HUNGARY Trends and Developments Contributed by: Adam Liber and Tamás Bereczki, PROVARIS Varga & Partners
tion by a few industry giants, potentially disrupt - ing competition in digital markets. Moreover, the rise of AI technologies increases consumer vulnerabilities, particularly in data collection and advertising. With AI, companies can more effectively gather and use consumer data, apply - ing strategies like “dark patterns” and tailored advertising. This is especially concerning in sce - narios like chatbot interactions, where consum - ers might not discern if the information provided is reliable or influenced by sponsored content. These developments highlight the need for care - ful consideration of AI’s broader implications on market dynamics and consumer protection. In 2023, the HCA launched proceedings against Microsoft for allegedly failing to adequately inform users about certain features of its search engine with artificial intelligence chat. The HCA conducted a market analysis, which started in the beginning of 2024 and was released on 21 October 2024. It aimed to deter - mine whether the rapid growth of AI technolo - gies could distort market competition across various sectors and increase consumer vulner - ability, and also sought to explore the broader implications of AI adoption, focusing on the banking and telecommunications sectors, and potential data protection challenges associated with their rapid development and integration into various sectors. The analysis highlighted that AI technologies can increase consumer vulnerability due to their abil - ity to collect and process vast amounts of data, which can be exploited for purposes like highly personalised advertising or the use of manipula - tive design strategies often referred to as dark patterns. Consumers may also be subjected to AI-driven systems such as chatbots without clear indications about whether the responses
they receive are unbiased or influenced by com - mercial interests. The study underscores the critical importance of transparency in AI sys - tems, emphasising that businesses leveraging AI technologies should provide clear and acces - sible information to consumers about the use of such systems, including their data sources, processing methods, and any inherent risks or limitations. This lack of transparency poses significant data protection concerns, particularly under the framework of the GDPR, which mandates accountability and informed consent when han - dling personal data. The analysis also delves into the global nature of AI technology, noting that key resources necessary for AI development, such as vast datasets, computational power, and skilled expertise, are predominantly controlled by major international technology companies, often referred to as big tech, such as Google, Meta, Microsoft, and Amazon. This creates a concentration of power in these entities, which has implications not only for competition but also for data protection since these companies operate on a global scale without necessarily tai - loring their products to the unique linguistic or cultural needs of smaller markets like Hungary. The HCA pointed out that the lack of AI systems specifically developed for smaller languages like Hungarian has profound implications for data sovereignty, cultural identity, and the ability to maintain secure and localised data practices. While international companies provide stand - ardised products and services globally, their lack of tailored solutions leaves smaller markets at a disadvantage in terms of leveraging AI for localised needs. The report further identified a disparity in AI adoption between larger corpora - tions and small and medium-sized enterprises (SMEs) in Hungary, with the latter lagging due
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