Competition Law Review – Putting the Consumer at the Centre?

In Central Europe, a major trend appears to be a growing focus on consumer protection matters.  This has been a long-standing area of work in Hungary - especially in the technology sector - but inflation in the past year has increased the focus on this topic, particularly since Hungary saw some of the highest inflation in Europe.  The Hungarian authority has been looking to increase fines in line with inflation, meaning that sanctions may now be as high as 13% of turnover, rather than the 10% that is the norm in most of Europe.  Understandably, lawyers felt that this would encourage far greater compliance.

Joining the Hungarians, lawyers in the Czech Republic and Poland have also been devoting much of their time to consumer protection matters as their respective authorities carry out investigations into the pricing of a range of consumer goods from food and medicine to pet food. 

In Poland, this focus on consumer protection has come as a result of a change in personnel at the top of the authority, with the new leadership appearing to be very active and several lawyers commented on the high number of dawn raids currently being carried out.  Poland has also implemented the ECN+ directive, so the authority is now able to look at questions of joint and several liability and is also planning to impose higher fines in future.

Slovakia has also seen a change at the top of its competition authority that seems to have injected new activity into an authority that was described by one lawyer as “hibernating” previously.  Lawyers are now hopeful of seeing a rise in high-profile cartel and abuse of dominance investigations, though were still concerned that the authority may not have enough employees to conduct large-scale dawn raids.

One change that Chambers and Partners has made to the rankings for this year is the introduction of a Lawyers Based Abroad table in Slovakia to reflect the number of lawyers based in Prague but frequently handling matters before the Slovakian authorities.  A similar table was introduced in Austria last year (predominantly containing lawyers based in Brussels).

Speaking of Austria, the major development there has been the raising of the threshold for mergers to be notified.  According to the lawyers we interviewed, this has led to a decrease in the number of merger filings of somewhere between 40-60%, though they did point out that this mostly affected the routine filings.  Lawyers in Hungary also mentioned that the threshold for merger filings had been increased there, again reducing the number of filings required.

It may be, however, that any decrease in the number of merger filings will be compensated by a rise in foreign direct investment filings.  The number of filings has certainly grown rapidly in the Czech Republic, with sources reporting that the number of filings had doubled in the past year.  Lawyers in Austria also felt that FDI would cover any reduction in work caused by fewer merger filings, though that was not a view shared across the rest of region.  Compared to most European authorities, the Polish authority appears to have a different definition of which jurisdictions are covered by the foreign direct investment regulations, meaning that only transactions involving a more limited number of jurisdictions need to file for FDI clearance and so reducing the number of overall filings.  Meanwhile the FDI regime is still new in both Slovakia and Slovenia, so while lawyers have had to field plenty of questions about it, it is still early days in terms of the number of filings in those jurisdictions.  Slovenia is though seeing quite a bit of concentration in the banking sector.

Looking ahead to 2024, it will be interesting to see if the impact of the new leadership at the authorities in Poland and Slovakia maintains the momentum set in 2023 and the role played by foreign direct investment.  It seems likely, however, that investigations into the pricing of consumer goods will remain at the forefront of work for competition lawyers in the region.