Latvian Consumer Protection Center Fines Companies for Unfair Practices

According to a report from Delfi.Biznes on July 17, the Latvian Consumer Rights Protection Center (PTAC) has decided to impose fines of 50,000 euros each on two companies, SIA "Coss" and SIA "Nord Snus," for their unfair business practices.

In addition, these companies must immediately cease any unfair business practices that are discovered.

The PTAC has stated that these companies have been posting prohibited advertisements for e-cigarettes, e-liquids, and tobacco alternative products (nicotine pouches) on internet platforms such as Instagram, TikTok, and Facebook. Additionally, the companies have also been placing false advertisements in retail stores.

During the investigation, PTAC identified the following violations:

Violations of restrictions on advertising for e-cigarettes, e-liquids, and tobacco alternatives (nicotine pouches); placement of advertisements for e-cigarettes in specialty stores should be done in a way that consumers can see them from the entrance of shopping centers (e.g. on mats, recycling bins, or posters); providing misleading information and statements claiming that e-cigarettes are less harmful than traditional tobacco products. For example, claiming "e-cigarettes are at least 95% less harmful than smoking"; creating the false impression for consumers that e-cigarettes are a "healthy" product or help prevent diseases by referencing research from other countries. For example, "e-cigarette products are important for reducing the risk of smoking-related diseases"; failure to comply with legal requirements prohibiting the display of images of people smoking or using tobacco alternatives and smokeless tobacco products in advertisements.

The PTAC evaluated the misconduct and solicited opinions from relevant authorities. PTAC believes that in business practices, information should not be provided suggesting that e-cigarettes are less harmful than traditional cigarettes, especially when the long-term health effects of e-cigarettes have not been fully studied. E-cigarettes and traditional cigarettes cannot be comprehensively compared.

These unfair business practices have impacted a large number of consumers. Evidence includes the number of followers on these companies' social media accounts, the number of retail stores in Latvia, and the accessibility of their social media accounts to a wide consumer base. For example, advertising videos on TikTok autoplay, making them easily seen by minors, attracting the attention of young people and children, sparking their interest in these products, and even prompting them to make purchases or persuade their parents to do so.

The PTAC emphasized that this marketing communication channel and advertising methods for e-cigarettes and their alternatives have had a significant negative impact on vulnerable groups in society such as adolescents and children.

Considering the scale, nature, and duration of the violations (at least 6 months for SIA "Coss" and at least one year for SIA "Nord Snus"), the impact on consumers' legal rights, as well as the potential risks and harms to consumer health, the actions of these companies have been deemed to be serious violations.

These decisions can be appealed to the court within one month after they take effect following the specified procedures.