Business Organizations Stood Against the Fine Imposed on Hypoland Toy Stores as "unlawful"

Business | November 19, 2020, Thursday // 18:02
Bulgaria: Business Organizations Stood Against the Fine Imposed on Hypoland Toy Stores as "unlawful"

In a position of the Association for Modern Trade stated today the fine imposed by the Commission for Protection of Competition for "misleading advertising" raises important questions for the business environment in Bulgaria.

On November 13, the CPC fined the retail chain, whose personnel supported the anti-government protests in Bulgaria, with BGN 124 500 for the promotion of Lego products from the beginning of 2020.

How is this happening? A "random" person goes to Hypoland with the intention of buying six types of Lego on sale, but there are only five. There is a sixth one in other stores of the chain, but the person is not obliged to go around. He felt damage is incurred and decided to act. The same person files application to a commission, but not the Consumer Protection Commission, as the logic suggests.

Instead he refers to the Commission for Protection of Competition. It began procedure and ended it with a six-figure fine for the "anti-government rebel” retail chain.

Hipoland is part of the Association for Modern Trade, together with the largest retail chains in Bulgaria: "Avanti 777" EOOD, "Billa Bulgaria" EOOD, "Van Holding" EOOD ("Fantastico"), "Daichman shoe trade" EOOD, "DM Bulgaria" EOOD, "Doverie - Brico" AD ("Monsieur Bricolage"), "Kaufland Bulgaria EOOD and Co" KD, "Lidl Bulgaria EOOD & Co" KD, "Maxima Bulgaria" EOOD ("T Market"), " Promarket OOD, House Market Bulgaria EAD (IKEA). Today, they are raising their voice against the CPC's decision not only to protect Hypoland, but because the fine raises serious concerns about the conditions under which they work.

"With the decision the CPC sets unenforceable requirements for conducting advertising campaigns" - the Association writes and explains: "the quantitative restrictions applicable to the offered products should be communicated in absolutely all advertising materials, regardless of whether their format and characteristics allow it, or be provided and guaranteed at the cost of subsequent imposition of sanctions availability of all advertised products in all retail outlets and / or online platforms for sale for the entire period of the campaign.

Moreover, the decision of the CPC puts retail chains in complete obscurity and lack of legal certainty even when fulfilling the unbearable requirements for commercial communication. It remains unclear how the supervisory body will interpret the messages to consumers and whether their understanding will not be one-sided and in service for a specific purpose - imposing a sanction on a specific merchant.

Such requirements do not follow the law and make it impossible for retailers, even with the best planning, to advertise price reductions without the risk of sanctions. In this way, competition is not protected but damaged, as advertising and the supply of goods in the interests of consumers are unjustifiably restricted.

 "The AMT raises another issue – the self-referral of the CPC at the signal of a “client”.

"In Bulgaria, the same sanction mechanism which is used for 'misleading advertising' is also used for incomparably more serious cartel violations and monopolistic abuse, which is clearly unfair and needs to be changed," the association said. "In conclusion, we hope that the fine imposed on Hypoland AD is not related to the active civil position of the owner and its employees of the company in recent months. If this is not the case, the reaction of public authorities would be a gross violation of freedom of expression, democratic principles and the rule of law.”

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