (final)decision of the GVH.

Case-lawAfter 2007 until 2012 there have been 16 such cases.Except for two cases all the cases invoked the nationalequivalents of arts 101 and/or 102 TFEU.18 Below wewill give a short overview of all the available cases anddiscuss the conclusions afterwards.

X. v Y and Others (14.Gf.40.521/2011/9.)A municipality concluded an agreement with anundertaking (the plaintiff) for the financing of a project.It later turned out that a bid-rigging took place in relationto the project and the GVH adopted a decisioncondemning the members of the cartel (the defendants inthe case) for concerted practices. The plaintiff sued thedefendants before the Metropolitan Court for damages.The plaintiff was unsuccessful before the court of firstinstance, however, the case was not decided on its merits.The Metropolitan Court ruled that the plaintiff had nostanding, since it was only an intermediary in thefinancing of the project and the damages caused by thecartel were not suffered by the plaintiff but themunicipality. The plaintiff appealed to the High Court ofBudapest which dismissed the appeal. The Curia howeverannulled the decision of the Metropolitan Court andordered a new procedure on the basis that the Appellanthad standing. The High Court of Budapest in the second

13There are no publicly available cases where indirect purchasers brought an antitrust case. See also: X., (Fovárosi Ítélotábla 2012). In this case the court dismissed theargument, but accepted in theory that it is possible for indirect purchasers to have standing.14There are several judgements available on the application of this provision, e.g. X. v Y. (14.G. 41095/2007/43.).15HCA art.88/B.16X. v Y. (Gfv.IX.30.152/2011/10.). See also X, (Fovárosi Bíróság, 2010).17This is of course not a unique approach in the European Union, since many Member States are on the same position or even adopt a more lenient approach. See e.g.European Commission, Commission Staff Working Document — Impact Assessment Report — Damages actions for breach of the EU antitrust rules (2013), para.41.18 In Hungary, the official register of the cases is anonymous, i.e. the names of the parties are left blank. We use X, Y and Others to refer to plaintiffs and defendants.



procedure however dismissed the case due to the lack ofdamages on the part of the plaintiff.19 The court alsobriefly noted that even if there was the theoreticalpossibility of damages, the plaintiff did not prove that itcould have achieved better prices on the market.

X. v Y. andOthers (14.Gf.40.088/2012/11)This case is part of a long procedure related to one of thelargest cartels in Hungary in which the GVH fined themembers of cartel.20 The plaintiff commissioned a publicprocurement procedure and as a result concluded acontract. It turned out later that a bid-rigging was involvedin the public procurement. In its judgement21 the HighCourt of Budapest dismissed the plaintiff’s claim fordamages, mainly based on the lack of standing. However,what is of relevance to our topic is that the court acceptedthat in theory it is possible for indirect purchasers to havestanding.

X. v Y. (Gfv.IX.30.152/2011/10)The plaintiff and the defendant concluded a distributorshipagreement which ended just before the accession ofHungary to the European Union. After the GVH initiateda competition supervision procedure, it suspended theinvestigation and gave the defendant of the present casetime to work out the conditions for allowing repairersinto its network. The plaintiff sued the defendant in 2007claiming damages based on art.11 of the HCA and art.101TFEU (art. 81 EC at the time). The court of first instancedismissed the case and the plaintiff appealed to the HighCourt of Budapest. The GVH intervened in the case atfirst instance as amicus curiae. The High Court ofBudapest dismissed the case22 based on the fact that theconduct of the defendant constituted unilateral conductand therefore art.11 of HCA was not applicable. In itsjudgement the Curia stated that the courts are in generalnot bound by the decisions of the GVH, save for caseswhere the legal dispute involves a decision which wasinitiated due to the proceedings before the court.

X. v Y. (Gf.II.30.441/2010/2)The dispute between the plaintiff and the defendantconcerned a dispute regarding the rent for an office ofthe local municipality rented by an insurance provider.In the course of the legal dispute the defendant invokedamong others art.11 of the HCA. The court (High Courtof Szeged) decided the case based on another legal basis,therefore it did not rule on the competition issues raisedby the parties.

X. v Y. (Gfv.IX.30.246/2007/6)The dispute in this legal proceeding concerned adistribution and repair services agreement. The plaintiffwas selling trucks and provided repair services. Thedefendant did not prolong the agreement on repairservices and therefore the plaintiff sued him. One of thearguments raised in the application was that the defendanthad abused its dominant position. The court decided thatthe defendant was not in a dominant position and thereforecould not have abused such position, however. thereasoning of the court was quite short, limited to a fewsentences.

X. v Y. (25.G.40.031/2010/7)The case involved the procurement of legal services. Theplaintiff handed in an offer to the procurer (the defendant)but due to procedural issues his offer, according to thedefendant, was invalid. The defendant argued that theplaintiff should have sued another person according toart.11 (2) c) of the HCA. (The judgment does not mentionthat the plaintiff relied on this article in his claim.Nevertheless the defendant raised the argument and thecourt assessed it.) The court held that the provision onanticompetitive agreements in the HCA cannot beenforced by courts. The appellate court did not rule onthe question.

X. and Others v Y. and Z.(11.G.20.504/2006./18)One of the defendants (Z) was the sole importer of certaincars to Hungary. It concluded agreements with theplaintiffs for them to could sell new cars and spare parts.After a merger, the defendant was liquidated and in 2001and 2002 another defendant (Z) became the newHungarian importer of the cars and set up a newdistribution network. The plaintiffs sued for damages ofapproximately HUF1.1 billion. The plaintiffs argued thatthe agreement between the two defendants was contraryto art.11 of the HCA and furthermore constituted an abuseof dominant position according to art.21 of the HCA. Theaim of the defendants was to exclude the plaintiffs fromthe market. The court ruled that it had no competence toreview the claims based on arts 11 and 21 of the HCA.This judgement is one of the judgements, where the courtsexpressed their views that they cannot apply the articlesof the HCA regarding abuses of dominant positions andanticompetitive agreements. This problemwas solved bythe 2005 amendment of the HCA, although the majorityposition shared in academic literature is that prior to 2005it should have been possible to enforce the HCAprovisions.

19X. v Y and Others (14.Gf.40.521/2011/9).20Decision of the GVH VJ-27/2003/16. For a discussion of the case see Tihamér Tóth and Árpád Hargita, “God Forbid Bid-Riggers: Developments under the HungarianCompetition Act” (2005) 28 World Comp. 205.21X. v Y. and Others 14.Gf.40.088/2012/11.22X. v Y. Gfv.IX.30.152/2011/10.

139


X. v Y. (17.G. 41.386/2007/13)The legal dispute concerned a leasing agreement. Theagreement related to the lease of a truck. The agreementreferred to general terms and conditions which wereapplicable between the parties. Thelessor—defendant—terminated the contract due to defaulton payment by the plaintiff. The lessee—plaintiff—arguedthat some of the clauses of the general terms andconditions were null and void. One of the argumentsraised was that the disputed clauses were contrary toart.21 of the HCA, since the clauses resulted in anunjustified advantage to the defendant. The judge, afterciting art.21 a) of the HCA stated that in order to decideon the case she had to elaborate the content of thecontracts, but subsequently failed to raise any competitionissues. The judgment only considered other legal rulesand referred several times to the fact that the clauses werenot unfair.

X. v Y. (Gfv.IX.30.349/2008/4)The legal dispute in the case concerned an agreementwhere two companies had co-operated in a procurement,agreeing that if one of the companies should win, thenthe other would contract the unsuccessful party. Thisnever happened, but the company offered to pay half ofthe agreed value to the other party. The plaintiff sued thedefendant arguing that the agreement was null and void.The case reached the Curia in 2008 and one of thearguments in the reasoning of the court was that theagreement was contrary to art.11 of the HCA, since itwas anticompetitive by object. There was no furtherelaboration on the issue in the case.

X. v Y. (Gfv.X.30.494/2007/3.)The case concerned a claim regarding a decision betweentwo companies wishing to merge. The plaintiff asked thecourt to annul the decision of the legal predecessor of thedefendant by which it decided on the merger with thedefendant. The plaintiff argued inter alia that the decisionwas contrary to art.11 of the HCA.23 The courts at firstand second instance ruled that art.11 was not applicablein the case, since it was a merger between companiessubject to common decisive influence. The Curia did notdirectly deal with the issue, but upheld the judgement ofthe High Court of Szeged.

X. v Y. (15.G.40441/2006/26)The case concerned a legal dispute regarding the provisionof credit. The defendant was offering credit on the marketfor the purpose of buying cars. The defendant used acontract form which included general terms andconditions. The plaintiff asked the court to annul thecontract, since it was unfair. One of the arguments raisedhowever, was that the defendant had a dominant position,since it had a much stronger position than its consumers,

which were weaker the party in the contractualrelationship. The defendant argued that there was nodominant position and that the plaintiff hadmisinterpretedthe legal provision. The court did not deal with the legalarguments regarding the HCA and on appeal the issuewas not raised again.

X. v Y. (16.G.40.060/2007/43)This case concerned a legal dispute regarding a distantselling contract (telesales). The defendant entrusted theplaintiff to carry out telesales services. According to theplaintiff, the defendant did not pay for some of theservices in the sum of more than HUF20 million.Accordingly, the plaintiff terminated the contract. In thejudgement the court cited art.21 of the HCA. The courtrelying on art.88/B of the HCA submitted the relevantfacts to the GVH. The latter in its answers emphasisedthat in its view there was most probably no dominantposition on the market. This view was accepted by thecourt, which ruled in favour of the plaintiff, namely thatthere was no abuse of a dominant position. The highercourts didn’t deal with the issue during appeal.

X. v Y. and Other (Gf.I.30.146/2011/2)This case concerned an agreement between twodefendants and a plaintiff. The defendants providedfuneral services and also pursued related activities, suchas selling goods related to funerals. The agreementconcluded between the plaintiff and the first defendant(Y) also included a non-compete clause which stated thatfor ten years after the termination of the contract thedefendant could not carry out any similar activity. Thedefendants invoked art.11 of the HCA and argued thatthe contract was null and void, because it contravenedthat provision. The High Court of Szeged ruled that theprohibition of cartels cannot be used by parties to acontract to protect themselves from the other party. Thenullity of an agreement based on the cartel prohibitioncan only be invoked by a competitor, but not by thosewho are in a contractual relationship. The High Court ofSzeged also agreed with the lower court that a contractbetween a trustee and a principal cannot be treated as anagreement between independent undertakings.

X. v Y. (Gfv.IX.30.280/2011/4)The plaintiff and the defendant concluded a cooperationagreement in 2003. In 2008 the defendant wished to revisethe scope for cooperation, but the plaintiff did not agreewith the proposed solution. After a short period theplaintiff sued the defendant. The High Court of Budapestruled that the HCA act was applicable in the legal disputeand that at the time when the two parties concluded theagreement, the plaintiff was in a dominant position. Thedefendant could only rely on the plaintiff’s service tocarry out its activity. The cooperation agreement included

23They also argued some merger control related issues, e.g. that there was no notification to the GVH.



an exclusivity clause for seven years. The seven years forthe exclusivity was justified according to the court, dueto the fact that it was a manifestation of the state’s will(the company was state owned) and also due to theexisting cooperation agreement. The contract would onlybe void if there was no economic justification for it, butaccording to the court, this was not the case. Thedefendant contested the court’s judgement before theCuria. The defendant also argued that even though it alsoinvoked art.102 TFEU, neither of the courts dealt withthe applicability of the EU law provisions.The Curia sided with the defendant and ruled that the

behaviour of the plaintiff was objectively justified, sinceit would only be contrary to art.21 HCA if it wereimpossible to raise an economic justification for the factthat the conditions of the agreement could only beamended by an agreement and that there is no right toterminate the contract. The Curia also stressed that in anabuse case the standard is whether there is a reasonableeconomic justification for the behaviour or not. Accordingto the court, a contract which is in the interest of bothparties is always justified. The court also ruled that anexclusivity clause for seven years was not contrary to thecompetition provisions, since the long period was in theinterest of both parties.The Curia also dealt with the question whether art.102

TFEU was applicable or not. The Curia stated that, sincethere was no violation of art.21 of the HCA, there couldbe no violation of art.102 TFEU, since without an abuse,there could be no effect on the trade between memberstates.

X. v Y. (3.P.28.665/2005/82)This case concerned a trademark dispute. The defendantinvoked art.21 of the HCA, but the court decided the caseon other legal grounds and did not touch upon theapplication of the HCA.

X. v Y. (Gf.II.20.341/2010/6.)The case concerned a legal dispute between the ownersof a company. One of the parties on appeal invoked art.21of the HCA, but the High Court of Szeged ruled that thecase should be decided based on company law and notart.21 of the HCA.

Conclusions and final remarksAs described by Nagy in 2009, “private enforcement ishighly underdeveloped in Hungary; in this regard thereis no divergence between different industries.”24 Inprinciple there is nothing in Hungarian law which wouldprevent many more private actions, nevertheless thereality is that there are no cases are based on solidarguments rooted in competition law. In the cases

elaborated above, neither the parties, nor the courts wastedtime on arguments related to competition law. Evenwherethe parties claimed that there might be an infringement,the arguments were only substantiated to a limited extent,at the same time, the court did not waste ink on theassessment of arguments either. One could say that therewas not a single private action which had stood the chanceof succeeding. Based on the evaluated case law, thereasons for this are mainly rooted in the lack ofunderstanding of competition law and thereforecompetition issues are raised in cases lacking merit.25 Weonly looked at the final judgements in the present article,but many courts of first instance were clearly wrong asto the aims or the substance of the competition lawprovisions. Thus, when even themost important principlesof competition law are not understood or applied, howcould one expect from either the parties or the courts tofollow the very sophisticated case law of the EuropeanCourt of Justice and the General Court?Wemust howeverhighlight that the courts dealing with appeals against thedecisions of the GVH are following the case law of theECJ in their judgements and are more and more willingto undertake their own analysis in case the GVH’sdecision must be assessed. This is partly due to their 20+years of experience in reviewing GVH decisions,furthermore, the effects of theMenarini judgement26mayalso be observed in these cases.Although the number of cases is growing, there are

still only a few of them.Most of the cases discussed aboveare atypical competition cases. The typical situation wasthat one of the parties invoked the provisions of the HCAin order to add one more legal argument to the case. Theresult is that most of the references to the HCA had nomerit. It is also very interesting to see how peculiar someof the judgements are when it comes to the applicationof competition law.Most courts—even if there was somemerit in the argument -dealt with the competition lawissues in only a few sentences. The arguments werenowhere close to those we are used to in judgments ofthe UK Competition Appeal Tribunal or the US courts.In case of a follow-on actions, the courts have to decide

on the basis of a decision of the GVH. But in these casesthe courts have no prior assessment of the facts and thebehaviour investigated by the GVH. The reasoning in thejudgements regarding the provisions of the HCA areunsatisfactory from a legal point of view. On manyoccasions, the courts demonstratedminimal understandingof the aims of the competition provisions and referred tothe HCA in a way which would appear to contradict thetraditional interpretation of those provisions both undernational law and EU law.As regards EU law, we have to highlight that basically

the courts did not apply or consider the application of arts101 or 102 TFEU, although in cases where the trade

24Nagy, The Judicial Application of Competition Law in Hungary.25There are several other practical reasons for the lack of cases, namely that many serious infringements are settled before it comes to a judgement or because there are nolaw firms specialised on representing plaintiffs in competition cases.26A. Menarini Diagnostics Srl v Italy , 43509/08 European Court of Human Rights.

141


between member states is affected (as in many of thecases discussed), there would have been an obligation todo so.All of the above cases were decided in the last five

years. Taking into account that Hungary introduced itsfirst modern competition act in 199027 and therefore wehave 23 years of practice in applying the rules oncompetition, the situation of private enforcement is highlyunderdeveloped. Taking also into account the aims of the

draft directive of the European Commission, namely thatthere shall be more damages actions,28 it will not sufficeto create an appropriate legal framework.There is a lot to be done also regarding the promotion

of competition culture and the raising of awareness ofthose who suffer harm due to infringements ofcompetition rules. The climate has to change in order toincrease the cases of private enforcement.

27 See e.g. József Sárai, “Hungarian competition law — developments in the last decade and follow-up” [2007] Revue Lamy de la Concurrence.28 See also European Commission, Commission Staff Working Document (2013), para.200.



szilÁgyi pÁl: private enforcement of competition law and stand-alone actions in hungary. global...

Documents