A resolution by the Commission for the Protection of Competition (“CPC”) raised a lot of questions amongst the traders who use the services of vloggers and bloggers to advertise products and services. The comments amongst latter were even more.
CPC resolved on a claim submitted by an owner of an e-shop for computers and computer equipment against a competing company. Both companies have actively advertised computers and computer configurations for gamers. The companies have used online advertising channels to promote their e-stores also.
The claimant pleaded breaches committed, according to Article 30, Article 32 and Article 34, par. 5 of the Protection of Competition Act (the “PCA”). The facts, referred to in the claim are: a person, called a gamer, creates a video channel and publishes two videos with offensive content that prejudices the good reputation of one of the parties. The vlog implies and suggests a negative impression on the company’s activity and the entire e – shop business. The comments shared under the videos prove that after receiving this information, the costumers refuse to buy products from the mentioned website. The facts presented in the gamer’s YouTube channel are considered a video modification and misinterpretation of the objectively existing facts, where the latter acquire content or meaning different from the actual one. According to the claimant, the YouTube advertising channel is sponsored by the defendant. He uses it for advertising campaigns and sales with discount. The vlogger gives a detailed information about a specific promo code and where to enter it to make a discount on an order from the defendant’s site.
The defendant’s company statement provides that there is no connection between the company and the creation and broadcasting of these videos on the Internet. The person who distributes the videos is not an employee or a contractor of the company and there is no employment or civil agreement signed between them, nor any other advertising or service agreement. The only connection is that the gamer is among the streamers in whose channels their followers could shop with discount.
The legal analysis rejects the ability of the defendant to be held liable for breaching the ban on unfair competition. What is done is not considered prejudicing the good reputation or misleading or comparative advertising according to the CPC. The CPC has ascertained a violation on unfair competition, and particularly, for activity or inactivity contrary to good faith commercial practice and those which harm or may harm competitors’ interests. According to the evidence collected within the research, the Commission considers that the video clips published contain messages responding to the definition of advertising. But the lack of any involvement by the defendant’s company in the ordering, creating and distributing the videos, leads to the conclusion that the company is not their advertiser. In the context of the dynamically developing technology environment, the meaning of the term Vlog includes maintaining a video portal, in which the creator shares his views. It is not necessary to establish a legal relationship between the company and the respective vlogger. The latter is not established in this particular case and the company could not be held liable for that.
The defendant’s company acknowledges in its statement that it has learned about the publication of the videos on the Internet and it is informed in detail of their content. The CPC generally observes a breach of the competition rules in the company’s inactivity. After being formally notified about the proceedings, it is supposed to perform such actions that categorically distinguish itself from the behavior of the vlogger. The company has no executed such actions proving that the defendant affects the vlogger in a way to change the content of the video clips. Last but not at least, the vlogger has a financial incentive to advertise the products of the respondent company.
Moreover, a breach under Article 29 of the PCA has been ascertained. The Commission defines it as not a very severe one and the amount of the sanction imposed in this case is 0.5% of the company’s net sales for the financial year 2016 as well as the costs incurred in the proceedings. In this case, the financial dimension of the CPC’s resolution is about BGN 50,000. More important is the fact that the CPC creates practice and control over the activity of individuals and legal entities on the Internet, the influence of the vloggers and bloggers, as well as the social networks and channels, on the opinion formation, marketing attitudes, consumer’s manipulation etc.
The article above is intended for information purposes only by drawing your attention to the newest practice of the CPC. It should not be construed as (binding) legal advice. For a thorough understanding of the subjects covered and prior acting on any issue discussed we kindly recommend Readers consult Ilieva, Voutcheva & Co. Law Firm attorneys at law.