(This is an excerpt from the report "Hungarian Media Laws in Europe: An Assessment of the Consistency of Hungary’s Media Laws with European Practices and Norms")

Hungary’s Media Authority has a range of powers over all aspects of media regulation. Critics have challenged in particular the Media Council’s role in tendering and awarding broadcasting licenses, including its powers to award licenses without a tender, as well as the Media Authority president’s power to issue ministerial-level decrees regarding licensing and spectrum fees (Section 5.1). Opponents have also raised concerns over the new Commissioner for Media and Communications, an appointee of the Media Authority responsible for handling complaints from the public, and monitoring the media field for content deemed “harmful” but not in violation of any regulations specified in the law. Critics say the Media Commissioner’s powers extend the Media Authority’s regulatory scope and sanctioning powers to areas not defined in the media laws, which could have a “chilling effect” on the press (Section 5.2). Opponents claim these powers enable the Media Authority to assert arbitrary and far-reaching control over the country’s media landscape. The Government maintains that the Media Authority’s regulatory duties in these areas are clearly defined in the law and that media authorities in a number of EU-member states are vested with similar powers.

Media Authority powers: tendering and licensing

Under the Media Act, the collective bodies of the Media Authority are responsible for all aspects of tendering and licensing for commercial and public broadcasters, both analogue and digital.1 The Media Council is responsible for drafting and issuing tenders, and for renewing and awarding licenses for all linear media service providers (analogue radio and TV broadcasters); 2 the Media Authority allocates and manages the radio frequency and broadcasting spectrum; and the Media Authority president is responsible for tendering and licensing for digital broadcasting and for facilitating Hungary’s digital switchover by the end of 2012.3 When preparing and issuing tenders for linear broadcasting licenses, the Media Council requests that the Media Authority draw up frequency plans.4 The criteria for spectrum allocation are not specified in the Media Act but rather are defined in the internal rules of procedures created by the Media Authority. The Media Council then drafts the tender and holds a public hearing.5 Once the tender is issued, the Council is responsible for reviewing the formal and substantive validity of the applications.6 The Council can invalidate tender applications on various grounds, as specified in the Media Act and in the tender invitation. The Media Council can render a tender application invalid on formal grounds, such as for failing to provide the required information or if the applicant does not meet the formal criteria of the tender.7 The Media Council also assesses the substantive validity of tender applications to assure the tenderer meets the criteria as specified in the tender invitation.8 It can invalidate the tender application for substantive reasons, including if: the application contains “incomprehensible, contradicting or clearly unfeasible commitments and conditions that impede the evaluation of the tender;” if it contains “undertakings that are unfeasible, excessive or insufficient;” or if the tenderer fails to meet the substantive requirements defined in the tender invitation.9 The law also specifies that media companies which have been found in “serious breach of obligations stemming from a broadcasting or a public contract” in the previous five years can be barred from participating in the tender procedure.10 In the case the Media Council invalidates a tender, this terminates the tenderer’s status in the procedure.11 The tenderer may request the Regional Court of Budapest review the final decision on grounds of a breach of law. Additional appeals cannot be lodged against this Court’s ruling.12

Licenses are valid for a maximum of seven years for radio broadcasters and 10 years for audiovisual media service providers. The Media Council can renew these licenses once without a tender procedure for a maximum of five years.13 The Media Council can also award a license without a tender once for a maximum of three years provided the media service provider meets certain requirements to perform certain “public duties.”14 This is defined as media that provides content “in the event of and in relation to a state of emergency promulgated pursuant to the Constitution, a natural disaster affecting a significant territory of the country, or an industrial disaster,” or that serves a community’s “special educational, cultural, information needs, or needs associated with a specific event affecting the given community.”15

The Media Council can amend and recall the tender invitation up to 15 days before the tender submission deadline, in which case it is required to publish reasons for its decision.16 The Council may also terminate a tender procedure if no tenders are submitted, if none of the tenders submitted satisfy the objectives or basic principles of the Media Act, or if the “national or international economic environment” or the “economic, legal, frequency management or media service provision market circumstances” change substantially from the time the tender invitation was issued.17

The president of the Media Authority is responsible for issuing, reviewing and assessing the validity of tender applications, and awarding digital broadcasting licenses.18 The president can issue tender invitations and assess the formal and substantive validity of the applications, based on the similar criteria described above. The president can invalidate tender applications both on formal and substantive grounds, as specified in the amended Act on the Rules of Broadcasting and Digital Switchover.19 A committee must approve by a two-thirds vote the president’s decision to award tenders.20 The committee can refuse its consent only on grounds the award was granted in violation of the law, such as if there was a violation of the tender notice or procedure.21 The president can in exceptional cases award licenses to local or regional digital broadcasters for up to three years without a tender if the media service provider meets certain requirements to perform certain “public duties.”22 This is defined as media that provides content “in the event of and in relation to a state of emergency promulgated pursuant to the Constitution, a natural disaster affecting a significant territory of the country, or an industrial disaster,” or that serves a community’s “special educational, cultural, information needs, or needs associated with a specific event affecting the given community.”23 Under an amendment to the Hungarian Constitution passed by lawmakers in early January 2011, the Media Authority president also has the right to issue ministerial-level decrees on matters related to license and spectrum fees.24

INTERNATIONAL CRITICISM

Critics have raised objections to the Media Authority’s general decision-making powers over all aspects of the tendering and licensing process, and warn that these powers give the Authority extensive control over Hungary’s media landscape. Opponents have challenged in particular several provisions in the Media Act enabling the Media Council to issue, amend and withdraw tenders, and to issue licenses without a tender. Critics say this gives the Council “arbitrary” control over the tendering and licensing process, which could allow the Media Council to issue and revise tenders until finding a suitable applicant, or to cancel tenders if no applicant suits the Media Council.25 This issue sparked controversy after the Media Council in July 2011 issued a tender for the frequency used by Klubrádió, a popular liberal political news and talk radio station, as the station’s license came up for renewal.26 The tender call was made for an all-music radio station, effectively eliminating Klubrádió from the competition. In December 2011, the Media Council awarded the frequency to an unknown company, Autoradio, stirring outrage from domestic and international critics who claim the decision was a politically motivated effort by the Media Council to remove an important source of independent political analysis and opinion.2

Article 19, the Hungarian Civil Liberties Union (TASZ), and other media experts have also challenged in particular the five-year ban on companies from participating in future tender offers if sanctioned for a “gross breach” of broadcasting and licensing obligations. Since the determination of what amounts to a “gross breach” is left to the Media Council, “broadcasters must take care not to upset the [Media Council] if they wish to remain on the market,” according to a joint report by Article 19 and the Hungarian Civil Liberties Union.28 “This will obviously have a chilling effect on free expression and could lead to self-censorship,” according to the report.29

HUNGARIAN GOVERNMENT'S RESPONSE

The Hungarian Government states that the Media Act does not enable the media authorities to assert arbitrary control over the tendering and licensing system. In its December 2010 statement, the Government says the Media Act provides clear rules under which the Media Council and Media Authority President can draft, issue and award tenders, including conditions that allow these bodies to invalidate and withdraw tenders.30 These include cases where no applications are received, if the “domestic or international economic environment changes which render the purpose of the tender invalid,” or if the winning applicant “does not satisfy in part or in full the aims and basic principles set forth in this legislation.”31

The Government also states that only in strictly defined cases can the media authorities grant licenses without tendering: “In its guidelines, the Media Council must define the public tasks for which frequencies may be allocated for a definite period without a tender procedure. In other words, this form of media broadcasting license is not of equal status to that awarded through tendering to media broadcasting in corporate form.”32 It cites an example from one EU-member state in which the media authorities are permitted to renew licenses without a tender: France. Hungarian officials also maintain that the Media Authority president’s decree-making powers are limited to setting licensing and spectrum fees, and cites an example from one EU-member state in which it states the regulatory body has the power to issue directives: Germany.

MEDIA AUTHORITY POWERS: THE MEDIA COMMISSIONER

Hungary’s media laws introduced a new Media and Communications Commissioner, an official within the Media Authority responsible for representing the rights of media consumers and for handling disputes between the media and the public. 51 The Media Authority president appoints, can recall and exercises full employer’s rights over the Commissioner.52 The Commissioner reports to the Media Authority president and/or the Media Council.53 The Commissioner’s formal role is to monitor, investigate and resolve complaints regarding media content which may “harm the interests of” viewers, listeners or readers, but which does not constitute a breach of regulations specified in the media laws, and hence falls beyond the scope of the Media Authority’s regulatory powers.54 

The Commissioner has no formal regulatory powers but can request any data and information—including trade secrets—from any media outlet when investigating a complaint.55 If the outlet fails to comply, the Commissioner can alert the Media Authority, which can require the data be produced.56 Failure to comply with the Media Authority’s data requests can result in a fine between HUF 50,000 (EUR 180) and HUF 50 million (EUR 180,000) based on the media outlet’s previous annual revenue.57

As specified in the Media Act, the Commissioner conducts written and verbal consultations with media outlets to settle disputes brought by individuals or groups over media content that harms their “interests” or in consumer protection matters.58 The Commissioner fields complaints from the public regarding harmful content and can also initiate investigations ex officio.59

In settling a dispute, the Commissioner can request that media outlet sign a contract with the Commissioner verifying the harmful content and establishing an agreement to prevent future harm.60 The Authority is then empowered to verify compliance with provisions in the agreement in the course of its regulatory inspections. 61 The Authority may also take into account “the extent of cooperation displayed by the service provider concluding the agreement . . . in any other official matters involving the service provider as well.”62

International criticism

Opponents claim the Media Commissioner has de facto sanctioning powers, which expands the Media Authority’s monitoring and sanctioning capacities beyond the scope of the specified regulations to include any materials deemed “harmful,” as determined by the Commissioner.63 “In case there is no violation of the law, the Commissioner—appointed by the President of the Authority—may lead an investigation, and report to the President of the Authority,” according to media lawyer Judit Bayer.64 Another legal review found that the Commissioner’s powers “remain virtually unlimited due to being ill-defined. The Commissioner for Media and Communications may not pass decisions with binding force but does possess the right to access any information or document, and reports directly to the President on his investigations. The Commissioner is not only appointed by but also subordinated to the President who exercises employer’s rights over him and his staff.”65 Opponents claim this enables the Authority to exert additional pressure on the media, which could have a “chilling effect” on the press. “By calling this position a ‘Commissioner’ (which is a term equal to ‘ombudsman’ in the Hungarian language) and declaring that it does not have any jurisdiction, it may appear that the investigated mediums do not suffer any damage,” according Bayer’s analysis.66 “[F]irst, the investigation alone has a chilling effect; second, the investigation may entail a procedural fine, or a new procedure by the Authority.”67 

Bayer claims these measures contradict prior case law as specified by Resolution 1/2007 of Hungary’s Constitutional Court.68 In that case, the Court annulled a provision in Hungary’s previous media law that allowed the former Complaints Commission to investigate and sanction complaints about content “not specified in the Act.”69 According to the Court, such powers “unnecessarily restrict the right to the freedom of the press without a constitutionally justified objective.”70 

Hungarian Government’s response

The Hungarian Government claims the Commissioner’s role is to represent the rights of media consumers and that it has no regulatory powers. “The fundamental purpose of the Commissioner is the enforcement of consumer rights and the improvement of consumer awareness; his/her actions are not ‘against’ service providers, rather they are aimed at the development of effective, flexible and quick solutions in cooperation with service providers with regard to the given problem,” according to its December 2010 statement.71 The Government also emphasises that the Commissioner’s proceedings are clearly established in the law, and that the Commissioner’s activities are not “authority procedures,” but rather the aim is to establish a mutual agreement between the Commissioner and the service provider on methods to prevent future harms: “[T]he Commissioner may not exercise his/her rights in connection with the investigation of the complaint in a manner that constitutes ‘persecution’ under any law,” the Government states.72

1 Act CLXXXV of 2010 On Media Services and Mass Media (hereafter: the “Media Act”), entry into force 1 January 2011, as amended in March 2011, in English at: http://nmhh.hu/dokumentum.php?cid=26536. 2 Media Act, Article 48(3), available at: http://nmhh.hu/dokumentum.php?cid=26536. 3 Act LXXIV of 2007 on the Rules of Broadcasting and Digital Switchover, Article 38 (1) and (2); see also the amended Articles 43/A-43 on the Rules of Broadcasting and Digital Switchover, as specified in the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 4 Media Act, Article 49, available at: http://nmhh.hu/dokumentum.php?cid=26536. 5 Media Act, Article 50, available at: http://nmhh.hu/dokumentum.php?cid=26536. 6 Media Act, Article 57(1), available at: http://nmhh.hu/dokumentum.php?cid=26536. 7 These are specified in Articles 56 and 57 of the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 8 Media Act, Article 59, available at: http://nmhh.hu/dokumentum.php?cid=26536. 9 Media Act, Article 59, available at: http://nmhh.hu/dokumentum.php?cid=26536. 10 Media Act, Article 55(1)(c), available at: http://nmhh.hu/dokumentum.php?cid=26536. 11 Media Act, Article 58(2), available at: http://nmhh.hu/dokumentum.php?cid=26536. 12 Media Act, Article 58(2), available at: http://nmhh.hu/dokumentum.php?cid=26536. 13 Media Act, Article 48(5), available at: http://nmhh.hu/dokumentum.php?cid=26536. 14 Media Act, Article 48(4), available at: http://nmhh.hu/dokumentum.php?cid=26536. 15 Media Act, Article 48(4)(a) and (b), available at: http://nmhh.hu/dokumentum.php?cid=26536. 16 Media Act, Article 53, available at: http://nmhh.hu/dokumentum.php?cid=26536. 17 Media Act, Article 61, available at: http://nmhh.hu/dokumentum.php?cid=26536. 18 Per amended Articles 43/A-43/M to the Act on the Rules of Broadcasting and Digital Switchover, as stipulated in the Media Act. According to Article 43/C (1), the “President shall examine whether the applicant (participant) fulfils formal and substantive eligibility criteria,” available at: http://nmhh.hu/dokumentum.php?cid=26536. 19 Act on the Rules of Broadcasting and Digital Switchover, Article 43/C(2), as amended per the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 20 Per Article 43/A (6), Act on the Rules of Broadcasting and Digital Switchover as stipulated in the Media Act: “The Committee’s consent is necessary to the decision of the Authority’s President regarding the winner of the tender. Two-thirds of the total votes are required to take decision by the Committee,” see amended articles 43/A-43/M to the Act on the Rules of Broadcasting and Digital Switchover as stipulated in the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 21 Per Article 43/I(5) of the Act on the Rules of Broadcasting and Digital Switchover, see amended articles 43/A-43/M to the Act on the Rules of Broadcasting and Digital Switchover as stipulated in the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 22 Per Article 43/M(1) of the Act on the Rules of Broadcasting and Digital Switchover, see amended articles 43/A-43/M to the Act on the Rules of Broadcasting and Digital Switchover as stipulated in the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 23 Per Article 43/M(1) of the Act on the Rules of Broadcasting and Digital Switchover, see amended articles 43/A-43/M to the Act on the Rules of Broadcasting and Digital Switchover as stipulated in the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 24 Per Articles 7/A and 40/E(4), The Constitution of the Republic of Hungary, Act XX of 1949 as revised and restated by Act XXXI of 1989, as of 2 January 2011. According to Article 40/E (4): “Within its competence specified in statute, the President of the National Media and Infocommunications Authority shall issue decrees in accordance with an authorization given by a statute, which shall not conflict with other laws,” available at: http://www.mkab.hu/index.php?id=constitution. 25 See “Hungarian Media Laws Q&A,” Article 19 and the Hungarian Civil Liberties Union (TASZ), August 2011, http://www.article19.org/data/files/medialibrary/2714/11-09-01-REPORT-hu.... 26 The tender call for Hungary’s 94.5 FM frequency is available (in Hungarian) at: http://www.ortt.hu/uploads/9/25/1306490299pft_budapest_95-3_updated.pdf. 27 “Hungary: independent voice faces closure,” Index on Censorship, 7 September 2011, http://www.indexoncensorship.org/2011/09/hungary-independent-voice-faces.... See also: “’Hungary: Response to letter from National Media Infocommunications Authority,” Article 19, 11 November 2011, http://www.article19.org/resources.php/resource/2839/en/hungary:-respons.... 28 “Hungarian Media Laws Q&A,” Article 19 and the Hungarian Civil Liberties Union (TASZ), August 2011, p 5, available at: http://www.article19.org/resources.php/resource/2723/en/hungary:-klubrad.... 29 “Hungarian Media Laws Q&A,” Article 19 and the Hungarian Civil Liberties Union (TASZ), August 2011, p 5, available at: http://www.article19.org/resources.php/resource/2723/en/hungary:-klubrad.... 30 See Criticism 4, “Criticisms and answers formulated on the subject of the proposed media act examined in a European context,” Ministry of Public Administration and Justice, December 20, 2010, at: http://www.kormany.hu/en/ministry-of-public-administration-and-justice/n.... 31 See “Criticism 4,” in “Criticisms and answers formulated on the subject of the proposed media act examined in a European context,” Ministry of Public Administration and Justice, December 20, 2010, at: http://www.kormany.hu/en/ministry-of-public-administration-and-justice/n.... 32 See Criticism 4, “Criticisms and answers formulated on the subject of the proposed media act examined in a European context,” Ministry of Public Administration and Justice, December 20, 2010, at: http://www.kormany.hu/en/ministry-of-public-administration-and-justice/n....

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51 The Media and Communications Commissioner’s role and powers are defined in the Act CLXXXV of 2010 On Media Services and Mass Media (hereafter: the “Media Act”), entry into force 1 January 2011, as amended. Per Article 139(1), available at: http://nmhh.hu/dokumentum.php?cid=26536. 52 Media Act, Article 111(2)(f), available at: http://nmhh.hu/dokumentum.php?cid=26536. 53 Media Act, Article 139(2), available at: http://nmhh.hu/dokumentum.php?cid=26536 54 Media Act, Article 140(1), available at: http://nmhh.hu/dokumentum.php?cid=26536. 55 Media Act, Article 142(1), available at: http://nmhh.hu/dokumentum.php?cid=26536. 56 Media Act, Article 142(2), available at: http://nmhh.hu/dokumentum.php?cid=26536. 57 Media Act, Article 142(2), in reference to Article 175(8). A legal remedy lies against this decision as defined in Articles 163–165 of the Media Act, available at: http://nmhh.hu/dokumentum.php?cid=26536. 58 Media Act, Article 142(3-5), available at: http://nmhh.hu/dokumentum.php?cid=26536. 59 Media Act, Article 140(2), available at: http://nmhh.hu/dokumentum.php?cid=26536. 60 Media Act, Article 142(7), available at: http://nmhh.hu/dokumentum.php?cid=26536. 61 Media Act, Article 142(7), available at: http://nmhh.hu/dokumentum.php?cid=26536. 62 Media Act, Article 142(7), available at: http://nmhh.hu/dokumentum.php?cid=26536. 63 “The New Hungarian Media Law Substantially Curtails Press Freedom” by Dr. Judit Bayer, prepared for the South East European Network for Professionalization of Media (SEENPM) with the support of the International Freedom of Expression eXchange (IFEX), March 2011, http://www.seemo.org/hungary/files/Bayer_Media%20Law_IFEX_ENfinal220311.pdf. 64 “Why Hungary’s media law is still unacceptable despite amendments,” by Dr. Judit Bayer, medialaws.eu, March 15, 2011, http://www.medialaws.eu/why-hungarys-media-law-is-still-unacceptable-des.... 65 “A criticism of the Hungarian Act on Media Services and Mass Media, Effective January 1st, 2011,” László Majtényi’s, Eötvös Károly Institute. Presented to the European Parliament, Open Hearing on Freedom of Press in Hungary, Brussels, 11 January, 2011, available at: http://ekint.org/ekint/ekint_angol.news.page?nodeid=409. 66 “The New Hungarian Media Law Substantially Curtails Press Freedom,” by Dr. Judit Bayer, prepared for the South East European Network for Professionalization of Media (SEENPM) with the support of the International Freedom of Expression eXchange (IFEX), March 2011, http://www.seemo.org/hungary/files/Bayer_Media%20Law_IFEX_ENfinal220311.pdf. 67 “The New Hungarian Media Law Substantially Curtails Press Freedom,” by Dr. Judit Bayer, prepared for the South East European Network for Professionalization of Media (SEENPM) with the support of the International Freedom of Expression eXchange (IFEX), March 2011, http://www.seemo.org/hungary/files/Bayer_Media%20Law_IFEX_ENfinal220311.pdf. 68 Decision 1/2007 (I. 18.), available at: http://www.mkab.hu/admin/data/file/651_1_2007.pdf, as referenced in “The New Hungarian Media Law Substantially Curtails Press Freedom,” by Dr. Judit Bayer, prepared for the South East European Network for Professionalization of Media (SEENPM) with the support of the International Freedom of Expression eXchange (IFEX), March 2011, available at: http://www.seemo.org/hungary/files/Bayer_Media%20Law_IFEX_ENfinal220311.pdf. 69 In reference to Article 48(1)(3) of the Act I of 1996 on Radio and Television, available at: http://www.nhh.hu/dokumentum.php?cid=10622. 70 Decision 1/2007 (I. 18.), available at: http://www.mkab.hu/admin/data/file/651_1_2007.pdf, p. 15. 71 See “Criticism 15,” in “Criticisms and answers formulated on the subject of the proposed media act examined in a European context,” Ministry of Public Administration and Justice, December 20, 2010, http://www.kormany.hu/en/ministry-of-public-administration-and-justice/n... 72 See “Criticism 15,” in “Criticisms and answers formulated on the subject of the proposed media act examined in a European context,” Ministry of Public Administration and Justice, December 20, 2010 at: http://www.kormany.hu/en/ministry-of-public-administration-and-justice/n....