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The Body of European Regulators for Electronic Communications (BEREC) found evidence of throttling of peer-to-peer file sharing and video streaming in Hungary.

The European Court of Justice has interpreted in 2014 that Internet Service Providers (ISPs) may be ordered by national courts to block customer access to a copyright-infringing website. This ruling aims to limit online piracy.

The new Hungarian Penal Code, which took effect in July 2013, includes provisions based on which websites can now be blocked in cases of unlawful online content. However, there is no evidence that the law has been applied to block any online content.

The Directive 2000/31/EC (E-Commerce Directive) is the legal basis governing the liability of Internet Services Providers (ISPs) in the EU Member States and includes a conditional safe harbor. The Directive covers any type of infringement of third-party rights, including intellectual and industrial property rights and personality rights.

The limitations on liability in the Directive apply to clearly delimited activities (mere conduit, caching and hosting) carried out by internet intermediaries, rather than to categories of service providers or types of information. While it was not considered necessary to cover hyperlinks and search engines in the Directive, the Commission has encouraged Member States to further develop legal security for Internet intermediaries.

Since not all Member States have transposed the relevant articles consistently, the national case law is divergent and leads to legal insecurity on an EU level.

Despite the almost literal transposition of Articles 12-14 of the E-commerce Directive, Hungary has adopted specific liability exemptions for search engines. The provision on search engines is to be sumsumed under the liability terms of host providers, since search engines only rank the information made available. Another difference is that in Hungary intermediary liability for hosting is restricted to damages and excludes criminal liability from the scope of the exemptions.

Under the Directive on Data Retention, operators were required to retain certain categories of traffic and location data (excluding the content of those communications) for a period between six months and two years and to make them available, on request, to law enforcement authorities for the purposes of investigating, detecting and prosecuting serious crime and terrorism. On 8 April 2014, the Court of Justice of the European Union (ECJ) declared the Directive invalid. However, not all national laws which implemented the Directive have been overturned.

The Hungarian Act on Electronic Communications requires 12 months retention for all data which are not calls. Hungary legislation is still in force despite the ECJ ruling.

For contractual service suppliers (CSS) and independent service suppliers (ISS), there are labour market tests required. However, under Article 7 of Act IV of 1991 a wide list of exemptions is given.

There are quotas that are annually delivered. However, if an interim permanent residence permit is granted to a foreign worker, he/she will receive equal treatment so that no quota, labour market tests or employment authorization is required.

It is reported that there are institutional obstacles that impede effective enforcement of copyright in Hungary. These include criminal evidentiary procedures that make proof of ownership especially burdensome and slow (requiring expert opinions for seized goods).

In the European Union, there is no general principle for the use of copyright protected material comparable to the fair use/fair dealing principle in the US. Directive 2001/29/EC defines an optional, but exhaustive set of limitations from the author´s exclusive rights under the control of the “three-step test”. This is a clause in the Berne Convention that establishes three cumulative conditions to the limitations and exceptions of a copyright holder’s rights. The Directive has been transposed by Member States with significant freedom.

The Hungarian Copyright Act contains all required exclusive rights set in the Directive. Additionaly, it incorporates a rather wide approach to authors’ exclusive rights under an open, non-exhaustive list of economic rights.

In the patent application process, foreigners must assign a Hungarian attorney.

The US Trade Representative office (USTR) reports that Hungary favors state-owned enterprises and companies close to the government over other participants in public tenders, and that corruption has a significant impact on public tenders.

Additionally, a December 2016 amendment of Hungary’s new public procurement regulations, enacted in November 2015, permits the Hungarian government to exempt companies using more than HUF 40 million (USD 140,000) of EU or Hungarian government funding from the public procurement requirement if the tendering “would not serve the most efficient use of public funds.”

It is reported that the right of access to public procurement is limited to regional trade agreement partners and members of the WTO’s Government Procurement Agreement.

It is reported that inadequate transparency in public procurement continues to be a significant problem in Hungary. In January 2012, a new Public Procurement Act came into force with the government claiming that it would speed procurement and improve transparency.

The new procurement law is criticized by transparency watchdogs because state enterprises and ministries can conduct procurement without a public announcement for the purchase of goods or services up to HUF 25 million (USD 112,000) or for construction valued at less than HUF 150 million (USD 675,000).

Transparency watchdogs have also noted that larger contracts that would have required a public bid are now broken up into smaller contracts that fall under the thresholds. Hungarian companies, state-owned enterprises or companies close to the government still appear to have an advantage over other players in public tenders.

The European Regulation No. 1042/2013 amending the Council Implementing Regulation No. 282/2011, declares that from January 2015, all supplies of telecommunications, broadcasting and electronic services will be taxable at the place where the customer belongs. These include, inter alia:
- images or text, such as photos, screensavers, e-books and other digitised documents e.g. PDF files;
- music, films and games, including games of chance and gambling games, and of programmes on demand;
- online magazines website supply or web hosting services distance maintenance of programmes and equipment;
- supplies of software and software updates advertising space on a website.

Both EU and non-EU suppliers have to register for VAT purposes and comply with the relevant obligations of the Member State where the customer is established, has his/her permanent address or usually resides. This may be burdensome as there are 81 VAT rates across the 28 EU countries and the rates may vary between 3% (Luxembourg) to 27% (Hungary) across member states. Furthermore, member states impose varying thresholds at which companies must begin paying VAT, ranging from EUR 0 to EUR 60,000.

As an alternative to obtaining multiple VAT registrations in each Member State where a supplier has a customer, affected suppliers may be able to opt to account for VAT across the EU via a a web-portal in the Member State in which they are identified. Hence, the system, known as the Mini One-Stop Shop (MOSS) scheme, allows taxable persons to avoid registering in each Member State of consumption.

In 2012, the Hungarian government introduced a tax on per-minute mobile usage. The tax is payable by mobile service providers at a rate of HUF 2 (approx. 0.01 USD) for phone calls and per SMS/MMS sent. It is payable by natural persons, legal persons or other organizations providing telecommunication services in Hungary. There is, however, a cap on the tax imposed, which is HUF 700 (approx. 2.22 USD) monthly per call number for individuals and HUF 5,000 (approx. 15.88 USD) monthly for non-individuals. This tax replaced a 6.5% tax on revenues which was introduced in 2010.

The EU Copyright Directive allows “fair compensation” for copyright owners. As a result, several Member States have imposed national levy systems.

In Hungary, the private copy remuneration is due to the authors of works, the performers of performances and the producers of films and sound recordings that are broadcast in radio programmes and television organisations, included in the programmes of the entities communicating their own programmes to the public by cable and released for distribution on audiovisual or audio carriers.
The following levies apply:
- CD-R, CD-RW, data CD-R/RW, audio CD: EUR 0.21 per unit.
- Minidisc: EUR 0.21 per unit.
- MP3-player: up to 28.96 euros
- Memory card: up to 10.94 euros
- USB Stick: up to 8.04 euros
- Mobile phones: up to 23.17 euros
- Storage capacity integrated into electronic devices for storing audio and/ or audiovisual content (e.g. video recorders with integrated memory, DVD recorders/burners with integrated memory, televisions with integrated memory, set top boxes and satellite receivers with integrated memory): up to 23.17 euros.