Over the last decade the coverage and significance of social media constantly increased, which has allowed for many, somewhat peripheral activities, also to grow in influence. An example of such activity is video blogging on video-sharing websites such as Youtube.com. The ever-increasing popularity of such activities affords vloggers to reach greater audience than standard advertising channels and more importantly - an audience that is much easier target. Further, vloggers are able to achieve higher conversion rate for a specific product than the one achieved through standard advertising channels. Therefore, many merchants are aiming to engage such vloggers to work to their benefit by promoting (even under-the-counter) their respective products/services. In light of that trend, the competent authorities pay more attention on such alternative advertising channels.
In recent proceedings, the Bulgarian Commission on Protection of Competition (the “CPC”) held Laptop.BG, a Bulgarian online electronic gadgets retailer (the “Retailer”),liable for unfair competition practices under Article 29 of the Bulgarian Protection of Competition Act (the “PCA”). The CPC penalized the Retailer on the basis of latter’s omission to disagree with insulting statements about one of its competitors presented in two vlogs, published on YouTube by a famous Bulgarian vlogger. The CPC ruled that the aim of the vlogs was to harm the reputation of the competitor Golden Green Stone Group (“GGSG”), while praising the products offered by the Retailer (CPC Decision no. 1244/02.11.2016).
The CPC investigation was initiated upon a complaint by GGSG, accusing the Retailer of various violations of the PCA, including, among others the following:
The main arguments that the Retailer raised against the accusation were:
In its decision, the CPC held that:
When analyzing the violation, the CPC held that even though the vlogger’s expression of opinion was his inalienable right and the Retailer had no means to dictate his opinion, the Retailer was under an obligation to actively disagree with the contents of the videos, which undermined the trade reputation and goodwill of its competitor, as of the moment it became aware for these videos. The CPC defined this obligation as an expression of the diligent commercial practices, referred to in Article 29 of the PCA, thus justifying its decision to impose a penalty.
Currently the first instance appeal against the decision is pending before the Supreme Administrative Court.