A high-ranking official within Hungary’s primary antitrust regulator has alleged that the agency is increasingly steered by political interests, claiming that the enforcement of competition law is applied inconsistently depending on a company’s relationship with the governing power. Zombor Berezvai, a lead economist at the Hungarian Competition Authority (GVH), suggests that the agency has effectively divided the national economy into three distinct zones of regulation.
The allegations, which surfaced during a recent interview, paint a picture of a regulatory body that is professional in some areas but paralyzed or weaponized in others. Berezvai claims that while the GVH possesses the technical expertise to create genuine value for the economy, this capacity is selectively applied, leaving certain politically connected entities untouched while others face disproportionately high penalties.
The GVH has strongly denied these claims, describing them as a breach of professional ethics and a violation of the civil service oath. A spokesperson for the agency asserted that the regulator remains independent of party politics and that the internal disagreements mentioned are merely standard professional disputes common in complex regulatory environments.
The Three-Tier Economy: Selective Enforcement
At the center of the controversy is Berezvai’s conceptualization of how political influence in the Hungarian Competition Authority manifests in practice. He argues that the agency does not view the market as a single entity, but rather as three separate spheres with different rules of engagement.
The first sphere consists of entities closely tied to the National System of Cooperation (NER). According to Berezvai, this is the area where the authority is largely unable to act. He cited a specific instance involving the merger of two airport ground-handling companies, AS Budapest and Menzies Aviation. Berezvai claims that although the GVH began an investigation into the merger, the senior leadership halted the process without providing a professional justification. He pointed to the fact that AS Budapest was owned by Ferenc Kis-Szölgyémi, a figure linked to the Fidesz party, as a likely reason for the political obstacles encountered during the probe.
The second sphere involves companies that fall outside the government’s inner circle and may even be viewed as adversarial. In these cases, Berezvai alleges that the GVH acts with aggressive hostility, often issuing fines that he describes as excessive relative to the actual infringement. He highlighted the 11.5 billion HUF fine imposed on Nitrogénművek, the company owned by businessman László Bige, which Berezvai characterized as disproportionately high. Bige later won a legal battle against the GVH regarding this matter.
Another example cited was the 186 million HUF penalty levied against the retailer Lidl. The fine was triggered by allegations that the company misled consumers regarding the “full-crust” nature of its rolls (kifli). While Berezvai noted that the existence of a violation was not the issue, he argued that the scale of the fine was unnecessarily large.
The third and final sphere is where Berezvai believes the GVH still operates as a professional, value-adding institution. In this zone, competition law is enforced rigorously and fairly, producing positive outcomes for the market. He suggested that if this professional approach were extended to the entire economy, the state could save taxpayer money by eliminating redundant or politically motivated cases and focusing on truly problematic market behaviors.
| Economic Sector | Regulatory Approach | Example/Outcome |
|---|---|---|
| NER-Linked | Passive/Inhibited | AS Budapest & Menzies merger probe halted |
| Adversarial/External | Aggressive/Punitive | High fines for Nitrogénművek and Lidl |
| Professional Zone | Standard Enforcement | Effective application of competition law |
Institutional Pushback and Ethical Disputes
The GVH responded swiftly to these allegations. Bálint Horváth, the agency’s communication head, stated that Berezvai had violated his professional duties and his oath of office by discussing internal matters in a partisan context. Horváth argued that the interview was an attempt to drag a neutral national authority into a political campaign.
Regarding the specific cases mentioned, the GVH maintains that no external political pressure was exerted. In the AS Budapest and Menzies case, the agency claimed the decision was based on a lack of harmful effects on the market and noted that no competitors challenged the ruling. In the cases of Nitrogénművek and Lidl, the GVH asserted that the courts have either confirmed the violations or that the legal processes are still ongoing, maintaining that the size of the fines falls within the legal discretion of the Competition Council.
Horváth suggested that Berezvai’s public comments may have jeopardized ongoing legal proceedings, specifically citing the pending court case involving Lidl. The agency’s leadership contends that Berezvai’s descriptions of the “three-tier” system are a mischaracterization of routine professional debates that occur between different departments within the authority.
Leadership and Internal Dynamics
The tension within the agency comes at a time of leadership continuity. The current president of the GVH, Csaba Balázs Rigó, was reappointed for another six-year term on April 15, following a recommendation from Prime Minister Viktor Orbán. While Berezvai described Rigó as a “good person,” he raised separate concerns regarding the internal handling of documentation, alleging that the communication department had begun rewriting professional reports to align with certain narratives.
This internal rift highlights a broader debate regarding the independence of regulatory bodies in Hungary. The ability of the GVH to act as a neutral arbiter of market fairness is central to investor confidence and the overall health of the national economy. When high-level staff allege that professional reports are being altered or that mergers are blocked from investigation due to political ties, it raises questions about the transparency of administrative sanctions.
The immediate future for Zombor Berezvai appears precarious. He acknowledged during his interview that his actions likely violated the agency’s ethical code and predicted that he would either be dismissed or face a formal ethics investigation.
The next critical checkpoints in this story will be the outcome of the ethics proceedings against Berezvai and the final court rulings in the Lidl and Nitrogénművek cases, which will determine whether the fines were legally justified or indeed excessive. We will continue to monitor the GVH’s filings and any further statements from the Competition Council.
Do you believe regulatory bodies can remain truly independent in highly centralized political environments? Share your thoughts in the comments below.
Disclaimer: This article discusses ongoing legal disputes and administrative proceedings. The information provided is for informational purposes and does not constitute legal advice.
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