Unilaterally increased fees on the behalf of Invitel

In its ruling dated 5 July, NMHH fined Invitel for HUF ten million and obliged it to cease its unlawful conduct, as subsequent to the reduction of internet VAT in February, it unlawfully and unilaterally raised its fees for indefinite term subscriber contracts. It increased its monthly fees for telephone, cable television, IPTV and internet services, even increasing its price per minute for its telephone services.

The fees of electronic communications services are open fares, yet the unilateral modification of previously concluded contracts are only allowed in a limited number of cases by the law, since the subscribers expect upon contracting for its terms and conditions to extend equally to both parties. Invitel sought to irregularly explain its increase in price, amongst other things, by the increased rental fees of the electricity provider’s poles required for its network development, yet the costs of infrastructural development are beyond the scope of the service provider’s own business policy and cannot serve as the basis for unilateral modifications to contracts.

The majority of service providers acted appropriately

NMHH directly inspected the observance of the infocommunication regulations related to the reduction of internet VAT in the case of the twenty largest service providers and discovered no infringement in eighteen of these cases. However, in its ruling dated 23 May, it called on Telenor to properly inform its clients, considering that the service provider displayed no information on its websites concerning the net monthly fees of its residential tariff plans and failed to inform its subscribers on the possibility of bilaterally modifying contracts in the case of certain internet-based services. NMHH also uncovered infringing practices in the case of Jurop Telekom: the service provider published its modified GTC due to the changes in VAT with a thirty-day delay and its online informational interface was created in an incomplete form. However, subsequent to its initiation, the proceedings were terminated in May of this year and thus the authority terminated the procedure on 6 June as there was no need to adjudicate.

NMHH inspected the service providers’ observance of the new regulations pertaining to the reduction of VAT in three fields: whether they appropriately modified their general terms and conditions (GTC) in a timely manner, whether they informed subscribers of the changes in VAT and whether they appropriately designated the internet access service fees in their GTCs and bills.

NMHH devotes special attention to all comprehensive modifications which effect a wide range of subscribers and the future observance of regulations related to the decreased VAT rate which will be reduced from 18 to 5 per cent in the following year. When applying legal consequences, it always determines the applied form and measure in accordance with the principle of progressiveness and proportionality, whilst considering all circumstances of the case.