During the past several years the Bulgarian Commission on
Protection of Competition ("CPC") has devoted special
attention to advertisements promising the "best product /
service," the "lowest price" or the "highest
quality." The authority was quite suspicious of such claims
subjecting them to rigorous analysis and in most cases it concluded
that the advertisers were misleading the general public, because
the respective offering was deemed an exaggeration in one way or
Following this logic in July 2014 the CPC imposed а fine
on Kaufland Bulgaria ("Kaufland") (the largest retailer
in terms of market share) in excess of BGN 542,000 (approx. EUR
277,000) for advertising "the lowest price"
offers2. On appeal the decision was overruled by the
Supreme Administrative Court ("SAC")3.
Misleading and unlawful comparative advertising are regarded as
forms of unfair competition, giving rise to administrative
liability for both (i) the party, that has procured the
advertisement, and (ii) the author of the unlawful content (e.g.
advertising agency). The misleading advertising violation is
defined on the basis of the ability of an advertising message to
distort the economic behavior of consumers, thereby causing harm to
The rules against misleading advertising are enforced by the CPC
- an independent governmental agency. If the authority finds that a
violation has been committed, it may require discontinuation of the
prohibited behavior and impose fines on the advertiser and the
agency which may reach up to 10% of their total annual turnover in
Case History and Decision
The CPC investigation was initiated on self-approach triggered
by the promotional claim "highest quality at the lowest
price," used by Kaufland in relation to foods offered under
its private label "K-classic." The slogan was featured in
various short-term promotional activities over the period 2011 -
The authority reviewed in detail the procurement and sales
procedures of Kaufland and found that the retailer had indeed
introduced a quality control system with the aim to ensure the high
quality of all "K-classic" products. Finding that the
monitoring system was satisfactory, the CPC ruled that the first
claim ("highest quality") was justified.
In relation to the price claim ("...at the lowest
price"), the CPC found that Kaufland had introduced and
implemented a system for monitoring the prices of identical or
similar products offered in competing retail chains. Whenever
Kaufland detected a lower price, it decreased its own prices below
or at the same level with its competitor. Moreover, Kaufland
announced that every customer who had purchased a competing product
at a lower price was entitled to receive the difference with
Kaufland's own price, and it did comply with this promise. At a
later stage Kafuland changed the "compensation" procedure
and started to offer a small gift to vigilant consumers.
Despite the numerous features of Kaulfand's promotional
system which aimed to guarantee customer satisfaction, the CPC
ruled that the slogan was misleading. The main concern of the
authority was that when Kaulfand reacted to lower price
notifications by decreasing its own price, its new price was not
always below that of its competitors – in many cases Kaufland
was only matching their price. According to the CPC, such behavior
was in contradiction with the second part of the slogan
("...at the lowest price"). The reasoning of the
authority contained a detailed discussion of the grammatical forms
of adjectives and concluded that the superlative form requires
uniqueness, which in its view meant that Kaufland would only comply
with its promise if it had decreased its prices below the level of
any competitor. Price-matching, on the other hand, led only to
identical prices, which were not unique and therefore not "the
On appeal SAC overruled the CPC decision basing mainly on
linguistic and grammatical analysis, prepared by court-appointed
linguistic experts, who took the position that the superlative form
does not require uniqueness of the object because it describes a
relation to the ultimate limit of quality, which was a feature that
can be shared. Relying on this logic the court accepted that
"the lowest price" claim would be correct not only where
Kaufland is selling "K-classic" goods at prices below any
other competitor, but also where the price is identical with the
lowest price offered by a competitor. Consequently, the
advertisement was deemed not to be misleading and the CPC decision
1 CPC Decision no. 1715/2013 (Billa), CPC Decision no.
2 CPC decision no. 874/2014 (Kaufland).
3 Decision no. 7713/2015 on case no. 10159/2014, Supreme
Administrative Court, IV Chamber.
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.
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