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T H E P R I M E R U S P A R A D I G M
Consumer Protection in the Digital Age
In the past few years, the Hungarian
Competition Authority (HCA) has become
a dynamic authority, which is committed
to effectively enhancing competition,
particularly in new cases. It has also
concentrated on consumer protection,
most recently in digital markets. As a
result, it has devoted significant resources
to protecting consumer interests, which
has somewhat slowed down enforcement
in other areas. However, the HCA's newly
discovered focus has also led it to issue
groundbreaking decisions.
Strategy Paper
The HCA recently published a strategy
paper summarizing its views on consumer
protection in the digital age. The paper
indicates that the HCA will continue
to follow the European Commission's
guidance in this respect. It highlights
the measures, which the HCA deems
necessary to protect consumers and keep
up with the developments central to this
process.
As a basic principle, the HCA states
that consumers are highly vulnerable
to certain tech giants and other online
service providers. This is due to the fact
that the overwhelming data flow inherent
to the emerging digital age has rendered
the traditional consumer protection
approach meaningless.
The HCA recognized that algorithms
and artificial intelligence are likely to
become highly relevant in the foreseeable
future and urged competition authorities
to prepare to respond accordingly. The
HCA is of the opinion that consumers
with a limited understanding or interest
in technology must both remain protected
and benefit from new inventions. This
goal should stay at the forefront of future
activities of competition authorities
globally.
According to the HCA, to cope
with the new dynamics of the market,
authorities and consumers need a new
approach to consumer protection issues
and transactional decisions.
Strategy
The HCA has defined its most important
objectives as follows:
Market analysis: The HCA may use
tools to map a market before deciding
whether an investigation into a certain
conduct is necessary. One such tool is
market analysis, which the HCA intends
to employ to better understand the
functioning of comparison tools.
Fostering compliance: The HCA
thinks that the problems posed by the
digital markets may be best solved
by proceedings, which aim to foster
compliance rather than impose penalties.
These proceedings mainly try to provide
a solution for prevalent topics. In
addition to traditional purposes, their
goal is to function as an exemplary case
or guidance. While these cases may
also involve penalties, these are not
of utmost importance. The HCA has
already initiated proceedings using this
approach. These cases involved Instagram
celebrities with paid content and online
accommodation booking sites, among
others.
Prioritizing novel cases: The HCA
has prioritized the issues pertaining
to consumer protection in the digital
markets. In particular, the HCA intends to
address cases, which raise novel questions
and raise problems, which did not exist or
were not addressed prior to the digital age.
The HCA intends to pilot international
actions if necessary and has indicated that
it will not shy away from leading the way
in this regard. The HCA has stressed that
it intends to introduce at least one novel
proceeding every year.
Proceedings against global players:
According to the HCA, these cases may
require an assessment of the overarching
effects of the specific conduct, including
those which occur outside Hungary.
Therefore, the HCA considers it necessary
to take into account the approach of other
authorities, especially those of European
Europe, Middle East & Africa ­ Hungar y
Zsolt Füsthy, of Füsthy & Mányai Law Office, is
a specialist in environmental law and European
law. He also practices in the areas of mergers
and acquisitions, corporate law, international
banking law and securities matters, labor and
employment, antitrust/competition law, contract
law and real estate law.
Füsthy & Mányai Law Office
Lajos utca 74-76.
Budapest, Hungary H-1036
+36 1 454 1766 Phone
zfusthy@fusthylawoffice.hu
fusthylawoffice.hu
Zsolt Füsthy