Advertising Self-Regulation in Hungary

Self-regulation in advertising has a history, beginning with the regulation of published advertisements. As time passed and statutory legislation changed, self-regulation grew to cover not only classical advertisements but also all commercial communication andbusiness-to-consumer communication originating from the trader. Therefore, whenever I refer to an ad or advertisement, this is meant to include any type of commercial communication targeting the consumer.

The Hungarian SRO, the Advertising Self-Regulatory Board (Önszabályozó Reklám Testület or ÖRT), is a member of the European association, EASA (European Advertising Standards Alliance), serving as its chair for the last fi ve years. Ildikó Fazekas, Secretary General of the Hungarian self-regulatory organization, Önszabályozó Reklám Testület (ÖRT), was elected Chairman of the European Advertising Standards Alliance (EASA) in 2009 – and has held this position for four years.

5.1. EASA – A working model of self-regulation 5.1.1. The added value of self-regulation

The European Advertising Standards Alliance (EASA) is a non-profi t, non-governmental organization based in Brussels. It “is the single authoritative voice on advertising self-regulation issues and promotes high ethical standards in commercial communications by means of effective self-regulation, while being mindful of national differences of culture, legal and commercial practice.”³⁵ It is a European organization but has members from other parts of the world as well.

Advertising self-regulation provides an effective complementary and alternative dispute resolution mechanism for consumer complaints. It is free of charge, fast and independent and it unburdens the courts. Its benefi t for

35 EASA homepage http://www.easa-alliance.org/About-EASA/Who-What-Why-/page.aspx/110

the advertising industry is the possibility to demonstrate its commitment to responsible and trustworthy commercial communication as well as the benefi ts of the dispute resolution mechanism. For the consumer it is a complementary tool of consumer protection offering fl exibility, speed and effectiveness uncharacteristic of the courts or other authorities. With the copy advice tool it aims to avoid problems before they surface, preventing commercial communication in breach of the rules from going public. For the state (legislator, courts and authorities), it is a mechanism ensuring fair competition and consumer protection and is free of charge for the taxpayer.

The mechanism of self-regulation has its own set of rules and procedures to apply to those rules. The rules of the Code (the international and the Hungarian as well) are based on the International Chamber of Commerce (ICC) code. The code covers the widest possible range from the environment to children’s and online marketing issues covering all industry members, including special rules for alcohol, gambling and other products. The code and its regular revisions seek to ensure that all consumers and traders in the global market abide by the same rules. The Code follows statutory legislation, in some instances even setting more stringent rules (e.g. alcohol), while prescribing its own set of rules for taste and decency as well.

Based on this code, the EASA and its members have versions designed to ensure fl exibility (conformity with national taste and decency issues) and stability for the global market in the rules of advertising. The EASA aims to be a

“one-stop shop” for consumer feedback and complaints. That is the reason why it regularly monitors members’ activities to ensure consistency in applying the set of rules, operating a website for cross-border complaints and offering copy advice to the traders of different member states. Furthermore, that is the reason it tries to follow the ever-changing ways in which the traders communicate with the consumer, covering online ads, online behavioral advertising techniques, direct marketing and so forth.

There is some criticism regarding the legal status and effectiveness of self-regulation. It is said that regulation works better than self-regulation, and that self-regulation diminishes the rule of law. Against that criticism it must be said that statutory legislation does have its limits: it cannot be as absolute and detailed that it can handle all the issues arising in the ever-changing advertising industry. Emerging advertising techniques come and go overnight at a speed industry members and their organization can better handle than statutory legislation. However, it must be kept in mind that self-regulation always operates within a legal framework with due consideration of the authorities’

(courts’) activities assisting the industry members. Thus, statutory legislation and the related practice set rules for self-regulation, which operates within such confi nes and not beyond them. Self-regulation is not likely to favour the advertising industry over the consumer but helps the industry comply with the expectations of consumers and consumer organizations instead. One of the reasons why self-regulation in the fi eld of advertising is so successful is the fact that the commercial communication of the traders is constantly under the spotlight. Furthermore, it is worth recalling that self-regulation is basically a voluntary action, employing not hard sanctioning but voluntary fulfi llment and assistance to traders in compliance with the restrictions on advertising.

5.1.2. Limits of self-regulation

Though the benefi ts of self-regulation are manifold, there are some limits to such activities as well. One of the objectives of self-regulation is to fi ght against rough traders, however, it is not an instrument of criminal law. An effective self-regulation mechanism is based on the legal framework of statutory legislation. SROs try to cover all forms of commercial communication but there are limits to that as well. Such mechanisms do not cover all forms of corporate communication of traders (for example annual reports and media statements are excluded). Self-regulation mechanisms cannot change the state of society in the context of legal, decent, honest and trustful advertising, but it can contribute to the promotion of these values. Self-regulation cannot limit the number of advertisements as quantitative restrictions are usually put in place by legislation (see Act CLXXXV of 2010 on Media Services and Mass Media Articles 33–35) and enforced by the authorities.

5.2. Hungarian SRO – the Hungarian Code of Advertising Ethics

The fi rst Hungarian Code of Advertising Ethics (Code) was created by the Hungarian Advertising Association – unprecedented in the entire region – in 1981. With this, a collection of norms was established based on the code of the Paris based International Chamber of Commerce (ICC). Since then, several revisions were carried out, most recently in 2009. The Code is now operated by the Hungarian Advertising Self-Regulatory Board (Önszabályozó Reklám Testület ÖRT). Its rules follow those of the ICC Code and are in compliance

36 http://www.ort.hu/images/Pdf/english/Code%202009.pdf

with the statutory legislation of the EU and Hungary. The Code includes rules for all types of commercial communication, with some special rules for media groups and products such as alcohol and gambling.

Through its procedure the ÖRT seeks to clear the advertisement (or other type of commercial communication) submitted, stating that it complies (or fails to comply) with all the state imposed rules as applied by its authorities, as well as the ethical standards of the Code.

6. The tasks of the Hungarian advertising self-regulatory