Funeral agency fined for not complying with earlier CPC decision

06 August 2019 | newsletters

On 27 June 2019 the Commission on the Protection of Competition (CPC) issued a decision in which it penalised funeral agency Elida MG EOOD (formerly Pokoy-1945 EOOD) for failing to comply with an earlier CPC decision. Such cases in which an undertaking fails to comply with a CPC decision and is therefore fined again are extremely rare due to the substantial pecuniary penalties which may be imposed on violators.

Earlier decision

In July 2018 the CPC fined Elida MG for imitating the name and web domain of Pokoy EOOD, an agency also specialising in the provision of funeral services. On its foundation in 2017, Elida had originally been named Pokoy-1945 EOOD, thus directly imitating Pokoy's name and confusing existing and potential clients. In Bulgarian, the word 'pokoy' means 'rest', which is a suitable name for a funeral agency. The problem in this case was that there were two totally unrelated players with almost identical names on the market for the provision of funeral services, thus leading to confusion among clients.

Further, Elida was found guilty of factually copying Pokoy's domain (ie, 'www.pokoybg.com', whereas Pokoy's website is 'www.pokoy.bg') and sending text messages to Pokoy's clients informing them that "the Pokoy funeral agency has moved in to a new address, following an organizational restructuring of the company". The CPC logically ruled that Elida had consciously aimed to mislead clients by making them believe that it was the legal successor of the popular and existing (since 1994) funeral agency Pokoy EOOD. Elida was adjudged to be trying to take advantage of Pokoy's strong market position and steal its clients. Since there was no relation between the two undertakings, Elida's actions were considered unacceptable under Bulgarian competition law.

The CPC fined Elida (at that time Pokoy-1945 EOOD) for imitating Pokoy and attempting to mislead its clients and ordered the funeral agency to immediately change its name and web domain.

Failed compliance

In December 2018 Pokoy filed a signal to the CPC stating that Elida (at that time Pokoy-1945) had not observed the July 2018 decision. Elida admitted to not changing its name and web domain, arguing that it had challenged the CPC's decision in the Supreme Administrative Court (SAC). Elida stated that since the SAC had yet to deliver a definite decision, it was not obliged to comply with the CPC's decision.

The CPC was adamant that orders for ceasing ongoing violations are subject to an immediate execution. The SAC supported this verdict, thus rendering Elida's submissions unacceptable. Elida was therefore fined again, this time for failing to comply with the earlier decision and immediately change its name and web domain.

Comment

Such cases in which an undertaking fails to comply with a CPC decision and is therefore fined again are extremely rare due to the substantial pecuniary penalties which may be imposed on violators. The CPC always makes clear that its enforcement orders are subject to immediate execution; however, in this case, the order had been unnecessarily challenged by Elida.

This article was co-authored by Rosen Manchev (trainee, Schoenherr Bulgaria).

This article first appeared on International Law Office.

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Galina Petkova

Attorney at Law

T: +359 2 93310 83
g.petkova@schoenherr.eu

legal service:

eu & competition

country:

bulgaria