Several amendments to national consumer protection legislation will enter into force on 28 May 2022 in the context of the implementation of Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 (the so-called “Omnibus Directive”). Below we briefly outline the most important new features of these four pieces of legislation.
PURPOSE AND REASONS OF THE REGULATORY SYSTEM
In view of the significant changes in recent years, such as the widespread use of online shopping, the renewal of technology and the increase in the number of new entrants to the retail sector, the need to amend consumer protection regulation has become a priority. Consumer protection is also a core element of both EU and national legislation, and the amendments set out below will further strengthen this protection. As described in the notice issued by the Hungarian Competition Authority (GVH) in May 2020, market participants were already adequately prepared to adapt their activities to the changes.
KEY CHANGES IN LEGISLATION
Act XLVII of 2008 on the Prohibition of Unfair Business-to-Consumer Commercial Practices
In online searches where the website compares a product or service offered by several traders, the consumer should be informed if the order of search results is influenced by paid advertising or paid ranking. It should be made clear to the consumer, in plain and intelligible language, the criteria used to rank the results and how this affects the search results, as well as the fact that the higher ranking in the search results is achieved by the trader for payment. in return for payment.
It is forbidden to influence consumers in bad faith when shopping online. Manipulative methods called ‘dark patterns’ encourage customers to make decisions that may not be in their best interests. For example, a ‘dark pattern’ is a pre-ticked box that encourages the purchase of another product for half price or setting of a countdown timer to signal the start of a special offer. According to the GVH notice, such practice may include the use of faded or smaller letters for relevant information or the inaccurate wording of the advertising text. It is therefore forbidden to unduly influence consumers or put them under psychological pressure and businesses must design their electronic interfaces in such a way that they do not distort consumers’ decisions.
The amendment obliges traders to check consumer reviews and only after verification can they disclose which reviews are received from actual users. They should also disclose on the basis of which criteria and how these opinions have been verified, and possibly if the reviews are placed on the trader’s website without verification.
It is forbidden to give false reviews or to entrust another legal or natural person with the promotion of a product or service.
The amendment also prohibits the posting of positive reviews on different platforms which are false and thus distort consumers’ decision-making. In connection with this, it is also forbidden for a trader to misrepresent a positive review. The trader must therefore ensure that the information is balanced, not selectively choosing between reviews or opinions, highlighting the positive and hiding the negative. This does not mean, of course, that you cannot moderate your own website if an opinion contains offensive content.
The above-mentioned cases are considered unfair without any further consideration, thus adding to the so-called blacklist of commercial practices.
4/2009 (I. 30) Joint Regulation of NFGM-SZMM on detailed rules for the indication of the selling price and unit price of products and the price of services (“Price Regulation”)
The amendment of the Price Regulation as regards the notification of the price reduction fully implements Article 2(1) of the Omnibus Directive as regards the notification of price reductions. In practice, compliance with this may cause difficulties for traders. For consumers, the price of the product is the most important information when making a purchasing decision, and they need to know the original price in addition to the discounted price to calculate their savings. The businesses should therefore also indicate the ‘original price’ before the price reduction is announced. The original price is the lowest price used for a specified period prior to the price reduction, but not less than 30 days. If the product has been on the market for less than thirty days, the original price represents the lowest price applied by the traders during a period which must not be less than fifteen days before the price reduction is applied. If the rate of price reduction gradually increases, then the “original price” is the price before the first application of the price reduction, without the price reduction. The exceptions are perishable products or products that retain their quality for a short period of time, and services are not subject to these restrictions.
Act CLV of 1997 on Consumer Protection (“Consumer Protection Act”)
The amendment concerns the sanctions applicable to infringements of the consumer protection provisions within the section of the Consumer Protection Act on administrative procedure. The authority may impose sanctions for breaches of the provisions on the basis of specified criteria after 28 May. New fine limits will be introduced where the infringement affects at least two Member States outside the place of the infringement, the amount of the fine shall be at least 4 % of the net turnover of the undertaking or, if the turnover of the undertaking cannot be established, at least EUR two million.
45/2014 (II. 26) Government Regulation on detailed rules for contracts between consumers and undertakings (“Regulation B2C”)
Regulation B2C introduces new consumer rights for “free” digital services and aims to increase the transparency of online markets. According to the amendments, the consumers should be informed of exactly who they are contracting with and whether the third party offering the product is a trader and therefore whether the transaction should be considered as a B2C contract, since the consumer has different rights depending on whether the seller is an undertaking.
The consumer should also be informed of how the obligations arising from the contract are distributed between a third party offering goods, services or digital content and the provider of the online market. It is not sufficient for this information to be included in the general terms and conditions or other contractual documents, the information must be clear and understandable. Within 14 days of the conclusion of the contract, the consumer will also have the right to withdraw from the contract or to terminate it in the case of “free” services where consumers provide their personal data but no financial compensation is paid.