Hungarian gov't might back down on giving competition watchdog totalitarian powers

Back in early April, Portfolio reported that the government would have introduced the concept of "companies of essential importance" in the new draft law. Under the proposal, the GVH would be able to determine who falls into this category based on sector inquiries.

But the proposal would also have given the GVH enormous powers.

If the authority determines that a company of essential importance is unable to carry out its activities or that security of supply is threatened, the GVH could oblige

• the owners of the company concerned to sell all or part of their shareholding in the company;
• the company to transfer its assets for operation at a cost-based fee;
• the company to replace or appoint members of its management board;
• the company to suspend or transfer voting rights to other owners;
• the company to convene a board meeting and take certain decisions.

According to Válasz Online, the Legislative Committee will discuss the draft legislation on Thursday. However, yesterday, ruling party MPs circulated their proposed amendments that would remove the most controversial paragraphs from the law, including the "company of essential importance" qualification.

According to Válasz Online, the background to the decision is that the government has come under considerable foreign pressure - from the US, Germany and France - which has forced the bill's supporters to back down.

Cover photo: Portfolio