Bulgaria’s Commission for Protection of Competition (CPC) has fined online electronics retailer Laptop.BG about 47 300 leva, on the grounds that the contents of a YouTube video posted by an unaffiliated third party constituted unfair trade practice towards a competitor.
The ruling adds to CPC’s short list of cases involving online commerce, but also raised questions about the watchdog’s ability to navigate the challenges posed by the disruptive nature of the industry.
The complaint was lodged by Golden Green Stone Group, owner of the eVarna online retailer, which claimed that two YouTube videos posted by user Noobcleaver Gaming (misidentified in CPC’s ruling as Noobclever Gaming) damaged its reputation. The company claimed that the user, whose name is Dimitar Kozhouharov, was “sponsored” by Laptop.BG.
The videos, posted in January 2017, show Kozhouharov describe eVarna as “frauds”, criticising a personal computer configuration offered by the retailer for incomplete information and poor design choice. He speaks favourably of desktop.bg, a website owned and operated by Laptop.BG, when comparing eVarna’s offer – which appears to have prompted the complaint.
In reply, Laptop.BG said that it had no contractual relationship with the YouTube user, did not have any editorial input on those videos, nor did it condone the tone of the videos, but could not take a stand regarding Kozhouharov’s videos because these represented his point of view. The only connection to Kozhouharov is offering a promo code that potential buyers can use for a discount when purchasing goods from Laptop.BG.
However, CPC ruled that Laptop.BG had not made an “active effort to distance itself” from Kozhouharov’s statements, thus breaching the fair trade practice clauses of Bulgaria’s competition law. “Even though Laptop.BG cannot influence the freedom of speech of an individual, CPC believes that accepting negative advertising through online videos, which promote its own operations, does breach fair trade practice,” the regulator said.
This is not the first time that CPC has courted controversy with its rulings on ecommerce. It has previously fined online electronic goods and household appliances retailer eMAG, ruling that its breached fair-trade practices with its Black Friday sales event – a decision that was seen largely favouring traditional brick-and-mortar appliance retail chains.
The fine of 47 300 leva represented 0.5 per cent of Laptop.BG’s net revenue for 2016. CPC also ordered the retailer to pay eVarna’s 2500 leva in litigation costs. The fine can be appealed within a period of 14 days at the Supreme Administrative Court, the regulator said.