The Competition Council of the Hungarian Competition Authority (GVH) has imposed a fine of HUF 32.6 million (approximately €85,000) on Bravogroup Holding Vagyonkezelő Kft. for breaching the prohibition on implementing a merger without prior notification and clearance.
The GVH found that Bravogroup acquired direct sole negative control over Mystical Hungary Zrt., the Hungarian distributor of the Xiaomi brand, as of 27 February 2023, through a 50% ownership stake. Although negative sole control does not allow the controller to take independent strategic decisions, it does confer the ability to block decision-making and therefore qualifies as control under Hungarian competition law. Despite this, the transaction was implemented without notifying the GVH or obtaining its approval.
Bravogroup only initiated pre-notification consultations with the authority in early October 2024, at which point it acknowledged that it had infringed the enforcement ban set out in the Competition Act. In total, 582 days elapsed between the acquisition of control and the first notification to the competition authority.
While the GVH subsequently established, by way of an official certificate, that the concentration did not raise substantive competition concerns, it nonetheless launched infringement proceedings for failure to notify. During these proceedings, Bravogroup fully cooperated, voluntarily disclosed and acknowledged the infringement, and waived its right to legal remedy. Taking these factors into account, the Competition Council imposed a significantly reduced fine compared to the statutory maximum.
In its decision, the GVH reiterated that all mergers exceeding the statutory thresholds, including acquisitions of negative control, must be notified and cleared before implementation. The authority emphasized that voluntary post-closing notification and full cooperation can lead to substantial reductions in fines. The GVH also highlighted its ongoing efforts to reduce administrative burdens, noting that merger clearances issued by official certificate are granted in an average of four days, among the fastest procedures in Europe, and that simplified notification forms and pre-notification consultations are available for transactions that do not raise competition concerns.