Data Protected - Hungary

Contributed by Kinstellar

Last updated November 2018

General | Data Protection Laws

National Legislation
National Supervisory Authority
Scope of Application
Personal Data
Sensitive Personal Data
Data Protection Officers
Accountability and Privacy Impact Assessments
Rights of Data Subjects
Security
Transfer of Personal Data to Third Countries
Enforcement

ePrivacy | Marketing and cookies

National Legislation
Cookies
Marketing by E-mail
Marketing by Telephone

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General | Data Protection Laws

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National Legislation

General data protection laws

The General Data Protection Regulation (EU) (2016/679)(“GDPR”).

Hungary is currently subject to Act CXII of 2011 on the Right of Informational Self-Determination and on Freedom of Information (the “Data Protection Act”). The Data Protection Act was amended on 26 July 2018 to implement the changes of the GDPR. This summary is solely focused on the requirements set out by the GDPR and the Data Protection Act.

Entry into force

The GDPR is applicable since 25 May 2018.

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National Supervisory Authority

Details of the competent national supervisory authority

The National Data Protection and Freedom of Information Authority is the supervisory authority in Hungary.

The National Data Protection and Freedom of Information Authority (the “Authority”)

H-1530 Budapest

Pf. 5.

Hungary

naih.hu

The Authority represents Hungary on the European Data Protection Board.

Notification or registration scheme and timing

There is no obligation to notify regulators of any processing under the GDPR. 

Exemptions to notification

Not applicable.

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Scope of Application

What is the territorial scope of application?

The GDPR applies the processing of personal data in the context of the establishment of a controller or processor in the EU.

It also contains express extra-territorial provisions and will apply to controllers or processors based outside the EU that: (i) offer goods or services to individuals in the EU; or (ii) monitor individuals within the EU. Controllers and processors caught by these provisions will need to appoint a representative in the EU, subject to certain limited exemptions.

Is there a concept of a controller and processor?

Yes. The GDPR contains the concept of a controller, who determines the purpose and means of processing, and a processor, who just processes personal data on behalf of the controller.

Both controllers and processors are subject to the rules in the GDPR, but the obligations placed on processors are more limited. 

Are both manual and electronic records subject to data protection legislation?

Yes. The GDPR applies to both electronic records and structured hard copy records.

Are there any national derogations?

The GDPR does not apply to law enforcement activities which are instead subject to the Law Enforcement Directive. The GDPR also does not apply to areas of law that are outside the scope of Union law, such as national security, and does not apply to purely personal or household activity.

The Data Protection Act contains a number of additional national derogations, including for law enforcement, national security, and home defence.

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Personal Data

What is personal data?

Personal data is information relating to an identified or identifiable natural person.

This is a broad term and includes a wide range of information. The GDPR expressly states it includes online identifiers such as IP addresses and cookie identifiers.

Is information about legal entities personal data?

No. However, information about sole traders and partnerships is likely to be personal data.

What are the rules for processing personal data?

All processing of personal data must comply with all six general data quality principles. Personal data must be: (a) processed fairly and lawfully; (b) collected for specific, explicit and legitimate purposes and not processed in a manner incompatible with those purposes; (c) adequate, relevant and not excessive; (d) accurate and, where necessary, up to date; (e) kept in an identifiable form for no longer than necessary; and (f) kept secure.

The processing of personal data must also satisfy at least one condition for processing personal data. These conditions are that the processing is: (a) carried out with the data subject’s consent; (b) necessary for the performance of a contract with the data subject; (c) necessary for compliance with a legal obligation; (d) necessary in order to protect the vital interests of the data subject; (e) necessary for the public interest or in the exercise of official authority; or (f) necessary for the controller’s or recipient’s legitimate interests, except where overridden by the interests of the data subject.

These rules are almost identical to the core requirements for processing personal data in the Data Protection Directive.

Are there any formalities to obtain consent to process personal data?

Obtaining consent will become much harder under the GDPR. 

To be valid, consent must be in clear and plain language and, where sought in writing, separate from other matters. Consent must be based on affirmative action so pre-ticked boxes are not acceptable. Consent might not be valid if: (i) there is any detriment to the data subject for refusing; (ii) there is an imbalance of power; (iii) consent for multiple purposes is bundled together; or (iv) the consent is a condition of entering into a contract. Finally, consent can be withdrawn at any time.

In practice, other processing conditions should be relied on where possible. Consent will only be an appropriate processing condition if the individual has a genuine choice over the matter, for example, whether to be sent marketing materials. 

The Article 29 Working Party has issued Guidelines on Consent (WP259).

Are there any special rules when processing personal data about children?

Consent from a child in relation to online services will only be valid if authorised by a parent. A child is someone under 16 years old, though Member States may reduce this age to 13.

The Data Protection Act does not reduce the age at which a child can provide a valid consent to online services.

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Sensitive Personal Data

What is sensitive personal data?

Sensitive personal data is personal data consisting of racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership, genetic data, biometric data, data concerning health or data concerning a natural person’s sex life or sexual orientation.

The inclusion of genetic and biometric data is new and an extension to the types of sensitive personal data in the Data Protection Directive.
Information about criminal offences is dealt with separately and is subject to even tighter controls.

Are there additional rules for processing sensitive personal data?

Sensitive personal data may only be processed if a condition for processing sensitive personal data is satisfied. A condition arises where the processing: (a) is carried out with the data subject’s explicit consent; (b) is necessary for a legal obligation in the field of employment law; (c) is necessary to protect the vital interests of the data subject or another person where the data subject is unable to give consent; (d) is carried out by a non-profit-seeking body and relates to members of that body or persons who have regular contact; (e) relates to data made public by the data subject; (f) is necessary for legal claims; (g) is for reasons of substantial public interest under EU or Member State law; (h) is necessary for healthcare reasons; (i) is necessary for public health reasons; or (j) is necessary for archiving, scientific or historical research purposes or statistical purposes and is based on EU or Member State law.

The Data Protection Act does not set out any further requirements for processing sensitive personal data.

Are there additional rules for processing information about criminal offences?

It is only possible to process information about criminal convictions or offences if: (a) it is carried out under the control of official authority; or (b) when the processing is authorised by EU or Member State law.

Personal data processed for law enforcement purposes must be categorised by the controller or the processor as follows: (i) personal data where there are reasonable grounds to suspect an individual has or will committed a crime or a criminal offence; (ii) personal data of individuals whose criminal liability has been established by a final judgment; (iii) personal data of individuals who have been a victim of a crime or an offence or are suspected to be a victims of crimes or offences; or (iv) personal data of individuals that might be linked to crimes or offences, and especially who might be witnesses in criminal proceedings, or who might be in possession of information related to crimes or offences, or who are connected to people in the first two categories or might be related to them. The controller or the processor must also clearly distinguish facts related to a person from subjective evaluations.

Are there any formalities to obtain consent to process sensitive personal data?

Consent to process sensitive personal data must be explicit. The general restrictions on consent, set out above, will also apply. This suggests a degree of formality, such as ticking a box containing the express words “I consent”. It is unlikely explicit consent could be obtained through a course of conduct.

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Data Protection Officers

When must a data protection officer be appointed?

Both controllers and processors must appoint a data protection officer if: (i) they are a public authority; (ii) their core activities consist of regular and systematic monitoring of data subjects on a large scale; or (iii) their core activities consist of processing sensitive personal data on a large scale (including processing information about criminal offences).

In addition to the requirements of the GDPR, data protection officers must be appointed by a controller or processor if it performs the tasks for the state or the local government or where required by law. Data protection officers must also be appointed where required by any other national law.

What are the duties of the data protection officer?

The data protection officer must be involved in all data protection issues and cannot be dismissed or penalised for performing their role. The data protection officer must report directly to the highest level of management. 

The Article 29 Working Party has issued Guidelines on Data Protection Officers (WP243).

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Accountability and Privacy Impact Assessments

Is there a general accountability obligation?

The GDPR adds a new general accountability obligation under which you must not only comply with these new rules, but also be able to demonstrate you comply with them. This means ensuring suitable policies are in place supported by audit and training.

Are privacy impact assessments mandatory?

A privacy impact assessment must be conducted where “high risk” processing is carried out. This includes: (a) systematic and extensive profiling that produces legal effects or significantly affects individuals; (b) processing sensitive personal data on a large scale; and (c) systematic monitoring of a publicly accessible area on a large scale (e.g. CCTV).

The Article 29 Working Party has subsequently issued Guidelines on Data Protection Impact Assessments (WP 248). It suggests there are nine criteria to consider to determine whether to conduct a privacy impact assessment, and that an assessment should be made if two or more of those criteria are met. This is arguably wider than the criteria set out in the paragraph above. 

According to the Data Protection Act, the Authority can publish a list of data processing activities which are presumed to be subject to, or not to be a subject to, a privacy impact assessment. If personal data processing is “mandatory” under Hungarian law, then the privacy impact assessment must be carried out by the legislator when that legislation is passed.

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Rights of Data Subjects

Privacy notices

A controller must provide data subjects with a privacy notice setting out how the individual’s personal data will be processed. The privacy notice must contain the enhanced transparency information.

The Article 29 Working Party has issued Guidelines on Transparency (WP260).

In Hungary, there is no explicit obligation to provide this information in Hungarian, though this is highly advisable, as it is unlikely that the majority of the data subjects have a command of foreign languages.

Rights to access information

Data subjects will have a right to access copies of their personal data by making a written request to the controller. The initial request is free, though a charge can be made for subsequent requests. Controllers can refuse the request if it is manifestly unfounded or excessive. The response must be provided within a month, though this can be extended by two months if the request is complex. 

Rights to data portability

Data subjects will also have a right to data portability where the condition for processing personal data is consent or the performance of a contract. It entitles individuals to obtain any personal data they have “provided” to the controller in a machine-readable format. Individuals can also ask for the data to be transferred directly from one controller to another. There is no right to charge fees for this service.

The Article 29 Working Party has issued Guidelines on data portability (WP242).

Right to be forgotten

A data subject can ask that their data be deleted in certain circumstances. However, those circumstances are relatively limited, for example where the processing is based on consent, that consent is withdrawn and there are no other grounds for processing. Even where the right does arise, there are range of exemptions, for example where there is a legal obligation to retain the data. 

Objection to direct marketing

A data subject can object to their personal data being processed for direct marketing purposes at any time. This includes the processing of their personal data for profiling purposes.

Other rights

The GDPR contains a range of other rights, including a right to have inaccurate data corrected. There is also a right to object to processing being carried out in the performance of a public task or under the legitimate interests condition.

Finally, there are controls on taking decisions based solely on automated decision making that produce legal effects or similarly significantly affects the data subject. The Article 29 Working Party has issued Guidelines on Automated Decision Making and Profiling (WP251).

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Security

Security requirements in order to protect personal data

The GDPR contains a general obligation to implement appropriate technical and organisational measures to protect personal data.

In addition, controllers and processors must ensure, where appropriate: (i) the pseudonymisation and encryption of personal data; (ii) the ability to ensure the ongoing confidentiality, integrity, availability and resilience of its information technology systems; (iii) the ability to restore the availability and access to personal data in a timely manner in the event of a physical or technical incident; and (iv) a process for regularly testing, assessing and evaluating the effectiveness of technical and organisational measures for ensuring the security of the processing. 

Specific rules governing processing by third party agents (processors)

A controller must ensure that any processor it instructs will ensure adequate security for personal data and otherwise meet the requirements of the GDPR.

The controller must have written contracts with its processor containing the enhanced processor clauses.

Notice of breach laws

A personal data breach must be notified to the relevant supervisory authority unless it is unlikely to result in a risk to data subjects. The notification must, where feasible, be made within 72 hours. If the personal data breach is a high risk for data subjects, those data subjects must also be notified. 

The Article 29 Working Party has issued Guidelines on Personal Data Breach Notification (WP250).

Specific notice of breach laws apply to the electronic communications sector under the Privacy and Electronic Communications Directive

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Transfer of Personal Data to Third Countries

Restrictions on transfers to third countries

The GDPR contains a restriction on transborder dataflows. Transfers can take place if it: (i) is to a whitelisted country; (ii) is made pursuant to a set of Model Contracts; (ii) is made pursuant to binding corporate rules; (iv) is made to an importer who has signed up to an approved code or obtained an approved certification; or (v) is otherwise approved by the relevant supervisory authority.

Transfers are also possible if an individual derogation applies. These derogations allow a transfer if it: (i) is made with the data subject’s explicit consent; (ii) is necessary for the performance of a contract with, or in the interests of, the data subject; (iii) is necessary or legally required on important public interest grounds, or for legal claims; (iv) is necessary to protect the vital interests of the data subject; (v) is made from a public register; or (vi) is made under the so-called minor transfer exemption.

The position is broadly the same as under the Data Protection Directive. One notable change is the introduction of the so-called minor transfer exemption, though that exemption will be very hard to rely on in practice.

The European Data Protection Board has issued Guidelines on derogations applicable to international transfers (2/2018).

Notification and approval of national regulator (including notification of use of Model Contracts)

In general, there is no need for prior approval from a supervisory authority. However, this depends on the justification for the transfer. 

For example, there will be no obligation to get approval for the use of Model Contracts (though it is possible some supervisory authorities may want to be notified of their use). In contrast, it will be necessary to get approval to rely on binding corporate rules, and the supervisory authority must be informed of transfers made using the minor transfers exemption.

Use of binding corporate rules

The GDPR places binding corporate rules on a statutory footing. It will be possible to obtain authorisation from one supervisory authority that will cover transfers from anywhere in the EU.

In Hungary, the Authority has approved binding corporate rules from, among others, Sanofi, IBM, Mastercard, Siemens, Intel, Johnson Controls, American Express, Citigroup, E&Y, Philips, BP, GE, Continental Group and the Hewlett Packard Enterprise.

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Enforcement

Fines

The GDPR is intended to make data protection a boardroom issue. It introduces an antitrust-type sanction regime with fines of up to 4% of annual worldwide turnover or €20m, whichever is the greater. These fines apply to breaches of many of the provisions of the GDPR, including failure to comply with the six general data quality principles or carrying out processing without satisfying a condition for processing personal data.

A limited number of breaches fall into a lower tier and so are subject to fines of up to 2% of annual worldwide turnover or €10m, whichever is the greater. Failing to notify a personal data breach or failing to put an adequate contract in place with a processor fall into this lower tier.

The Article 29 Working Party has issued Guidelines on administrative fines (WP253).

Imprisonment

Under the Hungarian Criminal Code, it is an offence, punishable by imprisonment of up to a year, to engage in the unauthorised and inappropriate processing of personal data. This includes the failure to take measures to ensure the security of personal data or to notify the data subject if required and thereby imposing significant injury to his or her interests.

If the unlawful data processing involves sensitive personal data, the sentence imposed could be extended to two years’ imprisonment and, where it is committed by a public official or in the course of discharging a public duty, may be extended to three years.

Moreover, it is an offence to use technical means to: (i) covertly search the home or property of another person; (ii) monitor or record the events taking place in the home or other property of another person; (iii) open sealed communication addressed to another person; and (iv) capture and record correspondence forwarded by means of electronic communication networks (including information systems), for the purpose of unlawfully gaining access to their personal data. The offence is punishable by imprisonment not exceeding three years.

The offence can also be committed by any person who discloses or uses any personal data obtained in any of the ways described above. The penalty incurred increases to imprisonment of between one and five years if the offence is committed: (i) by the unlawful impersonation of someone with authority; (ii) on a commercial scale; (iii) in criminal association with accomplices; or (iv) causes significant injury to the affected individual.

Compensation

Data subjects have a right to compensation in respect of material and non-material damage.

Other powers

Regulators will have a range of other powers and sanctions at their disposal. This includes investigative powers, such as the ability to demand information from controllers and processors, and to carry out audits. They will also have corrective powers enabling them to issue warnings or reprimands, to enforce an individual’s rights and to issue a temporary or permanent ban on processing. 

Practice

In Hungary, there is no current enforcement practice in relation to the GDPR. However, the enforcement of the law is instructive.

The Authority made a total of 27 decisions relating to data protection proceedings in 2017, and in 14 instances fines were imposed on controllers.

In accordance with the principle of proportionality, the Data Protection Act requires the Authority to only issue a warning if a controller or a processor infringes the provisions of the GDPR and/or the Data Protection Act for the first time.

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ePrivacy | Marketing and cookies

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National Legislation

ePrivacy laws

Act No. C of 2003 on Electronic Communications (the “Communications Act”), and Act No. CVIII of 2001 (as amended by Act No. XCVII of 2003), in respect of certain aspects of electronic commerce services and information society services (the “ECA”), implemented Article 13 of the Privacy and Electronic Communications Directive. The ECA entered into force on 23 January 2002 and the Communications Act entered into force on 1 January 2004. Both the ECA and the Communications Act were amended several times during 2011 and 2012. Act No. XLVIII of 2008 on the Basic Conditions on and Restrictions of Commercial Advertising (the “Advertising Act”) sets out the basic rules on direct marketing. The Advertising Act entered into force on 1 September 2008 and was also amended in 2011 and 2012.

The Communications Act was amended on 3 August 2011 to implement the amendments to the Privacy and Electronic Communications Directive.

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Cookies

Conditions for use of cookies

Consent is needed for the use of cookies unless the cookie is strictly necessary for the provision of a service to that subscriber or user. The Communications Act does not expressly refer to the use of browser settings as a means to obtain consent. There is an express requirement for consent to be “prior” to the use of a cookie.

Regulatory guidance on the use of cookies

The Authority has issued guidance in respect of the requirements for the operation of websites and the use of cookies. Webpage operators should provide information regarding: (i) the name of the cookie (from which the users can identify the cookies used by the operator of the website or third parties); (ii) the lifetime of each cookie and the scope of information it might access; and (iii) the purpose and reason for necessity of a cookie, and what function it provides for the user.

It is recommended that the necessary information is provided by using a “pop-up” message, and links to a description of the cookie settings on the most popular internet browsers.

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Marketing by E-mail

Conditions for direct marketing by e-mail to individual subscribers

According to the Advertising Act, direct marketing by e-mail is only authorised with the prior, explicit, information-based and voluntarily given consent of the recipient (in case of natural persons), who must be at least 16 years old.

A statement of consent may be made out in any way or form, on the condition that it contains the name of the person providing it, and - if the advertisement to which the consent pertains may be disseminated only to persons of a specific age – the individual’s place and date of birth, and any other personal data authorised for the processing by such person, including an indication that it was given freely and with the relevant notices provided.

A statement of consent may be withdrawn freely any time, free of charge and without any explanation. All personal data about an individual that has withdrawn consent must be promptly erased from the records mentioned above.

According to the Communications Act, a sender must include the eCommerce information. Communication from which the sender cannot be clearly identified for the purposes of direct marketing may not be forwarded, even with a subscriber’s express consent.

Conditions for direct marketing by e-mail to corporate subscribers

The laws of Hungary concerning marketing by e-mail do not differentiate between communications aimed at customers/consumers (C2B) and corporate entities (B2B) as long as the addressee is a natural person. Therefore, it is not necessary to obtain consent to electronic advertising targeted at corporate subscribers unless an e-mail address contains personal data in which case the rules and requirements mentioned above apply.

Exemptions and other issues

Direct postal mail (a communication consisting solely of advertising, marketing or publicity material and comprising an identical message, except for the addressee’s name, address and other modifications which do not alter the nature of the message, which is sent to at least five hundred addressees) may be sent to natural persons by way of direct marketing, even in the absence of their prior express consent. However, the advertiser and the advertising service provider are required to provide facilities for the person to whom the advertisement is addressed to unsubscribe at any time from receiving further advertisement material, freely and at no cost to the addressee. Afterwards, such unsolicited advertisement material may not be sent by way of direct marketing to the person affected.

Advertisers, advertising service providers and publishers of advertising are required to maintain records on the personal data of persons who provided the statement of consent referred to above to the extent specified in the statement. The data contained in these records - relating to the person to whom the advertisement is addressed - may be processed only for the purpose defined in the statement of consent, until withdrawn, and may only be disclosed to third parties subject to the express prior consent of the person affected.

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Marketing by Telephone

Conditions for direct marketing by telephone to individual subscribers (excludes automated calls)

The Communications Act requires that direct marketing messages, through the telephone, cannot be forwarded to subscribers who have opted out from the receipt of such messages. In addition, customers have the right to indicate, in subscriber directories kept by service providers, that their data cannot be used for marketing purposes. Communication from which the sender cannot be clearly identified may not be forwarded for the purposes of direct marketing by telephone, even with the subscriber’s express consent.

Moreover, the use of an automated calling system free of any live human intervention, or any other automated device for initiating communication with subscribers, for the purposes of direct marketing must be subject to the prior consent of the subscriber.

Conditions for direct marketing by telephone to corporate subscribers (excludes automated calls)

The position is the same as for individual subscribers.

Exemptions and other issues

No exemptions apply.

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