Hungarian Competition Authority launches study on impact of AI on competition and consumers

On the eve of the European Commission’s calls for contributions on competition in virtual words and generative AI, the Hungarian Competition Authority (HCA) announced that it is launching a market analysis to study the impact of AI on competition and consumers.

The HCA’s decision to launch an AI market analysis comes as Artificial intelligence (AI) grows in importance among regulators and legislators both in Hungary and in the EU, particularly in 2024 after the political agreement on the AI Act and the Hungarian financial regulator’s thematic study on the risks of AI and machine learning in the financial sector, which took place late last year. 

The following article provides an overview of the HCA’s procedure for its AI market analysis and potential next steps.

Subject and aim of the market analysis

On 4 January 2024, the HCA initiated a market analysis to examine the impact of AI from the perspective of both competition and consumer protection. Interestingly, the HCA’s analysis seems to overlap with another recent inquiry: the European Commission’s calls for contributions on competition in virtual worlds and generative AI announced on 9 January 2024.

The HCA’s official announcement mentions two main topics the procedure will focus on:

• Competition perspective: The HCA contends that limited access to resources for AI development could create a competitive advantage, potentially distorting or constraining competition in the future.
• Consumer protection perspective: The HCA highlights that, from its perspective, AI in the digital space introduces various considerations for consumers, including potential advancements in the collection and utilisation of consumer data. Additionally, it mentions concerns related to the use of ‘dark patterns’ and personalised advertising.

Investigative steps

According to the HCA’s announcement, the market analysis will use four main investigative methods:

• Consultation with professional organisations and academia: To lay the groundwork and map the markets concerned by AI, the HCA first plans to consult with Hungarian professional organisations and universities;
• Desk research: The HCA will also conduct desk research to delve into international practices and experience;
• Market research: The HCA will engage external experts to carry out market research to explore the use of AI by businesses and consumers, assess challenges, opportunities, etc.;
• Questionnaires to stakeholders: The HCA also plans to address questionnaires to large technology to obtain their views.

Potential next steps

In light with the above, stakeholders can expect to receive voluntary questionnaires from the HCA as soon as February 2024. Ultimately, the market analysis will be concluded by a study presenting the issues examined, the HCA’s findings and any further measures that may be necessary, which will be published on the HCA’s website in July 2024.

Although the market analysis does not deal with specific potential infringement but focuses on a general understanding of the use and impact of AI, the study could provide a general insight into the HCA’s approach towards AI, and the findings may also affect the HCA’s enforcement priorities.

Follow this link to view the HCA’s announcement (in Hungarian).

The article was co-authored by Dóra Altziebler and Márton Angyal. 

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