Information Society Services
Scope of the Act
Exclusion of Prior Authorization
Information Requirements
Electronic Contracts
Liability of Internet Service Providers
Unsolicited Advertising

In line with the E-commerce Directive (2000/31/EC), the Hungarian Parliament adopted the Act on Electronic Commercial Services and on Certain Legal Aspects of Information Society Services (108/2001) on December 18 2001. The act took effect on January 24 2002.

The act contains rules on the following issues:

  • the exclusion of prior authorization principle;

  • information to be provided relating to information society services;

  • the conclusion of electronic contracts;

  • the liability of service providers;

  • unsolicited advertising; and

  • consumer protection.

Information Society Services

The term 'information society service' covers (i) any service provided by electronic means, at a distance, for consideration and pursuant to the individual request of a recipient of such services, and (ii) any such service provided for free, if this does not fall under the scope of the freedom of speech rights guaranteed by the Constitution.

Scope of the Act

In compliance with the directive, the act is based on the 'country of origin' principle - that is, an information society service will be governed by the law of the EU member state from which the service is provided. However, until Hungary joins the European Union (estimated to be in 2004-2005) this principle is not applicable with respect to services provided from EU member states.

In other words, until Hungary joins the European Union, the act's provisions will apply to all information society services provided both from and to the territory of Hungary, and to all service providers and service receivers that provide or receive such services. A service is considered to be provided to the territory of Hungary if it can be inferred from the language, the currency or other relevant circumstances that the service is intended to be accessible to Hungarian recipients.

Exclusion of Prior Authorization

Information society services may be provided by any natural or legal person. However, such authorization shall nonetheless be subject to the application of qualifications, notifications or licensing requirements stipulated by other legal rules.

Information Requirements

An information society service provider must make certain information permanently accessible to service recipients and competent authorities. This information must be provided in Hungarian and includes the following:

  • details of the service provider, including (i) its name, (ii) the geographical address at which it is established, and (iii) its contact details, including its email address, and (iv) its tax identification number;

  • whether provision of the service is subject to authorization, and if so, the details of the relevant supervisory authority and the relevant permit number;

  • the name of the professional chamber of which the service provider is a member;

  • essential information about the products or services on offer, including (i) an adequate description of these products or services, (ii) instructions for their use or maintenance, together with details of any hazards associated with such use, (iii) the quality of the products or services, and (iv) the relevant prices;

  • other information that will enable the consumer to make a final decision on the product or service to be purchased; and

  • basic information on the enforcement of consumer rights.

Where information society services are provided at a charge, this must be indicated clearly, unambiguously and permanently. In particular, the service provider must indicate whether they are inclusive of tax and delivery costs.

The service provider must also provide general information on the security of its systems and potential risks that might arise from their use.

Electronic Contracts

Before an order which forms the basis of an electronic contract can be concluded, the service provider must make the contractual terms and general conditions accessible in such a way as allows the recipient to store and reproduce them. In addition to the information listed above, it must also provide details on the following:

  • all technical steps necessary to conclude the contract;

  • whether the contract will have the force of a written contract;

  • whether the service provider will register the contract and make it available at a later time;

  • the technical means by which input errors can be identified and corrected;

  • the language of the contract; and

  • the rules of the code of conduct to which the respective service provider is bound.

The service provider must ensure that the recipient is able to identify and correct input errors prior to placing the order. If the technical means to do this are not available, the recipient's order will not have the legal effect of an offer.

The service provider must acknowledge receipt of the recipient's order without undue delay and by electronic means. If its acknowledgement does not arrive in the recipient's electronic mailbox within 48 hours of the recipient submitting his offer, the recipient will not be legally bound by the offer. The acknowledgement of receipt is deemed to have been received when the party to whom it is addressed can access it.

These rules shall apply to both business-to-business and business-to-consumer contractual relationships. However, in the former the parties may derogate from the provisions relating to the information requirements and the point at which the contract becomes effective. In addition, the rules will not apply to contracts concluded exclusively by exchange of email or other such equivalent individual correspondence.

Liability of Internet Service Providers

In general, an internet service provider (ISP) is subject to a general civil law liability. However, in compliance with Articles 12-15 of the directive, the new act defines how an intermediary service provider may exclude liability with respect to its activities if these are limited merely to acting as a conduit, caching or hosting, or to the provision of search engine services.

In certain circumstances specified by the act, there is no general obligation on ISPs to monitor the content of the material that they manage either prior to transmission or on a permanent basis. Nor are they required to investigate actively facts or circumstances which give rise to suspicions of illegal activities.

The act introduces a so-called 'notice and takedown procedure' similar to that set out in the US Digital Millennium Copyright Act. Under this procedure, a copyright owner or owner of related rights may request the ISP to remove any illegal content or make it inaccessible within 12 hours. However, the entity which posted the disputed content has the right to challenge its removal within eight days, upon which the ISP must make the content accessible again, as long as the entity has provided its contact details. However, if the right owner initiates a court procedure within 10 days, the provider must again remove the offending content. The act expressly stipulates that the right owner and the ISP may enter into an agreement relating to the application of this procedure.

Unsolicited Advertising

The act provides for opt-in registers in which natural persons wishing to receive commercial communications can request that they be mailed the same. In other words, the receipt of unsolicited commercial communications is subject to the prior consent of any recipient.

In addition, the fact that such electronic communications are advertisements must be identifiable at the point at which they become accessible to the recipient - that is, prior to opening the message.

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