Three Recent Developments Shaping Hungary’s Competition and State Aid Framework

Legislative and regulatory developments in Hungary continue to reshape the legal framework that businesses operate under. This article highlights three developments of particular competition and state aid relevance – the creation of a new constitutional authority tasked with protecting and recovering public assets, the European Commission’s decision to refer Hungary’s retail price margin restrictions to the CJEU, and the approval of a EUR 2 billion capital injection into the Hungarian Development Bank (MFB). 

While the Commission’s referral is not strictly a Hungarian legislative or regulatory development, it carries significant implications for the Hungarian legal framework, including the potential amendment or repeal of the contested legislation. Taken together, these measures reflect policy and regulatory developments that businesses in Hungary should monitor.

Amendments to the Hungarian Competition Act: integrating the National Asset Recovery and Asset Protection Office

On 10 July, the Hungarian government submitted a legislative proposal (T/357) on the establishment of the National Asset Recovery and Asset Protection Office (NVVH), a newly created constitutional body. The NVVH will be tasked with identifying, investigating and recovering unlawfully diverted public assets and overseeing the use of public funds, with further details on its powers and functions discussed in a previous article.

Importantly, the NVVH may cooperate with domestic, EU, and international bodies in its areas of responsibility. Central government agencies, including the Hungarian Competition Authority (HCA), will be obliged to cooperate with the NVVH during investigations, and intentional non-compliance may be subject to a fine.

The proposed legislation also introduces two primarily technical amendments to the Hungarian Competition Act to reflect the transfer of certain powers previously exercised by public prosecutors to the NVVH:

• Cartel informant rewards: A person who provides indispensable written evidence enabling the HCA to establish a cartel infringement is entitled to a financial reward. If criminal or administrative infringement proceedings are initiated, however, payment must be suspended until those proceedings have been concluded. Under the proposed amendment, this suspension will also apply to proceedings conducted by the NVVH.
• Evidence protection: The disclosure of evidence generated in a criminal proceeding may not be ordered in private damages lawsuits until the relevant criminal investigation has been concluded. The proposed amendment extends this protection to materials obtained by the NVVH in the exercise of its powers.

Commission refers Hungary to the CJEU over price-margin restrictions

The Commission has referred Hungary to the Court of Justice of the European Union (CJEU) in two infringement proceedings that challenge Hungarian price-margin caps imposed on retailers – INFR(2025)2052 (food products) and INFR(2025)2102 (non-food/drugstore products). Under Government Decrees 42/2025 and 93/2025, passed under the state-of-danger regime that was applicable in Hungary until 14 May 2026, retail margins were temporarily capped at 10% for certain food products and 15% for certain drugstore articles. Notably, these measures have since been incorporated into Act CLXIV of 2005 on Trade as one of the first legislative acts of the new parliament, which means they remain part of the Hungarian legal framework.

The Commission alleges that the measures discriminate against foreign-owned retail chains, are disproportionate, and effectively force retailers to sell at a loss because the margin caps fail to account for substantial cost items such as personnel, real estate and taxes. The Commission considers the restrictions incompatible with the freedom of establishment under Article 49 TFEU and Directive 2006/123/EC (Services Directive). 

The referral follows a formal notice issued in June 2025 and a reasoned opinion delivered in December 2025. The CJEU will now examine the case to determine whether the Hungarian measures are compatible with EU law.

It remains to be seen how the Hungarian government and legislature will respond, particularly in light of the government’s efforts to access EU funding, which may shape its approach to the retail-margin restrictions.

State aid: Commission approves EUR 2 billion capital injection into the Hungarian Development Bank

The Commission has approved (Case SA. 123592), under EU State aid rules, a EUR 2 billion (HUF 760 billion) capital injection by Hungary into the MFB – Hungary’s state-owned development bank, tasked with channelling medium- and long-term domestic, international, and EU funding to support the government’s economic development objectives. The measure will be funded by the Recovery and Resilience Facility (RRF), and is designed to address market failures in infrastructure, agriculture, environmental protection, education, tourism, sports, and urban, rural, and regional development.

The investment targets four specific objectives: 

• an SME competitiveness programme; 
• a capital programme for early-stage, innovative, green and digital SMEs; 
• rental housing and student dormitory development; and 
• co-financing arrangements with the European Investment Bank for the implementation of Hungary’s Recovery and Resilience Plan. 

The Commission approved the measure under Article 107(3)(c) TFEU, finding that it facilitates economic development, is necessary, appropriate, and proportionate, and includes adequate safeguards against crowding out private operators.

The Parliament has also passed a new law (Act XXIX of 2026) amending the MFB Act (see this CMS law article). The link between that amendment and the now approved capital injection is no coincidence. Both initiatives further strengthen the MFB’s role in administering and implementing state-supported financing programmes. In practice, the MFB will distribute the EUR 2 billion aid package, subject to the stricter rules introduced by the amended MFB Act, including tighter counterparty transparency requirements, restrictions on the conditions for state suretyship in favour of the MFB, new prudent-operation and programme-disclosure obligations, ring-fencing of RRF-funded capital increases, and a strengthened governance and conflict-of-interest framework.

Outlook

While these three developments concern distinct regulatory areas, they each reflect broader policy initiatives that will likely remain relevant in the near term. Businesses may wish to follow the progress of the NVVH legislation and its interaction with existing enforcement authorities, the outcome of the Commission’s challenge to Hungary’s retail margin restrictions before the CJEU, and the implementation of the newly approved MFB funding programmes and related legislative amendments.

At a broader level, these measures demonstrate how competition, state aid, public finance, and internal market considerations increasingly intersect in Hungary’s ongoing reform efforts. Further developments in these areas may have practical implications for companies relying on public funding, operating in the retail sector, or interacting with state-owned financial institutions.

For more information on these developments and how they could impact your business operations in Hungary, contact your CMS client partner or the CMS experts who contributed to this article.

This article was co-authored by Lilla Vereska.