Fair market practices in compliance with the UCP Notice

The Self-regulatory Advertising Board (ÖRT), the Hungarian Competition Authority (GVH) and the Green Section of the Hungarian Marketing Association (MMSZ) have joined forces to organise a meeting for member companies, where participants discussed the European Commission’s Uniform Complaint Procedures (UCP) Notice. This was published last December and deals with unfair commercial practices.

GVH informs and educates

Csaba Balázs Rigó 
president
Hungarian Competition Authority

There were more than 50 participants at the online event, where GVH president Csaba Balázs Rigó stressed in his introduction that GVH’s goal isn’t imposing fines, but ensuring that companies comply with the law and there is fair market competition. To this end, the competition authority makes conscious efforts to get the most important messages through to both businesses and consumers, in an understandable fashion. One of the means to do this is publications in various themes, such as influencer marketing (2017), marketing to children (early 2020) and green marketing (end of 2020). Besides these, GVH also provides enterprises with guidance and counselling services.

Dr. Andrea Zenisek
head of the consumer protection section
GVH

Dr Andrea Zenisek, the head of GVH’s consumer protection section gave a presentation about the guidance for the Unfair Commercial Practices directive, which was modified in December 2021. The guidelines don’t make big changes, but they fine-tune the protection of consumers in online trade. These guidelines seek to put the directive into practice, raise the awareness of stakeholders and help businesses prepare for the new rules.

New and updated chapters

The guidance makes it clear the Unfair Commercial Practices directive is technology-neutral, so irrespective of the communication tool and channel used in the business-consumer (B2C) relation, it covers every digital device and content, e.g. online platforms such as marketplaces, application stores, search engines and B2C practices relying on algorithms.

As for influencer marketing, the consumer protection advertising rules in force apply to these. It is important to note that situations may occur – especially with children and other vulnerable groups of consumers – where influencer marketing qualifies as aggressive commercial practice, due to the high level of trust involved in the relationship between the influencer and their followers.

There is a whole chapter about video, mobile and online games. The very strict policy states that if there are purchasing options in an online game, the retailer must call the attention of consumers to this in advance. It is also laid down that in the case of payment with a virtual currency, the value must also be indicated in real currency.

The modified definitions reflect many years of GVH practices

The guidance also updates important definitions, for instance the definition of vulnerability is interpreted broadly, and it is explained that vulnerability can be dynamic and it depends on the given situation: not only the typical consumer groups (the elderly, sick people and children) but anyone can qualify as vulnerable as regards certain behaviours.

Dr Andrea Zenisek informed that EU member states had to implement the directive until November 2021, which duly happened, so on 28 May 2022 the amendment of Act 47 of 2008 on the Prohibition of Unfair Commercial Practices against Consumers entered into force as well. This amendment updates the definition of ‘product’, which now also covers digital services related contents, rights and obligations. It also brings in ‘ranking’ as a new concept and defines what an ‘online marketplace’ is.

Competition authority: no consideration with blacklist cases

Practices related to consumer ratings, the transparency of search results and the reselling of tickets to various events to consumers now qualify as blacklist cases in the amended act mentioned above – this means that cases like this require no further analysis to determine the breach of law. In such cases GVH doesn’t consider whether the consumers affected are vulnerable or not, whether they were misled in an important product characteristic or not, or whether the given commercial practice is likely to deceive consumers or not: in such cases the Hungarian Competition Authority states without hesitation that there has been a breach of law. //