Prohibition to perform competitive activity by a partner in a LLC

The limited liability company (LLC) is a favored kind of form to do merchant activities in Bulgaria. Thus, the matter of shareholder’s rights and obligations in an LLC is of particular interest in business life, as various aspects of it are at the core of many theoretical papers and a considerable amount of case law.

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Amendments in the online trading legislation

Amendments in the online trading legislation

In State Gazette, № 20/2022, are published amendments in the Consumer Protection Act (CPA) that will come into force on 28.05.2022. In this article, we will focus on the changes in the law, related to the electronic (online) trade of products and services which don’t include digital elements.

Information about some important aspects of signing distance contracts for providing digital content and digital services, which were also regulated with the said changes in CPA, you could read HERE.

The changes which will come into force on 28.05.2022 for the first time introduce the rules for electronic trade through online marketplaces. The law defines the online marketplaces as a service using software, including an Internet site, part of an Internet site, or an application, operated by or on behalf of a trader which allows consumers to conclude distance contracts with other traders or consumers.

Providing additional pre-contractual information to customers in online trading places

The first and essential obligation introduced by the CPA is related to the extension of the providers’ obligation to provide additional pre-contractual information to consumers, which allows them to make a commercial decision based on clear and objective preliminary information.

Such additional pre-contractual information is basic parameters defining the ranking of the consumer’s offers, made in answer to his search for particular products or services, pointing to the relative importance of the used criteria to rank the offers in comparison to other criteria, used by the provider on the online marketplace. The law introduces an explicit obligation to offer this information in a special part of the online interface, and an easy and direct path should be provided to it from the page containing the consumer’s offers.

Since both traders and non-traders make offers through online marketplaces, the law introduces a requirement for the consumers to be notified if the party that provides the products or services is a trader or not. Also, the consumer has to be notified about the fact that if the party providing the products or services is not a trader, no legal rights of defense will arise for him. However, this does not limit the consumer rights against the provider on the online marketplaces, set forth in the national or European law. It is important to be noted that the law defines an online marketplace provider any trader, which provides an
to consumers.

Publishing of consumers’review

When a trader provides access to other consumers’ reviews for a product, he is obliged to provide information on whether he guarantees that the published product reviews belong to consumers who actually bought the said products. This requirement applies to both online marketplaces and traders’ websites.

If the trader provides the customer with such a guarantee, he has to provide the following additional information: the way he checked the authenticity of the consumers’ reviews, the way to process the consumers’ reviews while pointing out whether all reviews are published, whether they are positive or negative, and whether they were a subject to sponsorship or other contractual relationship with the trader, etc.

Unfair commercial practices

The legislation considers non-compliance with the said obligations as an unfair commercial practice that could lead to penalties for the providers acting in the online marketplace.

The amendments in the CPA related to broadening the hypotheses of unfair commercial practices deserve special attention because applying such could lead to significant penalties imposed by the Consumer Protection Commission on the traders. For example, providing results in answer to online consumer searches with no notification of every paid advertisement or payment made to better product ranking in the search results is now considered by the law as an unfair commercial practice.

Unfair commercial practices are considered also if a trader claims that the product reviews are sent by other consumers who actually used or bought the product without reasonable measures being taken to ensure that the reviews are made by those consumers; provision of fake consumer reviews or references, or assignment of a third party to provide fake consumer reviews or references, or alteration of consumer reviews or public references to promote products’ sale.

If you are a trader engaged in the online trade of goods or services, you may contact us for comprehensive legal advice and drafting of any legal documents required for the lawful conduct of online trading.

This article is up to 31 May 2022 and aims to outline the legislation on the matter. For more information and assistance on legal matters about online trading you could contact us on the following e‑mail:

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