The National Consumer Protection and Arbitration Agency(1) (the Agency) has penalised a worldwide leading online messaging service platform for violating the terms of Consumer Protection Law No. 24,240 (CPL). The fine amounted to 5,000,000 Argentine pesos (approximately $47,000), which is the highest fine that has been set by the CPL.
The company did not file a defence within the corresponding legal term.
After analysing the evidence of the case, the Agency penalised the company for considering that several provisions of its legal terms that had to be accepted by the users in order to use the service were in breach of the obligation to provide accurate, clear and complete information.
The following are some of the clauses challenged by the Agency:
- limitation of liability with regard to consumers, who assume all risks for the use of the service;
- possibility of imposing a fee for the use of the services without specifying the amount and the cases where such fee would be applicable;
- right to unilaterally modify the terms of service;
- authorisation to terminate the agreement without cause and even if the user has not breached any of its terms;
- a company's right to choose the venue in case of conflict. Argentine users were required to file their claims with the courts in the state of California, United States;
- English version of the terms and conditions is the valid and governing document; translations are only provided for information purposes; and
- restrictions on consumers' privacy and data protection rights by stating that the personal data may be shared with third parties at the company's discretion.
In addition to the fine imposed, the Agency ordered the company to provide evidence supporting the removal of the challenged clauses within five business days and to publish the resolution at its own expense in a widely circulated newspaper in the city of Buenos Aires.
The company was allowed to appeal the decision.
As a result of this type of penalty, it is crucial to prepare and carefully review the terms and conditions and privacy policies of applications, sites and online platforms so that they comply with the regulations in force.
For further information on this topic please contact Mariano Peruzzotti, Mateo Darget or Andrea Sanchez Vicentini at Ojam Bullrich Flanzbaum by telephone (+54 11 4549-4900) or email ([email protected], [email protected] or [email protected]). The Ojam Bullrich Flanzbaum website can be accessed at www.ojambf.com.
(1) La Dirección Nacional de Defensa del Consumidor y Arbitraje en Consumo.