Webshops to be seriously fined and “black listed” for breaking rules

From January 1, 2017, the level of fines to be imposed on companies operating webshops will radically increase and the ministry will manage a public database on the webshops and on their operators which have committed serious violations. The bill has been already submitted to the Parliament.

As a consequence of the numerous complaints by consumers in regards to webshops the level of the applicable fine on online retailers will increase in order to deter them from further breaches. The new legislation will affect primarily micro, small and medium e-commerce companies as the minimum fine will increase from HUF 15,000 to HUF 200,000 and the top will increase from HUF 500,000 to HUF 2M for repeated violations.

The minimum fine imposed on the immediately punishable multinational enterprises will also increase; however the maximum will not change as it would remain HUF 500M. It is not planned either to amend the rules on violations affecting large number of consumers or on violations offending health or physical safety in which cases the fines can already be way higher: 5% of the net annual turnover for SMEs and 2 billion Hungarian Forints for multinational companies.

Another way how webshops will be forced to operate properly: besides increasing the level of the fines, the ministry in charge for consumer protection will manage an online public database. In the database decisions by the consumer protection, Competition Authority and courts will be available that were rendered for serious violations in online commerce. In addition to this, the database will contain, probably for 2 years, information on enterprises and their websites in question together with a search field so that consumers may get a line on the retailer’s former violations before shopping.

Click here to find out more on the bill no. T/12733

To learn more, please contact our experts at Ecovis Hungary Legal.