Hungarian Supreme Court Affirms Limited Liability for Online Platforms Under E-Commerce and Digital Services Acts

Kúria Upholds Limited Liability for Online Platforms

The Hungarian Supreme Court, officially known as the Kúria, has delivered a pivotal judgment affirming the limited liability of online platform service providers. This decision is rooted in the principles outlined by the E-Commerce Act and the Digital Services Act (DSA), providing crucial clarity for digital businesses operating within Hungary.

Conditions for Limited Liability Detailed

The Supreme Court's ruling specifies that a hosting service provider is not to be held liable for unlawful information stored at the request of a user, provided that the provider has no actual knowledge of the unlawful activity or content. Furthermore, once the platform becomes aware of such content, it must take immediate steps to remove or block access to the unlawful material. This judgment specifically addressed scenarios involving the distribution of products by independent sellers through marketplace platforms, where items not permitted in Hungary were made available by third-party vendors rather than the platform operator itself.

The Court emphasized that the liability of an undertaking operating an online platform is not objective concerning unlawful content appearing on its website. To establish liability, it is necessary to prove either actual knowledge of the unlawful content or activity, or a failure to take immediate action to remedy the unlawful situation upon becoming aware of it.

Legal Framework: E-Commerce Act and Digital Services Act

The judgment underscores the application of both the E-Commerce Act and the Digital Services Act. The DSA, a European Union regulation, explicitly refers to the limitation of liability for hosting service providers, clarifying that it cannot introduce new forms of liability but rather provides for cases of exemption. The Kúria confirmed that the DSA is applicable to consumer protection relationships, given its relevance to electronic commerce. The Hungarian E-Commerce Act (Act CVIII of 2001) has historically implemented the E-Commerce Directive, establishing rules for intermediary service providers and conditions for their exemption from liability.

Implications for Service Providers

This decision provides significant guidance for platform service providers, clarifying that their operations fall under the scope of the DSA. This framework offers potential exemptions from liability under specific conditions, particularly when infringements are committed by partners utilizing their platform services. The ruling reinforces the existing 'safe harbour' provisions, ensuring that platforms are not automatically held responsible for user-generated content unless they fail to act diligently upon notification of illegal activities.