Areas of Non-compliance
Criminal Liability of Intermediary Service Providers

The Act on Electronic Commercial Services and on Certain Legal Aspects of Information Society Services (108/2001) took effect on January 24 2002 (for further details please see "Parliament Enacts New Law on Information Society Services"). While the act is largely in line with the E-commerce Directive (2000/31/EC), Section 18 notes that compliance with certain issues addressed in the directive was not achieved. Recent official feedback from the European Commission and studies conducted by the Ministry of Information Technology and Telecommunications have also revealed the existence of issues on which compliance has yet to be achieved.

Areas of Non-compliance

Section 18 provides that the act has been approximated to all of the directive's provisions with the exceptions of Article 2(g), Articles 3(2), (4) and (5), Article 8, Article 16, Articles 17(2) and (3), and Article 19. These articles cover the following issues:

  • the sending of commercial communications and the drafting of codes of conduct for regulated professions (Article 2(g), Articles 8 and 16);

  • a prohibition against restricting the freedom to provide information society services from another member state, and possible derogations from this prohibition (Articles 3(2), (4) and 5);

  • the promotion of out-of-court dispute settlements (Articles 17(2) and (3)); and

  • cooperation between EU member states (Article 19).

The act is expected to be amended to remedy these gaps in harmonization. Government Resolution 2099/2002 (III 29) on the Programme of for EU-Hungarian Legal Harmonization also sets out the objective of ensuring the act's full compliance with the directive.

Since a definition of 'regulated professions' is set out in other legislation which is harmonized with the relevant EU directives (ie, the Act on Acknowledgement of Foreign Diplomas and Certificates (100/2001) and related decrees which remain to be issued), the E-commerce Act will probably merely make reference to this legislation. However, the sending of commercial communications and the codes of conduct for regulated professions are expected to be specifically regulated within the act.

The prohibition against restricting the freedom to provide information society services from another member state will no longer be problematic once Section 1(2) of the act comes into force on the day of Hungary's accession to the European Union (May 1 2004). As Section 1(2) provides that the act will not apply to information society services provided within the territory of Hungary from an EU member state, the provision of such services from other EU member states will not be restricted. As the directive's rules on possible derogations from this prohibition are optional, the absence of such rules in Hungarian law is not cause for immediate amendment.

The changes necessary in order to implement the directive's provisions on out-of-court dispute settlements will most probably be made in other legislation. For example, amendments are likely to be made to the Arbitration Act (71/1994) and the Consumer Protection Act (155/1997).

As the directive sets out an obligation to designate contact points with other EU member states for recipients and service providers, it is expected that these contact points will be created and identified in the E-commerce Act or in other regulations.

Criminal Liability of Intermediary Service Providers

In addition to these gaps in harmonization, the liability of intermediary information society service providers under Hungarian law is another issue which has been raised. Sections 7 to 12 of the act exclude the civil law liability of information society service providers if the provider's activity is limited to the technical processes of operating and providing access to a communications network, through which information is stored or transmitted, with the sole purpose of making transmission more effective. The rationale behind this provision is that these activities are of a purely technical, automatic and passive nature, and the service provider has neither knowledge of nor control over the stored or transmitted information.

The E-commerce Act's provisions on the liability of such service providers are in compliance with Section 4 of the directive, which sets forth rules limiting the liability of intermediary service providers. However, it has been argued that since liability under the directive is limited to civil liability, the E-commerce Act's failure to exclude criminal liability might constitute a discrepancy between the EU and Hungarian legislation.

This would mean that the E-commerce Act sets forth more severe rules than the directive by not specifically excluding the possibility of criminal sanctions, even though civil liability is excluded for intermediary service providers. This problem is compounded by Section 7(5) of the act, which provides that the restriction of intermediary service providers' civil liability does not affect the possible applicability of legal consequences set forth in other regulations.

However, when analyzing compliance with EU legislation the entire legal system must be considered, and not just individual rules. Therefore, compliance with the EU regulations may also be ensured by certain provisions in other legislation.

Pursuant to Sections 13 and 14 of the Criminal Code (Act 4/1978), a criminal act may be committed either intentionally or negligently, where the code allows for the punishment of negligent acts. A criminal act is perpetrated intentionally where the offender intends to cause the consequences arising from his conduct, or acquiesces to those consequences. A crime is committed by negligence where the offender is aware of the possible consequences of his conduct, but carelessly trusts they will not occur. A crime may also be committed negligently by failing to foresee the possible consequences because of inattention or failure to exercise the caution that may be expected.

Section 7(4) of the E-commerce Act - in compliance with Article 15 of the directive - provides that service providers are not obliged to monitor continually the content of information which they transmit, store or make available. Neither are they obliged to investigate facts or circumstances that may be indications of illegal activities.

In view of this express exemption from any monitoring obligation, it is not possible for intermediary service providers to commit any criminal acts, either intentionally or negligently. Therefore, the Criminal Code and the E-commerce Act together ensure that the Hungarian rules relating to the liability of intermediary service providers are in compliance with the relevant EU legislation.

For further information on this topic please contact Gábor Faludi or András László at Szecskay Law Firm/Moquet Borde by telephone (+36 1 353 1255) or by fax (+36 1 353 1229) or by email ([email protected]).