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Lakatos, Koves and Partners Successful for Facebook Before Supreme Court in Hungary

Lakatos, Koves and Partners Successful for Facebook Before Supreme Court in Hungary

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Lakatos, Koves and Partners has successfully represented Facebook Ireland before the Hungarian Supreme Court Kuria.

According to LKT, “mid-November the Hungarian Competition Authority published on its website Kuria’s long-awaited final judgment which ruled that Facebook’s earlier statement that its service is 'Free and always will be' was lawful. The Kuria’s judgment was preceded by the Budapest Metropolitan Court’s first instance judgment, which vacated the HCA's decision issued in December 2019. In that decision, the HCA ruled that the free statement misled consumers, essentially because Facebook monetizes users’ personal data to serve them targeted advertisements. If that’s the case, the statement that the Facebook service is 'free' is not valid and misleading, as it distracts consumers’ attention from what happens with their data. The HCA imposed a record fine at the time, amounting to EUR 3.4 million.”

According to the firm, “the HCA’s case was important because it raised specific legal questions around price communication in zero-priced business models operating based on consumer data. The Kuria’s ruling is equally an important addition to what 'price' and 'free' mean in this context. The Kuria held that any type of consideration can be caught as 'price' which is a disadvantage for the consumer, provided firstly that it is not an obvious feature imminent in the nature of the product, also that it is direct and it is significant, i.e. capable of impacting consumer’s decision. With respect to the statement that Facebook’s service is free, these conditions were not met. The Kuria held that in a digital zero-priced service, the ads viewed by consumers are targeted, does not represent a disadvantage for consumers, compared to what is traditionally imminent in zero-priced services, i.e. viewing ads.”

LKT’s team was led by Partner Eszter Ritter.