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In a new article of our series on consumer protection changes in 2022, we overview the most recent amendments. On 28 May 2022, four pieces of consumer protection legislation came into force transposing the provisions of Directive 2019/2161 of the European Parliament and of the Council (the “EU Directive“[1]). The practice of price marking in the case of price reductions has been tightened, the list of unfair commercial practices has been extended, the government decree applicable to consumer contracts has been amended, and some new provisions have been introduced in the area of fines.

I. Price reduction – We are enjoying real promotions this summer!

End-of-season sales, „joy days”, last pieces from the spring collection! Hurry up, here’s the last chance to get them, buy it now wear it next year, it’s such a bargain! Is it indeed? One can often hear the assumption that promotions only seem so promising at first, taking into consideration shops increase their prices not so before the sales, so in fact, the promotions reset the pre-sales prices.

Apparently, the legislator intended to address the problem above – in accordance with the relevant provisions of the EU Directive – by amending the Joint Decree No. 4/2009 (I. 30.) NFGM-SZMM on the detailed rules for the indication of the selling price and unit price of products and the indication of the price of services (hereinafter referred to as: “Joint Decree No. 4/2009 NFGM-SZMM“).

Under the amendment, the businesses deciding to offer promotion regarding a product are required to indicate the lowest price previously applied during at least 30 days preceding the application of the price reduction next to the promotional price.[2] If the product has been on the market for less than thirty days, the previous price means the lowest price applied by the business during a period of at least fifteen days preceding the application of the price reduction.[3]

In the event of gradual increase of the price reduction, the original price – without applying any reduction – shall be displayed.[4] The amendment excludes perishable or short-lived products from the scope of the above rules.[5]

II. Unfair commercial practices – extending blacklist, dual quality etc.

The Act XLVII of 2008 on the Prohibition of Unfair Business-to-Consumer Commercial Practices (hereinafter referred to as: „The Act”) was amended at more points.

1. The legislator has introduced three new definitions: (i) “product” instead of “good” with modified content; (ii) ranking and (iii) online marketplace.

2. The list of unfair commercial practices – the so-called “blacklist” – has been extended. Amongst others, the practice of traders that they submit (or they commission others to submit) false consumer reviews of their products was added to the blaclist[6], as well as the practice of providing search results in response to a consumer’s online search query without clearly disclosing any paid advertisement or payment specifically for achieving higher ranking of products within the search results.[7]

A major innovation is the provision on the so-called dual quality, which prohibits „…any marketing of specific goods, in one Member State, as being identical to specific goods marketed in other Member States, while the goods in question have significantly different composition or characteristics, unless justified by legitimate and objective factors,

if taking account of the factual context it causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.”[8]

However, only the preamble to the EU Directive[9] specifies:

• the criteria the authority shall use to assess compliance with the provision;
• and what legitimate and objective grounds are available to protect traders.

„Competent authorities should assess and address on a case- by-case basis such practices(…)” during which they will take into account aspects such as „whether such differentiation is easily identifiable by consumers”, or „a trader’s right to adapt goods of the same brand for different geographical markets due to legitimate and objective factors”[10]

Circumstances that justify non-compliance include compliance with other legislation, availability of raw materials or seasonality.

However, businesses are required to ensure that consumers are properly informed of the difference, preferably on the product label.

III. Consumer Contracts – … in target: online marketplace providers

Government Decree No. 45/2014 (II. 26.) on the detailed rules of contracts between consumers and businesses (hereinafter referred to as: “Government Decree No. 45/2014“) was also amended.

1. The amendment sets out additional information requirements to be given to consumers for contracts concluded on online marketplaces,

2. stipulates new requirements on how businesses shall process consumers’ personal data and non-personal data generated by the use of digital content and services,

3. and updates the sample of withdrawal/cancellation notice in the Annex in accordance with the changes specified above.

As mentioned in Section II above, the concept of online marketplace has been introduced by the amendment to the Act that entered into force at the same time: „a service using software, including a website, part of a website or an application, operated by or on behalf of a trader which allows consumers to conclude distance contracts with other traders or consumers.”[11] The additional information requirements that recently came into force bind the businesses providing online marketplaces for consumers (online martketplace providers: emag.hu, jofogas.hu etc.). The necessity of additional information requirements is justified by the fact that, in case of online contracts – of which significance has surged during the pandemic – consumers are often confused about who their actual contractual partner is and how it affects their rights and obligations. The part of the amendment related to marketplaces seeks to address this problem. For example, online marketplace providers are obligated to inform consumers whether a third party offering goods, services or digital content is a trader or a person without trader status[12], and if not, the providers also have to inform the consumer that the contract is not bound by consumer protection law, thus the consumer is not entitled to exercise the rights provided for consumers[13].

The amendment to Government Decree No. 45/2014 includes the same provisions[14] on the processing of personal data and content generated by the use of digital content and services, to the ones set out in Government Decree No. 373/2021 which came into force on the 1st of January (on which you can read our previous article here). With their inclusion in Government Decree No. 45/2014, the provisions on data processing are now applicable to all consumer contracts.

IV. Novelties in the field of fines

Here  you can read our former article on the changes to consumer protection fines that also came into force at the end of May.

Dr. Máté Zalán Szili

Photo credit: unsplash.com

This article contains general information and is not intended for use as legal advice or legal opinion. Although we have made every effort to provide accurate, up-to-date information in this article, it is possible that the article may not contain the most recent legal or other information due to any changes in the legal environment. The information provided here does not create a client-lawyer relationship between the website visitor / article reader and Tivadar Law Firm. If you would like to ask for our assistance in a specific case, we are at your disposal via the contact details below.

 

[1] Directive (EU) 2019/2161 of the European Parliament and of the Council of 27 November 2019 amending Council Directive 93/13/EEC and Directives 98/6/EC, 2005/29/EC and 2011/83/EU of the European Parliament and of the Council as regards the better enforcement and modernisation of Union consumer protection rules

[2] Joint Decree No. 4/2009 NFGM-SZMM Section 2/A (2)

[3] Joint Decree No. 4/2009 NFGM-SZMM Section 2/A (5)

[4] Joint Decree No. 4/2009 NFGM-SZMM Section 2/A (3)

[5] Joint Decree No. 4/2009 NFGM-SZMM Section 2/A (4)

[6] The Act Schedule 35.

[7] The Act Schedule 32.

[8] The Act Section 6 (2) c)

[9] Preamble to EU Directive (53)

[10] Preamble to EU Directive (53)

[11] The Act Section 2 k)

[12] Government Decree No. 45/2014 Section 11/A. b)

[13] Government Decree No. 45/2014 Section 11/A. c)

[14] Government Decree No. 45/2014 Section 23. (5)-(9)