Certain terms and conditions used on a number of property marketing websites have been declared unfair and invalid by the Metropolitan Court, in the first ever public interest action brought by the Hungarian Competition Office.
The case concerned the general terms and conditions used by Experiment Entertainment Ltd. and Weltimmo S.r.o.
These companies had previously been investigated and fined HUF 6.6 million (c. €22,000) by HCO in 2010 for operating misleading practices towards consumers in various property marketing websites (www.ingatlandepo.com; www.ingatlanbazar.com and www.ingatlanbazar.net). These included:
- disregarding consumers' complaints
- misleading consumers about the status of certain advertisements
- conducting aggressive commercial practices, and
- withholding important information
This decision is currently under judicial review.
HCO also identified other potentially unlawful commercial practices within the companies' general terms and conditions that could not be addressed within its original investigation. It therefore filed a public interest action seeking a declaration that the terms and conditions were unfair and therefore invalid.
The Metropolitan Court ruled that the following provisions (but not the entire agreement) were unfair and invalid for all consumers who were subject to them:
- the provision stating that consumers could not terminate the agreement as long as they had not fulfilled the claims made against them (on the grounds that it infringed the requirement of good faith and honesty and freedom of contract)
- the provisions relating to unclear, confusing, excessive liquidated damages (again on the grounds of infringing the requirement of good faith and honesty);
- the provision allowing the companies to unilaterally interpret the "enforcement and invalidity clause" of the agreement (and, if any clause in the agreement was deemed unenforceable or invalid, to unilaterally determine the content of the new provision replacing it).
The companies were also ordered to publish an announcement about the invalidity of the provisions pursuant to the Court's judgment.
The decision is neither final nor binding and is subject to an appeal. However, it is likely to be relied on in any claims to be launched by consumers against the companies concerned in the near future.
Laws
Act LVII of 1996 on the prohibition of unfair market
practices and unfair competition
Act XLVII of 2008 on the prohibition of unfair commercial practices
towards consumers
Act IV of 1959 on the Civil Code
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 15/05/2012.
