Regulation of Direct Marketing in Hungary

Direct marketing activity in Hungary is regulated by the Act XLVIII of 2008 on the Essential Conditions of and Certain Limitations to Business Advertising Activity (“Advertising Act”), by the Act No CVIII of 2001 on Certain Issues of Electronic Commerce Services and Information Society Services (“Act on E-Commerce”) as well as by the provisions of the Act CXIX of 1995 on the Use of Name and Address Information Serving the Purposes of Research and Direct Marketing (hereafter “Direct Marketing Act”).

Under the provisions of the Advertising Act “business advertising” has been broadly defined as to include any kind of communication, information or presentation method aimed at the promotion of sale or the use of products or services, or popularising the name, brand or activity of an undertaking or increasing awareness of goods or brands with the aforementioned purpose. In contrast, the definition of “electronic advertising” laid down in the Act on E-Commerce is much broader than the notion of “business advertising”, since the former term also includes communications related exclusively to the achievement of a social objective. It follows that political advertising as well as charity solicitations fall within this category even if the direct or indirect aim of promotion of sale of products and services could not be established. However, it is remarkable that private communications (namely the information exchange between private individuals) are generally excluded from the scope of the regulation of electronic advertisements. The Act on E-Commerce also lays down that permission e-mails (e-mails asking for the consent of the individual for sending advertising messages) also constitute electronic advertising, therefore such communications are hence covered by the provisions regulating electronic direct marketing.

The Advertising Act provides that direct marketing messages – independently from the method of communication and including broadly postal mail, e-mail, facsimile, SMS, MMS etc – cannot be sent to natural persons as a general rule, unless prior, express, specific, voluntary, informed consent has been obtained from such recipient/subscriber (”opt-in”) in compliance with the provisions of the Data Protection Act. Accordingly, the Hungarian Act on Unfair Commercial Practices (the domestic implementation of the UCP Directive 2005/26/EC) blacklists unsolicited (electronic) marketing in relation to consumers under No. 26 of the Annex of the Act. In case of legal entities, opt-out consent applies, however, B2B communications are not recognised in the direct marketing context.

According to the position of the Hungarian Data Protection Commissioner, data processing for marketing purposes shall always comply with the provisions of the Data Protection Act. This means in practice that the individual shall be informed in detail on every aspect of the use of its contact information for marketing purposes. In particular: unambiguous and detailed information shall be provided relating to the purpose and legal basis of the data processing; duration of data processing and detailed information shall also be provided on the rights and available legal remedies of the individual. It must be noted that in case of the collection of the name and address of the individuals, data processing shall also comply with the Direct Marketing Act which requires in practice the implementation of a written privacy notice on the part of the sender.

Since the E-Commerce Act states that so called “permission e-mails” are also prohibited unless expressly consented by the individual, practically, the double opt-in requirement should be complied with in the case of electronic communications addressed to private individuals. However, provided that the contact information of such individual has been obtained in connection with the sale of a product or service (soft opt-in), only a permission e-mail could be sent to such natural persons in line with the provisions of the Direct Marketing Act. Accordingly, if the individual does not respond to such inquiry (permission e-mail), further communications and permission e-mails must not be sent to such individuals.

The Advertising Act lays down special formal requirements with respect to the consent to be obtained, further, subsequent opt-outs must be always honoured, free of charge, both in the case of natural persons, as well as in the case of legal entities without any formal boundaries. If the home address of the natural person was also collected, the Direct Marketing Act also requires data controllers to keep such collected information up-to-date and accurate by being in contact with the data subject or by regular confirmation of such data from the Hungarian personal data and address register in each six month period of keeping such records. Further, according to the Direct Marketing Act, the sender of marketing messages shall register its data processing activity relating to direct marketing into the registry of the Hungarian Data Protection Authority before the commencement of such operations.

Regarding the use of automatic calling machines, the Act on Electronic Communications provides that the prior consent of the subscriber (both natural and legal persons) shall be obtained to such communications. In the case of unsolicited phone calls, the consent requirements of the Advertising Act generally apply to natural person addressees (”opt-in”), whereas, the Act on Electronic Communications provides that communications serving the purpose of marketing (and not addressed to natural persons) as well the provision of information could not be transmitted to subscribers who made a statement that he/she did not wish to receive such communications (“opt-out”).

The Advertising Act lays down that each marketing message addressed to natural persons must clearly and conspicuously indicate to such recipients the address and other contact information of the sender and where opt-out requests may be sent by the recipient if the individual does not wish to receive further messages.

In the case of marketing materials sent by postal mail to natural persons, opt-out consent applies unless the individual subscribes to the Robinson list maintained by the Office of Public Electronic Service. The postal material must also contain a return envelope for sending the notice to unsubscribe in the form of registered mail with prepaid postage and a delivery address.

It must be added, that it is also fairly limited under the provisions of the Direct Marketing Act what data sources might be used to obtain the contact data of natural persons for contact establishment for marketing purposes. If the name, home address and e-mail contact information of a natural person customer was obtained in connection with the sale of a product or provision with service, only a permission message may be sent to such natural persons in line with the provisions of the Direct Marketing Act, which may contain a description of the sender company but no advertising. Further data sources include business contacts as well as phone books or statistical name listings (provided that such data subjects were informed at the time of the data gathering and information was provided on the possibility of such data being used for purposes other than originally intended, and of their right to prohibit it). Contact data may be obtained from other persons or organisations involved in the same line of business, if the data subject did not oppose it, or he/she did not prohibit the transfer of such contact data, and the transferee provided notice on this. The contact information of natural person customers may be obtained from third persons only if this person was involved in the same line of business as the data controller and provided that the transferor and transferee conclude a written data transfer agreement regulating the use of such customer data.