At the beginning of September 2024 the Consumer Protection Commission (“CPC”) imposed a prohibiton on mobile network operators in the Republic of Bulgaria for the application of unfair aggressive commercial practices, consisting in charging additional penalties (fees) for early termination of a contract.
As a standard, the mobile network operators envisage a penalty clause in the amount of 3 monthly fees for the respective subscription plan, which applies in case of early termination of a contract for electronic communications services at the fault or the initiative of the consumer.
In addition, the contracts contain discount clauses under which the users of the relevant services receive seemingly preferential terms in respect of the monthly fees (reduced amount) or price of devices they purchase in connection with the particular contract. When the user terminates the contract early, however, the mobile network operators charge additional amounts which are again in practice of penalising nature (e.g. if the user purchases a device at a discounted price, the difference between the market price and the price paid becomes due by the user). As an end result, this circumvents the set maximum penalty threshold of three monthly subscription fees for natural persons.
The CPC acknowledges that the aggregate “sanctions” (penalties in strict sense and additional amounts) imposed by mobile network operators for the same non-performance characterise the penalty as unreasonably high, where the clauses in which these are provided – as stipulated to the detriment of the consumer and not meeting the requirement for good faith. In the regulatory body’s view, the penalties thus envisaged also fail to meet the principally characteristic functions of the penalty, namely – the compensatory and the securitization functions. The practice in question leads to a significant imbalance between the rights and obligations of the mobile network operator and the consumer, as it unlawfully prevents the latter from exercising his/her right for early termination of the contract. This is the reasoning behind the prohibition orders issued by the Chariman of the CPC.
According to the publicly available information, the immediate implementation of the orders has been appealed by all three mobile network operators before the Supreme Administrative Court, where any further development in this regard should be monitored.
