On 5 September 2019 the Commission on the Protection of Competition (CPC) fined Expres 2019 EOOD 4% of its annual turnover for the unfair solicitation of customers.
Expres, a distributor of Patos Patatos crisps, launched a promotional campaign that gave consumers the opportunity to win exclusive prizes, including bicycles, tablets, iPhones, PlayStations and even a Toyota car. In order to win, consumers had to complete a sticker album using stickers contained in Patos Patatos packaging.
Intersnack Bulgaria EOOD, the official distributor of ChioChips and Pombär snacks in Bulgaria, considered Expres's promotional campaign anti-competitive and filed a complaint with the CPC.
Intersnack argued that potential customers would be encouraged to buy the snack not for its taste and quality, but rather for the opportunity to win exclusive prizes that were too expensive for the average consumer. In so doing, Expres had allegedly violated Article 36(3) of the Competition Protection Act, which forbids sales that depend on (among other things) lottery games for cash or prizes of a significantly higher value than the price of the goods or services being sold.
As Expres's promotional campaign had no official terms and conditions, the CPC examined the facts of the company's promotional campaign.
The sticker album comprised several images of potential prizes. Participants needed to collect eight different stickers by purchasing at least eight packets of Patos Patatas in order to complete an image and thereby win the prize.
The commission relied on earlier CPC practice to determine whether the campaign infringed Article 36(3) of the Competition Protection Act. To this end, the CPC applied two legal prerequisites:
- prizes must be won by purchasing the relevant goods or services; and
- prizes must be worth more than 100 times the product price or more than 15 times the Bulgarian minimum wage.
The CPC estimated the minimum price of an iPhone X, PlayStation 4 or Toyota car to be more than 100 times the price of eight packets of crisps, which would be the minimum number required to complete the sticker album. Expres argued that it is only a distributor and not a producer of Patos Patatos; however, it was undeniably proven that the company had engaged in such promotional activity.
The CPC further held that promotional campaigns that offer prizes which are 100 times more expensive than the price of the purchased goods are "against the rules" and amount to the unfair solicitation of customers.
This decision is a helpful reminder that companies must carefully consider which prizes to offer in promotional campaigns to avoid competition law violations. Further, it establishes clear guidelines about which prizes are acceptable in this regard.
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