Hungary: Updated guidelines in respect of misleading consumer cases

On 1 September 2008 the Act XLVII of 2008 on the prohibition of unfair commercial practices (“UCP Act”) came into force, implementing directive 2005/29/EC in to Hungarian law. As a result, related amendments were made to the Act LVII of 1996 on the prohibition of unfair market practices and unfair competition (“Competition Act“) and the Act XLVIII of 2008 on the essential conditions and certain barriers of business advertising activity (“Advertising Act“), which considerably affect the procedures initiated for misleading consumers. Following these changes, the Hungarian Competition Office (“HCO”) recently issued updated guidelines on the principles on the freedom of consumers’ decisions followed by the HCO in cases of misleading consumers.

The updated principles primarily concern administrative and technical changes (i.e. modification of references, sections, etc.) due to the amendments made to the applicable law.

In addition to the administrative changes, material modifications are also expected once the HCO has elaborated its standpoint and practice with regard to the amended provisions. These future substantial modifications are likely to affect:

• the procedure of consumers’ decision making – in its former practice, the HCO examined the whole decision making procedure from the very first moment, and if the initial information communicated at the first stage was somehow misleading or did not contain all the necessary information, such communication was more likely to be in breach of the relevant regulation, even when the consumer received all information necessary to reach a due decision at a later stage. The UCP Act (when defining the notion of ‘transactional decision’) has introduced detailed provisions on the posterior information-provision and differentiated handling of the different stages of the consumers’ decision making procedure, therefore changes in the HCO’s practice may occur in future cases;
• integrated advertising campaigns – when examining integrated advertising campaigns, the HCO used to evaluate the message of the campaign as a whole and also the message of the advertisements forming part of the campaign. As the respective definitions in the applicable law have recently been amended, the HCO’s new standpoint and opinion in this regard must also be elaborated and changes in its respective future practice might appear.

The HCO has indicated in its press release that these expected updates and modifications will not necessarily mean that the HCO will deviate from its former standpoint and practice; it solely indicates the need for the detailed analysis of the recently amended provisions from the practical point of view.

Law: Act XLVII of 2008 on the prohibition of unfair commercial practices; Act LVII of 1996 on the prohibition of unfair market practices and unfair competition; Act XLVIII of 2008 on the essential conditions of and certain barriers of business advertising activity