The Hungarian Competition Authority (GVH) closed the procedure for evaluating the competition restrictions related to the acquisition of CodeCool Kft., Which provides IT training services, the organization announced yesterday. The decision of the Competition Authority makes it possible to stipulate conditions when selling startups that can ensure that inventors and developers of innovation do not later compete on the basis of the same idea. According to the agency, this may make it more attractive to invest in startup-type businesses and encourage incentives to innovate, as its market value does not decrease even after sales. means the sale of all or part of the business. It is common practice for buyers to make clauses in such corporate transactions to keep an excellent owner (seller) of businesses away from the market into which the buyer enters through the purchase for a number of years. This type of non-compete obligation is recognized as lawful by competition law, but only for owners who leave the business altogether.
At the same time, with the current decision of the GVH, it was made clear that this restriction is also lawful in cases where under the contract between the parties the idea owners remaining in the company as a minority owner are obliged not to compete with the startup company.
In connection with the specific case, the Competition Council of the GVH – without finding an infringement or the absence thereof – obliged the Enter Tomorrow Venture Capital Fund, PortfoLion Regional Private Equity Fund, HAMV Foundation, CodeCool Kft., Bálint Viktor, József Péter Boda, József Nyíri, Máté Rémiás, Gábor Simon and dr. Balázs János Vinnai companies and individuals subject to the procedure for the fulfillment of their joint commitment, according to which they must amend the Investment Agreement concluded by them on 20 December 2018 on several points.
Gellert is Technology Editor at Counting News Media and contributor at other major tech publications. Her interests includes testing new gadgets and reading.