Contributed By Arochi & Lindner
In the past year, Mexico has seen the introduction of two important new regulations regarding advertising: the Law on Transparency, Prevention and Combat of Improper Practices in Advertising Contracting; and the Outdoors Advertising Law of Mexico City. However, there are many other pieces of legislation which may encompass advertising and marketing, such as:
With its recent laws, the Mexican jurisdiction added authorities that help to oversee advertising and marketing practices. Depending on the case, lawyers have to encompass the same with a specific authority. Below is a list of the regulators that could deal with cases related to advertising and marketing issues in Mexico.
The scope for deceptive advertising is limited depending on the case. Unfortunately, the Mexican jurisdiction is underdeveloped regarding this type of matter and cases are usually seen casuistically. For example, if there is a misleading advertising issue, this can be seen before the Mexican Consumer Protection Agency (PROFECO); but if there is unlawful competition in the matter or a third party’s trade mark is discredited, it can be addressed to the Mexican Industrial Property Agency (IMPI). In Mexico, these kinds of cases must be analysed and prosecuted before the authority it is believed can provide the best approach to the case. Either way, those government entities are empowered to sanction individuals or companies. Shareholders will only be held liable if their individual participation in the illegal conduct can be proved.
Third parties who provide services to the advertiser, are generally not liable for deceptive advertising. However, the parties may agree that the service provided is held responsible for the contents of the publicity and, therefore, it could be possible to pursue civil actions to obtain damages for any penalties imposed by the authorities.
Concerning criminal matters, there is a short list of felonies for which a company can be held responsible as such, addressing the case against its legal representative.
In Mexico there is a non-binding self-regulatory association, the Self-regulation and Advertising Ethics Council AC (CONAR). CONAR’s mission is to exercise advertising self-regulation among its affiliates and establish the legal framework throughout the industry to promote fair competition and defend each Mexican consumer by ensuring that they receive accurate and timely advice through responsible advertising. CONAR is frequently used to enlighten and guide Mexican authorities regarding day-to-day cases that are related to advertising matters.
There are two proceedings available before the Mexican Consumer Protection Agency (PROFECO), in which private parties may challenge advertising practices.
If there is not an agreement between the parties, the consumers may file a civil action obtaining damages from the advertiser that may have been caused by the unlawful advertising.
There are some special rules that apply to specific types of products. For instance, the rules for advertising derived from the Health Act provide specific guidelines and limitations for advertising on various categories of sensitive goods (see the bullet point on the Advertising Consultive Council in 1.2 Regulatory Authorities for a list of such goods). For some of them, special authorisation is required in order to advertise the product; for other industries, a notice given to the authority is enough. Moreover, when the COVID-19 pandemic took hold, social media grew by 1,000% as a publicity venue. The actions of social media users, especially influencers, gave rise to many cases that were prosecuted by competent authorities in Mexico due to misleading advertising, unlawful competition and lack of publicity permits (regulatory).
The pandemic has clearly been an eye opener for the advertising industry. Advertising in social media platforms has been exploding since the pandemic started. One of the key elements of advertising in social media platforms are brands using influencers, and this has been a “trending topic” throughout COVID-19. The massive use and growth of influencers and social media have put a lot of pressure on the system of advertising and marketing regulation in Mexico, highlighting the urgent need for further regulation. Private industry participation is key in this regulation; otherwise, the government’s unilateral work may cause things to be done without the benefit of a thorough legal and technical advertising perspective.
In the past year, Mexico has seen the introduction of two important laws regarding advertising. However, these laws are focused on transparency in advertising contracting and outdoors advertising, and not on the content of advertising materials.
Despite the urge to say “no comment”, it is certainly the case that Mexico’s current administration is trying to modify the advertising industry – targeting the agencies, rather than protecting consumers – and a clear example is the introduction of new laws relating to transparency in advertising contracting and outdoors advertising.
According to the Federal Consumer Protection Law, misleading advertising or abusive information is understood to be that which refers to characteristics or information related to any goods, product or service that may or may not be true, or that could mislead or confuse the consumer by the inaccurate, false, exaggerated, partial, artificial, or tendentious way in which it is presented.
In principle, all advertising claims are subject to regulation. The Federal Consumer Protection Law (FCPL) states that advertising must be truthful; subject to substantiation; clear; and lacking texts, dialogues, sounds, images, trade marks, denominations of origin or other descriptions that induce or may induce error or confusion, due to their misleading or abusive nature.
Claims that may not be objectively measured might be acceptable and not subject to substantiation, provided that they do not violate the legal principles mentioned above.
Implied claims will be analysed on a case-by-case basis to determine if they comply with the principles of the FCPL mentioned above, and empirical evidence is frequently used as a means for their substantiation.
Empirical evidence is frequently used for substantiating advertising claims and the specific type of substantiation will depend on the nature of the claim.
For example, if a claim states that liquid soap kills 99% of bacteria, a laboratory study will be an acceptable means to substantiate that claim. If another claim states that 8 out of 10 individuals prefer hamburgers from Restaurant “X”, then a survey which follows scientific criteria will be an acceptable means for substantiating this claim.
A first aspect to consider is determining whether the product or service shown in the ad is regulated by a mandatory technical standard or not. If the answer is yes, testing must be based on the rules, methods and procedures established in the applicable technical standard. If the answer is no, there will be more flexibility on the testing to be conducted, although it will be important that this testing is based on scientific standards.
The Federal Consumer Protection Law does not specifically mention human clinical studies as the basis for certain types of claims. However, whether human clinical studies are indeed an adequate means for substantiating the claim will depend on the type of claim involved. The characteristics and requirements of the human clinical studies will be determined, if applicable, by a mandatory technical standard or otherwise must be based on scientific standards.
There is no current federal regulation that addresses stereotyping in advertising or inclusion, diversity and equity.
However, some local laws do address this topic, as in some states the dissemination of advertising containing harmful prejudices and stereotypes is prohibited. For example, local laws in Mexico City prohibit the use of sexist stereotypes in advertising, which are deemed to associate denigrating, exclusionary, submissive, racist or derisive messages with women, or to present women, their bodies, or parts thereof as mere objects.
It is claimed that the purpose of these laws is to avoid the violation of the dignity or rights of individuals.
There is no current regulation regarding green marketing/sustainability claims/greenwashing. The government implemented different programmes in order to encourage companies to apply green marketing measures.
The most relevant programme implemented by the Government was called “Plan Verde”, a campaign containing the strategies and actions to put Mexico on the road to sustainable development. This programme, however, did not include binding regulations, and was only implemented by Mexico City Government. Therefore, it is not applicable in other states of the country.
The Industrial Property Law stipulates that signs, phrases, image elements, sentences, advertisements or trade names susceptible to deceiving or misleading the public may not be registered. Additionally, using trade marks with these characteristics may be considered an infringement.
Likewise, the law contemplates that signs that are identical or confusingly similar to geographical areas, whether proper or common, maps, town names or adjectives, when these indicate the origin of the goods or services and may cause confusion or error as to their origin, cannot be registered. Likewise, unregistered use of these signs can also constitute an infringement.
This type of case includes signs that are accompanied by expressions such as “genre”, “type”, “manner”, “imitation”, “produced in”, “with manufacture in” or other similar ones that create confusion in the consumer or imply unfair competition.
The Federal Consumer Protection Law allows for the public comparison between products or services, as long as the information is not false, misleading or abusive; or presented in an inaccurate, false, exaggerated, partial, artificial or tendentious way. In the same vein, the Industrial Property Law (LFPPI) excludes the lawful comparison between products or services from being considered as potentially trade mark discrediting, as long as it is done with informative purposes.
In addition, the Federal Consumer Protection Law gave powers to PROFECO to issue guidelines for comparative advertising, with the purpose of avoiding said comparative advertising inducing consumers into error or confusion. Up to the present day (September 2022), PROFECO has only issued one set of Guidelines dealing exclusively with the procedure and requirements for the comparison of prices of identical goods or services which are commercialised by different providers. The guidelines were published back in 2009.
There are some specific requirements that must be taken into account with regard to comparative advertising claims in addition to the ones applicable to general advertising claims. In this sense, the Federal Consumer Protection Law states that the information or advertising that compares products or services, from the same brand or from different brands, shall not be misleading or abusive as said terms are defined in the law (see 2.1 Deceptive or Misleading Claims).
With regard to the comparison of prices of goods or services, the specific requirements established in the Federal Consumer Protection Agency’s 2009 Guidelines must be observed. These requirements include that:
Comparative information will be valid for five days counted from the date of purchase or the date of certification of a notary public/commercial notary public.
The Federal Consumer Protection Law allows any individual or company to denounce a violation of that law before PROFECO, for example if an ad violates the principles established in said law (eg, that all advertising shall be truthful and not misleading). PROFECO will initiate an investigation of the denouncement and if it considers that the ad violates the law, it may order its suspension and/or impose a fine on the advertiser.
The Advertising Self-Regulation and Ethics Council (CONAR) also has a procedure to settle disputes between its members or between parties that, without being members, agree to submit themselves to CONAR’s procedure regarding advertising claims.
Comparative advertising is not as frequent in Mexico as it is in other countries (eg, the USA). The most common practice in Mexico is price comparison which can be seen directly by the consumers in supermarkets, and which is a useful means for them to be sure that they are paying a lower price than the one available in other establishments.
Unfortunately, there are no specific rules or regulations that apply to social media in Mexico. To enforce the same, we would have to go to the basic rules of Mexican advertising legal enforcement as explained in 1. Legal Framework and Regulatory Bodies.
The lack of legislation is a major challenge for marketers advertising in social media.
There are no strong precedents on advertiser liability that indicate a settled position on this issue. There are divergent opinions on the level of responsibility that social media and site administrators hold for the content posted on their platforms by third parties (users). The adoption of best practices, such as removal of content procedures and “notice & take down” techniques, immediate reaction from the site administration to remove problematic ad content, or policies to suspend user accounts that do not comply with the terms and conditions of the site, may protect those social network or advertisers’ administrators from legal responsibility under a safe harbour regime. The foregoing will apply only if the social network or advertiser did not directly participate in the illegal act.
As there are no specific rules or regulations that apply to social media in our jurisdiction, the same rules that apply to traditional media advertising would also apply to marketing through social media. It would mostly depend on the nature of the product or service, rather than the channel of disclosure.
There are no regulations specifically addressed to the use of social media platforms in force. However, if any of these social media platforms involve activities related to e-commerce or marketplaces operations (eg, Facebook), there are specific regulations for this activity in particular; mostly, for the sellers, rather than the users.
In addition, it shall be analysed if there are other activities of the platform that could imply regulations of other nature: eg, money reward programmes based on number of views or likes when the performer/user is a minor.
There are no special rules regarding “native advertising”, other than complying with the regulations for regular publicity.
There are no special rules regarding misinformation on topics of public importance, other than complying with the regulations for regular publicity.
Due to the COVID-19 pandemic, the use of influencer campaigns has been a “trending topic” for trade marks and brands all over the Mexican market. As a result of the lack of legislation, the benefits of marketing using influencers is being taken advantage of. For example, the Mexican Health Law prohibits medical professionals from publicising on any type of platform without a permit issued by the Mexican FDA. Due to the time of issuance of the permit and because these campaigns are time sensitive, brands use influencers in the maternal product space (eg, to promote milk formula in the different platforms). This is one of the examples of how the lack of legislation permits brands to use different strategies that permit a new way of marketing products.
Unfortunately, as mentioned in 4.1 Special Rules Applicable to Social Media, we do not have any type of legislation nor guidelines specifically established to regulate the use of influencer campaigns in the Mexican jurisdiction.
Due to the lack of legislation regarding the day-to-day activity of influencers in our jurisdiction, everything related to the same emanates from a private contract between the influencer, the brands and sometimes the agencies.
There is no current regulation addressing fake reviews or banning employees or companies from posting online reviews of their own products. However, these activities are considered as improper practices and should be discouraged, as they could lead to commercial consequences or bad reputation.
The use of any personal data must be done with a verifiable consent from the data owner and, in order to obtain such consent, it is necessary to notify the type of data processing through a privacy notice which must be available to the data owner prior to such processing. Where the personal/contact data has been obtained indirectly, the privacy notice must be made available to data holders in the first contact with the data controller, which means in the very first marketing email.
The privacy notice used in marketing emails is a short one version and must contain at least (i) the controller’s name and address, and (ii) the purposes and means to access and consult the full version of the privacy notice. If after receiving/reviewing the above-mentioned information, the data holder does not oppose the processing of their personal data for marketing purposes, then the company can continue to send them emails. However, to cater for those who do not wish to receive this type of communication, the use of opt-out mechanisms is highly recommended, and these should be enabled in every email sent.
For violations of privacy or data security law, the law provides a list of actions that are grounds for sanction. Fines range from 100 to 320,000 times the current minimum daily wage (approximately USD5.38). For recurring infringements, an additional fine may be imposed and may be doubled when the case involves sensitive data. Sanctions may be imposed without prejudice to any civil or criminal liability that could arise.
As in many of the existing privacy legal frameworks, opposition is one of the rights considered in privacy and data protection regulation in Mexico. This right is mainly focused on non-core purposes and, as marketing is always considered as being for secondary purposes, the data owner can exercise this right at any moment. The data controller must act accordingly in order to comply with the local regulation; otherwise, one of the sanctions mentioned in 6.1 Email Marketing may be imposed.
Telemarketing is aligned with privacy regulation if:
As mentioned, the use of personal data is allowed for secondary purposes (in this case through text messaging) if a data holder grants their consent after having been informed about the personal data processing and does not object to the use of their data for the informed purposes. Unsubscribe lists and opt-out mechanisms must be enabled too.
Non-compliance with these requirements could lead to sanctions considered in the Mexican privacy legal framework.
Although most of targeted/interested-based advertising currently depends on the use of AI, cookies, bacons, and similar technologies, the local legal frame only considers informing the data owner of the use of this type of technology (if any) and the way to disable it as a statutory requirement. As with the other elements of data processing, this information must be part of the privacy notice.
Fortunately, awareness of privacy and data protection is rising and the use of tools/mechanisms for easy customisation of this type of technology is increasing.
Unfortunately, the local privacy legal framework does not consider special rules/requirements for processing children’s personal data. Thus, the criteria for processing the data of this community are the same as those applied to adults’ data processing.
Notwithstanding the above, Mexican privacy law considers children to be a “special” sector, and it establishes that data processing must be carried out without the use of misleading or fraudulent means. Thus, any abusive use of children’s data shall be prosecuted and punished, and potentially increases the sanctions that may be imposed by the authority.
Having said this, it is highly recommended that the privacy notice be consented to using a checkbox as well as the implementation of plug-ins for age verification.
If the sweepstakes or chance-based contests are carried out within Mexican territory (eg, if the draw will take place in Mexico), there will be a need to obtain a prior permit from the Ministry of the Interior.
Consumers may be required or requested to make a purchase in order to participate, but in this type of promotion, the organiser must file a notice before PROFECO at least 72 hours prior to the start of the relevant promotion.
Mexican law distinguishes between contests of skill and games of chance. In accordance with the applicable legal framework, games of chance are based upon randomness and the result of the game is totally outside the player’s control. A game of skill, on the other hand, implies that its result is not based upon randomness and that the player’s skills will determine the outcome of the game.
The organiser of a game of chance to be carried out in Mexico (eg, if the draw will take place in Mexico) must obtain a prior permit from the Ministry of the Interior. This procedure may take from four to six weeks to be concluded. The authority will analyse on a case-by-case basis the mechanics of the game to ensure its fairness. The organiser will be asked to hire a bond to guarantee the payment of the prizes.
If the game of chance includes a purchase requirement, the organiser must additionally file a notice before PROFECO at least 72 hours prior to the start of the game of chance.
Contests of skill do not require a permit from the Ministry of the Interior. Nevertheless, if these contests include a purchase requirement, the organiser must file a notice before PROFECO at least 72 hours prior to the start of the contest.
Although there are no special laws or regulations that apply to loyalty programmes, the general provisions of the Federal Consumer Protection Law (FCPL) are applicable. In this sense, whatever terms and conditions are presented by the goods/services provider to the consumer, said terms and conditions must be honoured. Non-compliance in this regard will be deemed as a violation of the FCPL.
In the case of offers, the Federal Consumer Protection Law (FCPL) establishes the following specific rules.
If the offering party does not comply with its offer, the consumer may opt for:
In all three cases the consumer will have the right to receive a monetary payment representing the difference between the offer price for the goods/services and the regular price. In addition, the consumer will have the right to a monetary compensation equivalent to 20% of the price paid by the former.
The Federal Consumer Protection Law (FCPL) and its Regulations establish that automatic renewal/continuous service offers under which a marketer can continue to ship and bill for products and services on a recurring basis until the consumer cancels may be carried out, provided that the consumer has previously authorised the charges or that said charges derive from a related contract. If these requirements are not met, the above-mentioned offers would violate the FCPL and its Regulations.
In Mexico, sports betting and other forms of gambling are in all cases subject to heavy regulation under the Federal Law on Betting and Gambling (FLBG), and its Regulations.
Companies intending to engage in the business of sports betting and gambling require a prior permit from the Ministry of the Interior.
The above-mentioned permits may only be granted to companies incorporated under the Mexican laws (although foreign investors may be shareholders of said Mexican companies).
The permits’ term may run from one to 25 years. The permits may be renewed for subsequent terms of 15 years each, as long as the permit holder is in full compliance with the terms and conditions established in the permit and the obligations established in the FLBG and its Regulations.
Consumers of sports betting and other forms of gambling may only be individuals of legal age (18 and above).
The Regulations to the Federal Law on Betting and Gambling establish some specific rules that apply to the advertising and marketing of sports betting and gambling.
As referred in 4.1 Special Rules Applicable to Social Media, there are no specific rules or regulations that apply to advertising, depending on the broadcasting channel, but only general provisions. For their part, Mexican e-commerce policies are still in constant development. As of today, e-commerce is largely regulated by three norms and a tool to enable “good practice”:
The Ethics Code and digital seal implemented by PROFECO are voluntary and considered as a basis of good practice. In addition, cryptocurrency is not recognised as a legal tender in Mexico, nor recommended to consumers/users. Non-fungible tokens (NFTs) are slowly gaining recognition, with no specific regulations to be issued in the near future, but concerns remain relating to basic offers and civil norms and copyrights. Unfortunately, the Mexican legal system is not particularly forward-thinking in regard to developments in information and communication technologies (ICT).
There are no laws or regulations addressed to the metaverse, nor ruled cases, whether related to advertising or any other subject. First of all, jurisdiction urgently needs to be established: to what extent Mexican authorities are entitled to act in a virtual world that has no physical borders. In light of this issue, Mexican authorities may only intervene when the advertiser is a Mexican company, the server that holds the virtual space is located in Mexico, or if the affected consumer is Mexican or physically located in Mexican territory, despite its avatar.
Mexico has not issued any law or regulation addressed to digital advertising platforms or the use of adtech, so all related cases have to be grounded on standard advertising regulation, unless they involve issues related to cybersecurity (eg, phishing, fraud), which will require the assessment of possible criminal law application.
Advertising related to food supplements, alcoholic beverages, medicines, herbal remedies, medical equipment, and toxic or dangerous substances must have a permit from the Ministry of Health. Depending on the specific case, some products must contain in their advertising a message of social responsibility regarding the consumption of such products.
Advertisement is not permitted where consumption of products is prohibited in Mexico: eg, vapers, cannabis (with exceptions for personal use but not advertising), and cryptocurrency operations. In addition, specific authorisation from the Central Bank (Banxico) and the National Banking and Securities Commission (CNBV) must be obtained before the advertisement of financial services, with permits granted to operate on specific financial/monetary activities.
Moreover, all advertising related to special events must be careful not to infringe sponsorship spaces and/or commit activities that may amount to ambush marketing. Private entities, such as FIFA, yearly issue their own guidelines to avoid advertising misconduct during their soccer events. Cases of this nature may be addressed to the Federal Economic Competition Commission (COFECE).
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