HUNGARY Trends and Developments Contributed by: Adam Liber and Tamás Bereczki, PROVARIS Varga & Partners
to limited awareness, a shortage of specialised expertise, and financial constraints. While larger firms are more likely to integrate AI technolo - gies into their operations, SMEs often restrict their use of AI to non-critical applications such as chatbots or fraud prevention tools. The slow adoption among SMEs could widen the gap in competitiveness as larger firms continue to invest in and benefit from AI technologies. The analysis emphasises that while AI has the potential to significantly boost efficiency, competitiveness, and even GDP, the failure to address the challenges related to its adoption and regulation could exacerbate inequalities and lead to long-term disadvantages for smaller enterprises. The HCA therefore recommended targeted interventions to address these chal - lenges, including support for local AI training and development programmes that emphasise com - pliance with data protection laws and the inclu - sion of smaller languages in AI systems. It also suggested that regulators should maintain con - stant oversight of the evolving AI landscape to ensure that its deployment aligns with principles of fairness, transparency, and accountability, as required under the GDPR. The study concludes that a strategic approach to AI development and adoption is essential to mitigate data protection risks, preserve cultural and linguistic identity, and foster equitable economic growth. Artificial Intelligence and Data Protection The NAIH has also displayed a marked focus on the regulation of AI as a high-risk data pro - cessing activity, particularly considering evolv - ing technologies and their implications for the rights of data subjects. The NAIH’s approach, especially in the context of the use of machine learning (ML) technologies and AI, emphasises GDPR compliance, underscoring the need for a balance between technological advancements
and the protection of fundamental rights of data subjects and transparency of the related data processing activity. A key case highlighting this concern involved one of the largest Hungarian banks, where the NAIH imposed a fine of approximately EUR650,000 for using emotion analysis software in customer care. This decision was later upheld by the court, reinforcing the authority’s position on the importance of GDPR compliance in AI applications, especially in automated decision- making and profiling. In this instance, the bank employed AI technology for applying sentiment analysis on every incoming phone calls, which the NAIH found disproportionate in terms of the risks posed to data subjects’ fundamental rights. The NAIH highlighted that the bank did not pro - vide any information about the application of this technology and therefore data subjects were deprived of their respective data subject rights. This decision highlights the NAIH’s stringent stance on ensuring that AI and ML applications, especially those involving automated decision- making and profiling, comply with GDPR princi - ples. It also underscores the necessity for data controllers to conduct thorough data protection impact assessments and balancing test assess - ments when implementing AI solutions. Furthermore, the NAIH’s ongoing investiga - tion into ChatGPT, in co-ordination with other EU supervisory authorities, due to OpenAI not having an EU establishment at the launch of the procedure, reflects its proactive approach in addressing potential risks associated with new and emerging technologies. Customer Satisfaction Surveys The NAIH has reviewed the data processing practices of a parcel delivery company regard -
180 CHAMBERS.COM
Powered by FlippingBook