Proposed Legislation Threatening "Essential Enterprises" to Be Withdrawn
A bill that could compel companies classified as "of essential significance" to sell, if their activities were deemed by the authority to distort market balance, is expected to be retracted.
This legislation had stipulated that the Hungarian Competition Authority (GVH) could force the owners of such enterprises to divest their property or shares, suspend related voting rights, appoint new management, or transfer their assets for operation by a designated provider at a cost-based fee, effectively allowing for expropriation.
The proposal, formally submitted by ruling party members of the Legislative Committee of the National Assembly (TAB) for Thursday's session, albeit unlikely without government support, was preliminarily signaled by hvg.hu, based on information from Válasz Online prior to the proposal's publication. The amendment, part of a larger bill on modifying justice-related laws set for a vote next week in the National Assembly, aimed to introduce the concept of "businesses of essential significance." Such measures, according to the GVH, would contribute "to effective legal practice, successful task fulfillment, and ultimately, to fair market competition and the protection of Hungarian consumers."
Justification provided by Justice Minister Bence Tuzson highlighted scenarios where a business, leveraging its market power, could tip the market balance in its favor. In these instances, intervention was deemed necessary "to maintain the existing level of competition and prevent market distortion."
The amendment presented to the TAB proposed the deletion of this entire section from the law. While the government and the GVH offered detailed explanations for the original provisions, the TAB's ruling party members 27 of the 41, whose specific contributions to such proposals often remain unidentified did not elaborate on their reasoning. The explanation for the decision to remove the contentious sections merely stated: "With this amendment, provisions relating to business of essential significance will be omitted from the proposal."
If the TAB approves this amendment on Thursday a likelihood unless it turns out the government does not support it the law is expected to be adopted in next week's plenary session without this controversial part.