Misleading advertising practices in Brazil

Misleading advertising

How is editorial content differentiated from advertising?

Editorial content has a journalistic format, with the sole purpose of transmitting to society a fact or an event, even if it is the coverage of the launch of a new product. In principle, the editorial is created with no influence of the advertiser.

Advertising is intended to promote a product or service, with the purpose of encouraging consumers to acquire them. If advertisers influence the editorial in any way, as in the case of influencers, there is a need to indicate that the editorial is advertising.

How does your law distinguish between ‘puffery’ and advertising claims that require support?

In the Brazilian laws and regulations, there are no provisions related to puffery; therefore, there is no basis to distinguish, with precision, puffery from claims that require support.

However, CONAR has already recognised in a few cases that some claims can be considered as puffery. According to such decisions, puffery is configured in the cases of using exaggerated or even playful expressions that, do not mislead the consumer by any means.

What are the general rules regarding misleading advertising? Must all material information be disclosed? Are disclaimers and footnotes permissible?

Any advertisement that, even through omission, is entirely or partially false or is in any way capable of inducing the consumer to make a mistake regarding any characteristic of the product or service advertised is considered misleading advertising.

Abusive advertising includes adverts that:

• have a discriminatory nature;
• incite violence or exploit fear or superstition;
• take advantage of a child’s lack of judgement or experience;
• disrespect environmental values; or
• may cause the consumer to behave in a way that will bring harm to his or her health or safety.

Disclaimers and footnotes are permissible in Brazil; however, some precautions have to be taken to make such tools valid, for instance, disclaimers must be implemented in a horizontal position; be readable to the average person; contain all the information necessary to support and clarify the claim; among other things.

Must an advertiser have proof of the claims it makes in advertising before publishing? Are there recognised standards for the type of proof necessary to substantiate claims?

The advertiser must have proof of a claim’s content if and when requested by the authorities, consumers or competitors.

There is no standard for the type of proof required to substantiate the claims. However, the proof must be substantiated or be issued by a third party with recognised expertise.

Are there specific requirements for advertising claims based on the results of surveys?

There are no specific requirements for advertising claims based on the results of surveys. However, the claims must be substantiated in real results, and preferably validated by a third party with recognised expertise and know-how.

What are the rules for comparisons with competitors? Is it permissible to identify a competitor by name?

Comparative advertising is accepted in Brazil. According to the applicable legislation, the primary purpose shall be the clarification or the consumer’s protection. Therefore, among other requirements, the comparative advertisement shall be objective and supported by evidence, shall not make any confusion between the products and the competitor’s brands and there shall be no unfair competition or denigration of the image or another company’s products.

Based on the dispositions of the Industrial Property Law, there is a constant debate related to the right to use a competitor’s brand or products in comparative publicity.

The Supreme Court recently issued two important decisions in which the right to use a competitor’s brand and products in comparative advertising, restrictively in cases where the publicity brings relevant information to the consumer, was recognised.

The Supreme Court decisions are positive and will allow companies to compare their products with others, with evidence, and will, above all, provide consumers with important information to help them decide which product best fits their demands and needs.

Do claims suggesting tests and studies prove a product’s superiority require higher or special degrees or types of proof?

There are no provisions in the applicable regulation relating to special types of proof. However, because competitors may challenge the proof or the substantiation presented by advertisers, it is necessary to support a claim with strong data, preferably issued by a third party with unquestionable competence and reputation.

Are there special rules for advertising depicting or demonstrating product performance?

There is no specific provision in the applicable regulations to demonstrate a product’s performance. However, it is necessary to observe other obligations applicable to advertisers. For example, when demonstrating a product’s performance, the advertiser should properly demonstrate results that are achievable by the product. Also, because this kind of advertising is often an indirect form of comparative advertising, the advertiser must also have tests that prove the viability of performance announced, in order to be able to defend the advertising in the event of the authorities, competitors or consumers challenging the result announced.

Are there special rules for endorsements or testimonials by third parties, including statements of opinions, belief or experience?

CONAR’s code specifies special rules for endorsements or testimonial by third parties. According to such regulation, there are different categories of testimonials: specialist, famous person and common person. For each category, there are specific rules and conditions to comply with.

In all cases, if the third party is contracted or in any way motivated by the advertiser to carry out an endorsement or statement, the third party should inform the consumers that the endorsement or the statement is publicity, sponsored by the advertiser.

Are there special rules for advertising guarantees?

Brazilian law establishes a mandatory guarantee to protect consumers’ rights. Consequently, if an advertiser is offering a complementary guarantee and decides to detail such benefit in its advertising, the advertiser must include the terms and conditions of the complementary guarantee in its advertisement, in order to avoid any complaints related to misleading advertising.

This information may be briefly included in the legal notice, provided that it is made available to the consumer in the owner’s manual, contract or on the advertiser’s website, depending on the case.

Are there special rules for claims about a product’s impact on the environment?

The claim should always respect all the requirements and obligations provided by the law and regulations so as not to constitute a misleading or abusive advertisement.

On the other hand, according to the applicable regulation, claims regarding sustainability must respect some especial rules, such as, among others:

• they must correspond to actual practices adopted by the advertiser;
• the broadcast information must be true, verifiable and possible of being corroborated;
• the claim must be accurate and precise; and
• the claim shall be provided with supporting data and an external source endorsement.

Are there special rules for describing something as free or a free trial or for special price or savings claims?

The use of the words such as ‘free’ and ‘free trial’ or other expressions with the same meaning on marketing campaigns shall be permitted only when there is no actual cost to the consumer concerning the promised free item.

In campaigns involving the payment of expenses to be paid by the consumer, such as postal charges, freight, delivery charges, database consumption, or taxes, it is necessary to specify to the consumer, in a prominent way, all the expenses involved, so that the consumer easily understands the scope and limitations of the announced benefit.

In addition, regarding special price or saving claims, is important to highlight that is very common in Brazil to sale products in installments with or without interest. In these sort of transactions, the advertiser must inform the consumers of the original price, the quantity of installments and the final price. If applicable, it is also necessary to inform the interest, bank fees, expenses (total effective cost), as well as the original price and the final price to be paid by the consumer on the transaction.

Are there special rules for claiming a product is new or improved?

There is no specific rule for claiming a product is new or improved. Notwithstanding this, the claim should always respect all the requirements and obligations provided by the law and regulations so as not to constitute a misleading or abusive advertisement, especially if there is any relevant difference between the old and the new product that the consumer must be informed of.

Are there special rules for claiming where a product is made (such as country of origin)?

There are no special rules to inform in the advertising material the country of origin or where a product is made. The country of origin must be informed on the owner manual and in the labels applied on the product, as established by specific law and regulation.