Hungary has moved decisively to implement and extend its digital services regulatory regime. International technology companies operating in the Hungarian market now face a tightened set of obligations that did not fully apply to them before. Companies that miss the compliance window risk enforcement action by the Nemzeti Média- és Hírközlési Hatóság (National Media and Communications Authority of Hungary). Hungary's designated Digital Services Act coordinator, with consequences ranging from formal warnings to significant financial penalties.
Hungary's updated digital services regulatory regime, implementing the EU Digital Services Act and supplemented by domestic technology legislation. Introduces new transparency, algorithmic accountability. Additionally, content moderation obligations for providers of digital services directed at Hungarian users. Companies meeting the relevant user or revenue thresholds must complete compliance assessments and update their terms and operational procedures. The primary compliance deadline for most affected categories falls in the first half of 2025, with ongoing obligations continuing thereafter.
This alert identifies which business categories are affected, sets out the threshold criteria, and outlines the immediate steps international companies should take now.
What changed and when it took effect
The EU Digital Services Act became directly applicable across all Member States, including Hungary, in February 2024 for very large online platforms and very large online search engines. For all other in-scope providers, full applicability followed in the months thereafter. Hungary simultaneously updated its domestic electronic communications and information society legislation to align national rules with the broader EU digital services body of law.
The combined effect is a layered set of obligations. EU-level rules on algorithmic accountability, transparency reporting, and risk assessment sit alongside Hungarian-specific implementing measures covering technology licensing conditions and software liability standards for certain locally regulated services. Companies that previously relied on a light-touch national regime must now satisfy both layers.
A further development concerns AI Act compliance. Hungary's regulatory approach treats AI-driven recommendation systems and automated decision tools embedded in digital services as subject to both the EU AI Act's risk classification rules and the transparency provisions of the digital services body of law. Providers deploying such systems in Hungary must map their tools against the applicable risk tiers and document that mapping.
For companies providing AI and technology legal services in Hungary, understanding how these two regulatory regimes intersect is now a threshold compliance requirement, not an optional exercise.
Which companies are affected and the threshold criteria
The new obligations apply to a defined set of digital service categories. These include online marketplaces, app stores, social networking services, video-sharing platforms, cloud computing services, online search engines, and providers of hosting services directed at users in Hungary. B2B software providers are partially affected where their platforms are accessible to business customers operating in Hungary.
The threshold criteria determine the intensity of obligations rather than whether a company is subject to the regime at all. The key thresholds to assess are:
- Whether the service has more than a negligible number of active users in Hungary – even a modest Hungarian user base triggers baseline transparency and complaint-handling obligations.
- Whether the service qualifies as a "very large online platform" or "very large online search engine" under EU thresholds – this activates the most demanding obligations, including annual systemic risk assessments and independent audits.
- Whether the service uses algorithmic recommendation systems or automated content moderation – these features trigger additional algorithmic accountability and transparency obligations under both EU and Hungarian rules.
- Whether the provider is established outside the EU but directs services at Hungarian users – such providers must designate a legal representative in an EU Member State.
Companies in the technology licensing and software liability space should note that domestic Hungarian rules extend certain obligations to software providers whose products are integrated into services used by Hungarian consumers or regulated businesses. This is broader than many international technology companies anticipate.
For companies with intellectual property considerations arising from compliance. including questions about ownership of compliance documentation, licensing of adapted systems. Alternatively. Protection of proprietary algorithmic tools. the intersection with intellectual property law in Hungary is directly relevant.
To receive an expert assessment of your company's exposure under Hungary's digital services regulatory regime, contact us at info@ferrazwhitmore.com.
Immediate actions for international technology companies
Companies should treat the following as a priority checklist. Inaction is not a neutral position – Hungary's enforcement authority has begun reviewing compliance postures and has the power to impose penalties calculated as a share of global annual turnover.
- Map your service against the threshold criteria. Establish whether you fall within the regime at all, and if so, which obligation tier applies to your service type and user volume in Hungary.
- Audit your algorithmic systems for AI Act compliance. Document every automated decision-making or recommendation tool directed at Hungarian users. Classify each tool under the EU AI Act's risk framework and record the classification rationale.
- Review and update your terms of service and transparency reporting. Hungarian-facing terms must meet specific transparency standards. Annual transparency reports are mandatory for most in-scope providers.
- Designate an EU legal representative if you are established outside the EU. This designation must be documented and communicated to the Hungarian authority. Failure to designate is itself an infringement.
- Establish or review your complaints-handling and out-of-court dispute resolution procedures. The digital services body of law requires accessible, effective internal complaint mechanisms and referral pathways to certified out-of-court settlement bodies.
A related regulatory alert covering digital services obligations in another EU Member State is available in our alert on digital services regulation in Portugal, which addresses comparable implementation approaches and cross-border compliance considerations.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our AI and technology law practice supports technology companies, platforms, and investors operating in Hungary and across the EU in meeting their digital services, AI Act compliance, algorithmic accountability, and software liability obligations. We combine Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions for clients who need counsel across multiple regulatory systems. As a law firm in Hungary and across Europe, we work with international entrepreneurs and in-house legal teams who require results-oriented advice when regulatory timelines are tight. To discuss how Hungary's digital services rules apply to your business, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.