New Rules for Consumer Protection and Transactions with a Digital Element

June 09, 2022

New Rules for Consumer Protection and Transactions with a Digital Element

From the beginning of 2022 significant legislative changes have been made in the field of consumer law, aimed at modernizing consumer protection rules and adapting them to the digital economy. A new Act on the Provision of Digital Content and Digital Services and on the Sale of Goods (hereinafter referred to as “APDCDSSG”) entered into force on 1 January 2022, while amendments to the Consumer Protection Act became effective on 22 May 2022 (hereinafter “CPA”). With the abovementioned legislative changes in practice the requirements of a package of acts of the European Union, including The Digital Content and Digital Services Directive (Directive 2019/770), the Sales of Goods Directive (Directive 2019/771), the Omnibus Directive (Directive 2019/2161), are introduced in the Bulgarian legislation.

The new provisions – for both traders and consumers, include:

New and higher amounts of sanctions for traders

From May 2022, the amount of most of the existing sanctions for infringements of the provisions of the CPA increase. For example, a company that impedes the consumer’s right to withdraw from a distance contract will now be subject to a sanction from BGN 2,000 to 5,000 (instead of from BGN 1,000 to 3,000, as has been the case so far). A new sanction in a significant amount is also introduced for infringements that can be classified as “widespread infringement” or “widespread infringement with a Union dimension“, which both arise when there is a negative effect on consumers in more than one country from the European Union. In case an infringement of such type is found, the control bodies may impose a sanction in the maximum amount of 4% of the turnover in the country during the previous financial year or up to BGN 3 920 000, when there is no information about the turnover realized by the infringer during the previous financial year in the Member States of the European Union, affected by the infringement. There are also criteria to be taken into account when determining the amount of the sanction (e.g. what is the gravity and extent of the infringement, whether the trader has taken any actions to remedy the damages, etc.).

Transactions with data and goods with digital elements

The APDCDSSG introduces several new terms with specific meaning: digital content – the definition is broad and includes generally all data in digital form (e.g. audio / video files), digital service – covers services that allow different forms of data processing or access to data (e.g. e-book subscriptions, access to cloud services), goods with digital elements – these are goods that in the absence of digital content or digital service could not perform their functions (e.g. any “smart” devices). The new regulation provides for liability, respectively means of consumer protection, in the event in which purchased digital content, digital service or goods with digital elements do not meet the requirements, specified in the contract or the requirements, which follow from the usual practices of marketing similar products, or are improperly installed by the trader. Issues related to the liability for installing technical updates are also settled.

In line with the latest developments in the consumer protection and the value of personal data in today’s digital society, the scope of the APDCDSSG includes the provision of digital content or digital service by a trader to a consumer, where instead of paying a price, the consumer provides in return personal data, insofar as the personal data are used for a different purpose (i.e. not necessary for the provision of the service).

Online marketplaces

More obligations are provided for the traders who provide online marketplaces. According to the CPA, an online marketplace place is “a service using software, including a website, part of a website or an application, operated by or on behalf of a trader which allows consumers to conclude distance contracts with other traders or consumers“. It is envisaged that consumers of online marketplaces will have to be provided with additional information, including with regard to the parameters, determining the ranking of offers made to the consumers, information on whether or not the third party offering the goods, services or digital content is a trader or not, consumer rights and the respective obligations of the provider of the online marketplace and the person offering the respective goods or services, if different from the provider of the online marketplace.

New situations of unfair commercial practices

According to the amendments to the CPA, an unfair commercial practice will be the any marketing of a good, in one Member State, as being identical to a good marketed in other Member States, while that good has significantly different composition or characteristics (unless justified by legitimate and objective factors). An unfair commercial practice will also be considered the non-provision of a certain amount of information, including: the terms of payment, delivery and performance, if they deviate from the requirements of good faith and professional competence, the main parameters determining the ranking of products, when there is a possibility to search by keyword, as well as information related to consumer reviews.

For further information contact:

Victoria Marincheva, Senior associate

Konstantin Mladenov, Associate