Directive (EU) 2019/2161 as regards the better enforcement and modernisation of Union consumer protection rules (the “Omnibus Directive”) was implemented in Bulgaria by virtue of an amendment of the Bulgarian Consumer Protection Act (“CPA”) which entered into force on the 28 May 2022. Along with the enhancement of the protection of consumer rights in the digital environment, the recent legislative amendments introduced some long awaited rules as well.
More transparent price reductions
Both under the old and the new rules when a trader offers a discount, it is required to announce the previous price applied to the product in order to allow consumers to make a more informed choice. The new regulation, however, goes further by requiring the trader to display the lowest price applied during the reference period (30 days before the date of announcement of the reduction). Thus, in case of differences in the price applied during the reference period, the trader could not choose to show the highest price and mislead consumers as to the actual scope of the sale.
This requirement has several exceptions. First, for perishable goods or products that have been on the market for less than 30 days the reference price shall be the lowest one applied for a period not shorter than 7 days. Second, if the reduction is made in several stages, only the first price before the sale must be announced.
Uniform standards for goods sold within the European Union
The CPA now explicitly announces as misleading practice marketing of goods across several Member States as being identical when in reality, they have a significantly different composition or characteristics. This new regulation comes after the European institutions[1] confirmed that certain goods sold in the Eastern European Member States are of poorer quality than identical ones offered in the “old” Member States. The law clarifies that the misleading character of the offering shall be assessed from the perspective of an average consumer and whether they can easily identify the difference between the goods based on the information provided by the trader. It remains unclear how a product should be labelled so to be clear for the consumers that it has significant differences from identical product offered in another Member State.
Restriction of fake reviews
With the aim to achieve more transparency in digital marketplaces, the CPA also introduces stricter control on consumer reviews. Traders who advertise their products by giving access to consumer reviews will now be obliged to provide information on their authenticity and reliability, such as to indicate whether they can guarantee that the reviews were published by consumers who actually used the product, whether they publish all existing reviews, whether they are positive or negative and whether they have been sponsored. It is also explicitly prohibited for traders to publish or commission publishing of fake positive reviews or endorsements. Deletion of negative reviews is not explicitly mentioned either in the main provisions of the Omnibus Directive or in the CPA. This wording leaves a scope for interpretation as none of the legislative acts unequivocally prohibits such deletion. Recital 49 of the Omnibus Directive stating that manipulating consumer reviews and endorsements should be interpreted as prohibition for “publishing only positive reviews and deleting the negative ones” may serve to a certain extent as guidelines in this respect.
Algorithmic pricing and ranking
Online stores often determine their prices on the basis of demand which they assess by using automated processing of personal consumer data, such as browsing and purchase history, or even depending on the time of day or year. Thus, two consumers may be charged differently for the same product or service on the basis of criteria which are non-transparent for them. The CPA without prohibiting algorithmic pricing imposes an obligation on the online stores to inform consumers prior to the conclusion of the contract that the price has been determined through automated decision-making and consumer profiling.
Traders must inform the consumers what are the main parameters are on the basis of which the ranking of search results has been determined. They must also clearly indicate whether certain search results constitute advertisement or whether they were ranked more favourably in consideration of a payment made to the trader.
The recent amendments to the CPA impose stricter obligations on traders, especially on online sellers. In order to avoid serious penalties, which under certain circumstances (widespread infringements) could reach up to 4 % of the annual turnover, the traders must put in place, among others, mechanisms to verify and guarantee the authenticity and reliability of the consumer reviews they use for advertising; to ensure that their prices and the way they are determined (in case of use of automated tools) are correctly displayed; to label sponsored search results as such; etc.
[1] European Parliament, “Dual quality of branded food products. Addressing a possible east-west divide”, Briefing, June 2017, https://www.europarl.europa.eu/RegData/etudes/BRIE/2017/607265/EPRS_BRI(2017)607265_EN.pdf