From 28 May 2022, certain consumer protection legislation were amended on a number of issues. The purpose of this newsletter is to briefly summarize the main changes that will be relevant after this date regarding consumer protection.

Further lines of defense to protect consumers
Consumer protection regulations changed as of 28 May 2022
Amendment of “black list”

1. Government Decree 45/2014. (II. 26.) on Detailed Rules Governing Contracts Concluded Between Consumers and Businesses is amended (the „Decree”)

In order to implement the requirements of the European Union legislation and to follow the new consumer protection challenges of recent years, the Decree was significantly amended as of 28 May 2022. Several new definitions were introduced and previous definitions were significantly amended as follows:

a) On the one hand, the scope of the Decree has also changed: from now on it shall apply to all contracts concluded between a consumer and a business (consumer contract) where the consumer pays or undertakes to pay for the goods as well as in cases where the business provides digital services and the consumer provides or undertakes to provide such personal data.

b) The definition of a contract for providing a service has also changed, which now means any contract other than a contract of sale under which a business provides or undertakes to provide a service to a consumer, including digital services.

c) The amendment introduced the definition of “product” as a substitute for the previous definition of “good” in the Decree, which covers a wider range than the product previously did, extending the definition to, among others, digital contents and digital services.

d) The concepts of personal data, digital services and the online market have also been introduced into the definitions of the Decree.

e) The amendment of the Decree extended the scope of the company’s pre-contractual information obligation towards consumers in the case of both off-premises and distance contracts, extending this obligation to, inter alia, digital content and services, and also included in the Decree the scope of specific additional information requirements for contracts concluded in online markets.

f) The cases allowing the consumer to exercise the right of withdrawal and termination have also changed, new exceptions have been introduced.

2. Changes in NFGM-SZMM Joint Decree of 4/2009. (I. 30.) on the sale price and unit price of goods, and detailed rules regarding the indication of price for services (the „Price Decree”)

In order to provide consumers with authentic information, the rules on price indication have also been amended in accordance with the EU regulations from the end of May. One of the primary objectives of the amendment to the Price Decree, in line with the EU legislation, is to put an end to the significant sale taken by regularly changing prices from time to time, in particular that such price changes are often accompanied by unfair consumer information. The new provisions are introduced in order to ensure that consumers are properly and correctly informed about price changes that are indicated as real but are not real.

Accordingly, in accordance with the regulation following 28 May 2022, the special price must in all cases be determined in relation to the lowest price applied during a reference period of at least 30 days, and in addition to the promotional amount, the said previous price must also be indicated in the customer informations when announcing the discount applied in trade. If a given discount covers the whole set of goods or a specific group of goods, the necessary information has to be provided for each of the products concerned individually. The perishable products or products with short shelf-life are exceptions to the new rules on price reductions, for which different rules are expected to be set out.
Therefore, along with the new regulation, it can be said that the gradual reduction of the price can be applied only in accordance with the law, if the special price is reduced by the company gradually, without interruption, and in the course of such price reduction, the price never increases.

3. Annex to Act XLVII of 2008 on the Prohibition of Unfair Commercial Practices (the “Consumer Protection Act”), also known as the “black list”

a) Based on the new provision that entered into force on 28 May 2022, new elements have been added to the Consumer Protection Act’s known as “black list”. Accordingly, further forms of abuse of online assessments can already be sanctioned as infringements, i.e. it is prohibited:
a. to enter search results based on the consumer’s online search query without clearly revealing paid advertisements or payment specifically designed to rank products higher in search results;
b. to resale tickets for events to consumers if the trader has purchased them by automated means in order to circumvent the restrictions on the number of tickets that can be purchased by one person or any other rules applicable to the purchase of tickets;
c. to claim that the product rating has been submitted by consumers who have actually used or purchased the product without taking reasonable and proportionate steps to verify that the ratings come from such consumers;
d. to submit or commission false consumer reviews or recommendations in order to promote products, to commission another legal or natural person to do so, or to misrepresent consumer reviews or recommendations in social media.

b) From 28 May 2022, the phenomenon of the so-called “dual quality” may also be sanctioned as unfair commercial practice under the Consumer Protection Act’s black list. In this context, “dual quality” shall mean the practice of distribution of a given product in one EU Member State as corresponding with a product distributed in another EU Member State, while there are significant differences in the composition or characteristics of the latter without this having been justified by legitimate and objective factors.

In case of non-compliance with the requirements affected by the above changes, companies may expect significant sanctions and a high risk of fines.

The purpose of this article is to provide a brief, concise information on certain issues. The content of this article is not exhaustive and does not constitute a legal advice.

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