The Hungarian Cocktail of Competition Law and Consumer Protection: Should It Be Dissolved?

Hungary, a candidate country expecting to join the EU in 2004, has to approximate its laws and economic policies to those of the EU. However, it is not certain whether the Brussels standards will always improve national rules.This article will discuss one possible case. It concerns the special Hungarian legislation on competition law and certain consumer protection rules in the Competition Act of 1990 and the amended Act of 1996. The inclusion of rules governing consumer interests in the Acts greatly contributed to the recognition and the enforcement of consumer interests in Hungary.Nevertheless, the European Commission and the OECD increasingly argue that the Hungarian Office of Economic Competition should pass its competence in consumer related cases to another institution and instead pay more attention to more prominent fields of competition law such as horizontal agreements and mergers.This article will contest this argument. Although it is an understandable approach, there are several reasons why it should be carefully reconsidered. These include the position of consumers, which is still weak, the general system of consumer protection in Hungary, and the strong standing of the Office for Economic Competition. The comprehensive nature of the Hungarian Competition Act of 1996 is one of the cases in which the European guidelines should be considered with caution in order to determine whether their implementation would improve or damage a system that already functions well.     

Institutional Design in Hungary: A Case Study of the Unfair Commercial Practices Directive

The adoption of the Unfair Commercial Practices Directive (UCPD) and its implementation in the EU Member States raised many academic and policy discussions on substantive issues such as the fairness notion, the substantive test of material distortion, as well as the concept of the average consumer. However, its influence on the Member States' enforcement regimes is equally far-reaching. This paper analyses on the one hand, how EU law, i.e., the UCPD, affected the traditional enforcement models of the Member States and on the other hand, how the allocation of enforcement powers to institutions who enforce the UCPD and the organizational design of these enforcement institutions influence the actual enforcement of EU law in the national legal context. This paper conducts a case study on Hungarian law and examines how Europeanization of unfair commercial practices has changed the Hungarian model of law enforcement. The paper finds that the changes in the Hungarian institutional framework had significant impact on how substantive rules are applied by the various enforcement agencies due to their different enforcement legacies. This case study shows that looking at institutional design provides a deeper understanding of local enforcement modalities, and it offers new insights for Europeanization strategies.