The Bulgarian Commission on Protection of the Competition (CPC) recently provided again its interpretation on the definition of "misleading advertising". While the decision did not present any major surprises, it introduced a new element that may indicate the future regulatory approach of the authority. These developments are important for understanding the evolving landscape of advertising regulations.
In summary: According to Decision 1132/31.10.2024 (the "Decision") involving Walltopia AD ("Walltopia" or the "Claimant") and Inventix OOD ("Inventix" or the "Defendant"), information about a trader's history and products offered on the market as shown on its corporate website may not be considered an advertisement.
The Decision was issued in the context of proceedings initiated upon a complaint filed by Walltopia. The central claim was that a publication on Defendant's website about a climbing site project, in which both the Claimant and the Defendant were involved (the "Project"), amounted to an unfair competition practice. Specifically, this was alleged that there was a violation of Article 31 of the Bulgarian Law on the Protection of Competition ("LPC"), which prohibits merchants from deceiving about the substantive characteristics of their goods or services by asserting false information or misrepresenting facts, as well as of Article 32, in connection with Article 33 of the LPC, which prohibits misleading advertising. The Claimant contended that, although the Defendant had constructed only two of the climbing walls, the publication on the Defendant's website created the impression that the Defendant completed the entire Project.
The CPC ruled that no infringement of Article 31 had occurred, primarily because Inventix had accurately disclosed that it had developed and constructed only 528 m² of the total 3,000 m² climbing walls area of the Project. The CPC noted that, given the specific nature of the Defendant's services—production, delivery, and installation of climbing walls—the information provided on the website was sufficient for the primary audience, namely professionals engaged in the establishment and management of various entertainment and sports sites, to understand that the Defendant was responsible only for a part of the Project.
More noteworthy are the arguments presented by CPC regarding the allegations of misleading advertisement. The authority reaffirmed its established position that misleading advertisement can be identified only if the following elements are cumulatively present: (i) the claimant and the defendant are competitors in the relevant market; (ii) there is an advertisement disseminated over a certain period; (iii) the advertisement contains misleading information, presented in any form, i.e., it includes information that is false or misrepresents the truth; (iv) the advertisement actually misleads or is likely to mislead the persons to whom it is addressed, thereby influencing their economic behavior; and (v) it causes or is likely to cause harm to a competitor. In this case, the CPC ruled that there was no advertisement, and therefore, the second condition was not met. The CPC clarified that a company's presentation of completed projects on its website does not constitute advertising. The reasoning was that the purpose of such information is not to induce the sale of goods or services but merely to showcase the company and its activities. Furthermore, accessing this information requires users to take active steps to search for and discover it.
However, the Decision contradicts previous CPC decisions, where the authority ruled that information about the history and the production process applied by a merchant, published in the "About Us" section of a corporate website, constitutes an ad. CPC previously held that the presentation of information about the history and the origin of a production process, as well as about advantages of raw materials in an appealing manner serves to promote the products of the respective merchant and thus, induce the sale of the respective products (see for example CPC Decision No. 263/08.03.2018, Refan/Parfen).
Key takeaways
Considering the conclusions outlined in the Decision, it appears that, in the CPC's view, the key factor in determining whether an advertisement is present, is whether the communication highlights any properties or advantages of the products or services offered by a merchant. If a message merely introduces the merchant and lists products or services delivered/supplied by the merchant, the likelihood of it being classified as an advertisement is lower. Consequently, even if the information is false or misleading, it may not constitute misleading advertising. Conversely, if a publication specifies or emphasizes particular features or advantages of the merchant itself or of its products or services, thereby attracting the attention of potential customers, the risk of it being considered an advertisement—and thus potentially misleading if any information is false or misleading—increases significantly. This distinction is subtle and subject to interpretation by both the merchant and the competent authority.
Moreover, although these decisions specifically address information published on a website, the same approach could apply to other forms of communication. This raises the question of whether a merchant may disseminate information—potentially even misleading—without it being classified as an infringement of the prohibition against misleading advertising, provided such information does not explicitly promote a specific product or service or seek to induce sales.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
