Bulgaria: Are Social Media An Advertising Channel? Approach Of The Bulgarian Competition Watchdog

In the last couple of years social media emerged as one of the most important channels for communication, social contact and information sharing and generates huge online traffic that guarantees access to billions of people.

The companies quickly realized the potential of social media. Nowadays, provision of targeted advertising services like Facebook adverts and Google Adwords generates huge incomes. In addition to "official" online advertising channels, advertisers also use their own social media profiles as a media channel for communication with customers and promotion of products and services. Notwithstanding the obvious advertising power that social media have, still in many jurisdictions they are not considered as a media service provider, rather an information society service provider, and therefore - they do not fall within the scope of local media regulations1.

In recent Store.bg case the Bulgarian Commission on Protection of Competition ("CPC") had an opportunity to discuss whether a post in the Facebook profile of an online retailer could be regarded as an advertisement or not2

Legal Background

The CPC investigation was initiated by a complaint of a competitor accusing "Store" EOOD ("Store"), the operator of one of the biggest Bulgarian online bookstores Store.bg in misleading advertising (violation under art. 32 of the Protection of Competition Act ("PCA")) since allegedly misleading information was posted in the Facebook profile of Store, stating that certain book was offered exclusively at Store.bg. The CPC has a long track record of considering commercial messages that announce some extraordinary features3 of a product/service, as misleading, except if the advertiser is able to support said claim with firm evidence. In the present case, the exclusivity for distribution of the said book was not confirmed and the CPC did not have doubts that information posted was misleading However, the CPC also had to ground its finding that a post in a Facebook profile qualifies as an advertisement.

Store raised several arguments in support of its position that posts in a Facebook profile should not be categorized as ads including:

  • Its Facebook profile was not actively used and it had only few followers, so the post reached limited audience;
  • The Facebook profile was created as a channel for direct communication with customers and was not intended to be a platform for advertising. In that regard, Store claimed that Facebook posts do not qualify as an advertising;
  • The post could not be attributed to Store, because the Facebook profile's password was freely available and every Store's employee, including former ones could post therein.

The CPC decision:

CPC dismissed Store's arguments and ruled that:

  • The Facebook profile was being accessible by anyone (the administrator had not restricted access only to followers) and therefore it had the potential to reach unlimited number of people and to promote the services of Store.
  • Facebook profiles are widely used by merchants for advertising and promotion of their products or services. Therefore, any information posted in the Facebook profiles may influence the market behavior of the customers and should not be excluded from the scope of misleading advertising prohibition as one of the forms of unfair competition.
  • Since Store did not introduce any special rules for posting on its Facebook profile, Store accepted that every employee may manage the profile and post on behalf of Store. Should a specific procedure for approval of postings on the profile was introduced, the company's liability for publishing of misleading information would not have been triggered by post made in violation of the procedure.

In conclusion, the CPC found that Facebook posts have the potential to reach unlimited number of people, since they are easily accessible by all internet users unless access to the profile is restricted and therefore, every post on a Facebook profile might have an advertising effect. The lack of rules for management of a Facebook profile means that the owner of the profile agrees that all of its employees or every person that has legally obtained the password is authorized to post on its behalf and such posts should be attributed to him.

Currently the first instance appeal against the decision is pending before the Supreme Administrative Court.

Footnotes

[1] For example, the Bulgarian Election Code explicitly specifies that social networks, such as Facebook and Twitter, and personal blogs do not qualify as media and do not fall under the regulations of "media service".

[2] CPC Decision No. 946/15.11.2016 (Store.bg).

[3] For example the best; exclusively here; the cheapest, etc.

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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