Hungary: Direct Marketing From The Perspective Of Hungarian Data Protection Law

In this article, we provide a brief overview of the data protection implications of direct marketing carried out in Hungary through mail, electronic correspondence (email, fax and sms) and, respectively, telephone.

The major acts governing the main rules concerning the use of certain personal data for direct marketing purposes are as follows:

1. Act no CXIX of 1995 on the Use of Name and Address Information Serving the Purposes of Research and Direct Marketing (the "Kkt.");
2. Act no CVIII of 2001 on Electronic Commerce and on Information Society Services (the "E-Commerce Act");
3. Act no C of 2003 on Electronic Communications (the "E-Communications Act");
4. Act no XLVIII of 2008 on the Basic Requirements and Certain Restrictions of Commercial Advertising Activities (the "Commercial Advertisement Act"); and
5. Act no CXII of 2011 on the Right of Informational Self-Determination and on Freedom of Information (the "Information Act").

The acts mentioned under clauses (i)-(iv) above mainly address the management of personal data which are necessary for contacting the addressees. Management of such personal data which extend beyond the scope of data necessary for contacting the addressee falls within the scope of the Information Act and the prior informed consent of the person concerned is required. The below has to be interpreted accordingly.

I. GENERAL RULE (SECTION 6 (1) OF THE COMMERCIAL ADVERTISEMENT ACT) AND EXCEPTION TO THE RULE (SECTION 6 (4) OF THE COMMERCIAL ADVERTISEMENT ACT)

As per the Commercial Advertisement Act, prior consent is always needed (opt-in principle) unless a specific act provides otherwise. In this regard, Section 6 (1) of the Commercial Advertisement Act provides that, unless otherwise provided for by specific other legislation, advertisements may be conveyed to natural persons by way of direct contact (direct marketing), such as through electronic mail or equivalent individual communications - subject to the exception referred to as "addressed advertisement material" -, only upon the expressed, explicit prior consent of the person to whom the advertisement is addressed.

As per Section 6 (4) of the Commercial Advertisement Act, addressed advertisement material may be sent by mail, in accordance with Act CI of 2003 on the Post, to natural persons within the framework of direct marketing in the absence of the prior express consent of the person to whom it is addressed; the advertiser and the advertising service provider, however, are required to provide facilities for the person to whom the advertisement is addressed that allow them to unsubscribe at any time from receiving further advertisement material, freely and at no cost to the addressee. Such unsolicited advertisement material may not be sent by way of direct marketing to the person affected.

Section 6 (8) of the Commercial Advertisement Act provides that the communication sent to request the statement of consent mentioned in Section 6 (1) may not contain any advertisement, other than the name and description of the company.

We note that in the case of any doubt as to whether consent has been given, it has to be deemed ex lege that no consent has been given. Furthermore, when it comes to a legal dispute, the burden of proof lies with the data manager; in other words, the data manager has to prove that data management has taken place lawfully. Taking this into account, it is advisable to get the consent of the person concerned in a way which means that the data manager can later prove that consent has been given (e.g. in writing, via phone, email or the Internet).

We note that the obligation to get prior consent applies if the addressee of the material is a private individual. The situation is quite "interesting" if the material is sent to a legal entity in a way that the material is actually received by a private individual (e.g. via the official email address of a concrete person, such as xy@company.hu). In this case, it has to be examined who the real addressee of the parcel is. If the company is the actual addressee and the sender has lawfully obtained the contact details (e.g. through a public directory or the company's website), the material may be sent without prior consent. However, if the private individual is the actual addressee, the provisions of the Commercial Advertisement Act must be complied with.

Exception to the rule laid down in Section 6 (1) above ("addressed advertisement material")

We note that Section 6 (4) referred to above contains an exception to the main rule laid down in Section (1) above, which is referred to as sending a so-called "addressed advertisement material". Addressed advertisement material is defined as follows in Act no CI on the Post:

Under Governmental Decree no. 79/2004 (IV.19.), a material is deemed to be addressed to a greater circle of addressees if the sender mails at least 500 such parcels.

If the requirements laid down in Section 6 (4) are met, no prior consent is needed; however, the entity sending the material is required to ensure that the addressee may unsubscribe (the opt-out rule). This rule only provides the opportunity to send out the parcel without prior consent. However, there must still be a valid legal ground for data management.

We note that Act no CI of 2003 on the Post will be replaced by a new act (Act no CLIX of 2012 on Postal Services) from 1 January 2013. We note that this new act does not contain the definition of "addressed advertisement material". Nor does Governmental Decree no 335/2012 (XII.4.), which is replacing Governmental Decree no 79/2004 (IV.19.), contain such a definition. We are not aware of any law that would contain such a definition from 1 January 2013. Thus, taking this uncertainty into account, after 1 January 2013, it is highly advisable to follow the rules laid down in Section 6 (1) of the Commercial Advertisement Act, i.e. to obtain the prior express consent of the persons concerned. This is because one cannot tell how the authorities and courts will interpret the "emptied" Section 6 (4) of the Commercial Advertisement Act. Of course, it may be that the law-maker will pass laws before 1 January 2013 with a view to filling this gap.

II. SPECIAL RULES

There are three acts that contain specific rules as opposed to the above-mentioned general rule laid down in Section 6 (1) of the Commercial Advertisement Act; namely, the Kkt. (concerning direct marketing by mail), the E-Commerce Act (concerning electronic direct marketing) and the E-Communications Act (concerning telemarketing, i.e. marketing by phone). Please find below a brief description of the specific rules below.

A. The Kkt. (Direct Marketing by Mail)

As per Section 3 (1) of the Kkt., scientific researchers and public opinion survey and market research organizations, for the purposes of initiating and maintaining communication, and direct marketing organizations solely for the purposes of the compilation of mailing lists or - where Section 6 (4) of the Commercial Advertisement Act applies - marketing lists, or the organizations hired by the previously-mentioned organizations to receive and process data, may gather and use name and address information from the following sources:

1. the data of the person concerned with whom the data-using organization has previously been in contact (customer, sponsor);
2. information from any legitimate collection of data compiled for the purposes of publication, name and address listing and publication - such as phone books or statistical name listing -, provided that the persons concerned were informed at the time of the data gathering and were given confirmation of the possibility of such data being used for purposes other than originally intended, and of their right to prohibit it;
3. receiving data from other persons or organizations involved in the same line of business, if the person concerned was not opposed to, or did not prohibit the said data from being surrendered after being informed in advance;
4. by requesting data from the register under the scope of Act LXVI of 1992 on Keeping Records on Personal Data and the Address of Citizens by complying with the conditions specified in the said act, providing that the citizen did not prohibit his data from being published as per the said act.

If the parcel sent qualifies as an addressed advertisement material as described above, the sources listed under II A. a)-d) may be used for preparing a marketing list and then the marketing material may be sent to the addressees appearing on the list without their prior consent (opt-out rule).

If the parcel sent does not qualify as an addressed advertisement material (for instance, because less than 500 are mailed), the sources listed under II A. a)-d) may be used for preparing a mailing list and then consent may be asked for from the persons appearing on the list (opt-in rule).

B. Electronic Direct Marketing

The E-Commerce Act accepts the opt-in principle and applies to e.g. emails and sms.

Under Section 13/A of the E-Commerce Act, service providers may manage data relating to the use of its services, in particular for improving its efficiency in providing the service, for the transmission of electronic communications or other targeted content to the recipient of the service, or for market research (but only if the reason for data management is indicated in advance and subject to the prior consent of the recipient of the service (opt-in rule)). The recipient of the service must be given the opportunity before and after subscribing to the information society service to prohibit the management of his data. The data may not be linked to the identification data of the recipient of the service and may not be disclosed to third persons without the prior consent of the recipient of the service.

As per Section 14/A (1) of the E-Commerce Act, the following information has to be presented clearly and unambiguously in connection with any electronic communication:

1. it shall be clearly identifiable as such immediately when it is made accessible for the recipient of the service;
2. the electronic advertiser, or the person on whose behalf the electronic communication is transmitted, by way of electronic mail or equivalent individual communications, shall be clearly identifiable immediately when it is made accessible for the recipient of the service;
3. promotional offers, such as discounts, premiums and gifts, shall be clearly identifiable as such and include the conditions which are to be met to qualify for them;
4. promotional competitions or games shall be clearly identifiable as such and include the conditions for participation.

Section 6 (8) of the Commercial Advertisement Act as described above does not apply to electronic marketing, i.e. no such request may be lawfully sent to the addressee electronically.

C. Telemarketing

Personal Calls

Section 162 (2) of the E-Communications Act provides that no call serving the purposes of direct marketing, information, public-opinion polling or market research may be placed to a subscriber who has declared that he/she does not wish to receive any such call; this prohibition also applies to direct marketing techniques falling outside the scope of Section 6 of the Commercial Advertisement Act, and to any communication that is not treated as an advertisement under the Commercial Advertisement Act. This means that a subscriber may be called in the absence of any objection to receiving such calls (opt-out rule). The person concerned may object to data management. In the telephone directory, a specific sign indicates if a subscriber has not consented to the use of his phone number for such purposes.

Automated Calls

As for automated calls, Section 162 (1) of the E-Communications Act accepts the opt-in principle when it provides that the use of an automated calling system free of any human intervention, or any other automated device for initiating communication with prospective subscribers, for the purposes of direct marketing, information, public-opinion polling and market research in respect of a subscriber, is subject to the prior consent of the subscriber (opt-in principle).

SUMMARY

General rule:

Prior consent is always needed (opt-in principle) unless a specific act provides otherwise.

Specific rules:

Direct marketing by mail

1. If the parcel sent qualifies as an addressed advertisement material as described above, the sources listed under II A. a)-d) above may be used for preparing a marketing list, and then the marketing material may be sent to the addressees appearing on the list without the recipients' prior consent (opt-out rule).
2. If the parcel sent does not qualify as an addressed advertisement material (for instance, because less than 500 are mailed), the sources listed under II A. a)-d) above may be used for preparing a mailing list and then consent may be asked for from the persons appearing on the list (opt-in rule).

Upon contacting the relevant individual, the data manager is required to inform the person concerned of the fact that the supplying of data is voluntary and that the person concerned has the right to request that his data should not be used for the designated purpose or for portions of such a purpose. He should also be informed of the fact that he is not required to co-operate.

Electronic direct marketing (email, fax, sms)

3. Sending direct marketing material through email, fax or sms is subject to the prior consent of the recipient (opt-in rule). Consent may not be asked for via email, fax or sms.

The recipient of the service must be given the opportunity, before and after subscribing to the information society service, to prohibit management of his data. Information on this right has to be given.

Telemarketing

4. As for personal calls, a subscriber may be called in the absence of any objection to receiving such calls (opt-out rule). In the telephone directory, a specific sign indicates if a subscriber has not consented to the use of his phone number for such purposes. If the person has objected to receiving such calls, he may not be contacted.
5. As to automated calls, the call is subject to the prior expressed consent of the subscriber (opt-in principle). If the relevant individuals have consented to receiving materials, they must be given the right to withdraw such consent at any time.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.