There are many obstacles to enforcement of the comparative advertisement regulations, but the government has made efforts to prevent consumers from being misled
Are consumers tired of being bombarded with advertisements that are intended only to discredit the quality of competitors’ products or of products which are less impressive than the advertising suggests? A key commercial aspect in today’s market is the exponential growth of consumer offers; every day, new and varied products and services emerge. The increase in supply means that companies try to target their goods, products and services towards consumers’ preferences, aggressively competing for the same consumers and using marketing strategies that mention competitors directly and indicate qualities that enhance their products or services compared to those in the same category. However, partly due to increased competition, companies are starting to use misleading advertising campaigns that exaggerate the qualities of their products or services by highlighting features that do not exist, or comparing them to those of competitors in order to persuade consumers to purchase them. Therefore, it has been necessary to regulate advertising in order to ensure that consumers receive more accurate information about the offered products or services. This article briefly explains the structure of the Mexican laws that regulate unfair and comparative advertising, the consequences of non-compliance with the legislation and the bodies in charge of overseeing such laws and their capabilities. Are there any strong institutions that enforce fair advertising in Mexico? Various statutes regulate advertising in Mexico, but one of the most important is the Federal Consumer Protection Law. Compliance with this law is overseen and enforced by the Federal Protection Consumer Agency (PROFECO). Other bodies also monitor unfair advertising, such as the Mexican Institute of Industrial Property (IMPI) and the Federal Commission of Protection Against Sanitary Risks (COFEPRIS). PROFECO, a public institution which analyses the content of all advertising carried in the Mexican media, is the organisation in charge of defending consumer rights and preventing abuse. Among its other powers, it ensures that the information contained in advertisements is reliable and accurate according to the guidelines set out by the Federal Consumer Protection Law. The Federal Consumer Protection Law regulates unfair and comparative advertising and establishes the basic principles of the obligations and prohibitions in consumer relations, such as: • accurate product information; • correct specifications; • characteristics; • composition; • quality; • price; • inherent risks of consumption; and • abusive and dishonest advertising. Unfair advertising is regulated in Article 32 of the law, which states that all advertisements should contain accurate and provable information about the advertised product or service, and should in no way lead to error or confusion, as in such case they can be considered to be abusive or misleading. This also applies to comparative advertising. Furthermore, Article 32 states that misleading or abusive information or advertising should be understood as “any advertising which discloses characteristics or information related to a good, product or service, whether true or not, that due to its inaccurate, false, exaggerated, partial, or tendentious presentation induces error or confusion”. Article 23 of the PROFECO Regulation states that comparative advertising is advertising that compares or contrasts two or more products or services of the same nature or genre, which are available on the market in the same conditions of maintenance, conservation and preservation. General advertising rules According to the above-mentioned provisions, companies’ comparative advertising should meet the following criteria: • The goods or services being compared must be: of the same nature or genre; available on the market in the same conditions of maintenance, conservation, preservation; and directed to satisfy the same needs. • The information must be accurate and provided in Spanish, and without sounds, text, dialogue or images that may induce consumers to make a mistake due to the exaggeration of qualities or defects when compared to another product. • The information should be verifiable (ie, the provider must be able to prove the results of its research). • The comparative advertising of prices should be carried out in respect of identical goods or services and must include documents that support the price comparison to ensure the accuracy of the compared prices (purchase receipt or public trustee). Misleading advertising In Mexico, common examples of unfair advertising include: • using testimonials from entertainers without scientific knowledge; • using ‘doctors’ who appear to give validity to an advertising message; • Including recommendations from associations with no legal standing; • attributing amazing healing properties to the indicated products or services; • failing to specify restrictions; • strengthening products with unknown vitamins; and • indicating a price below the full amount to pay. PROFECO has the power to prosecute ex officio if it believes that an advertisement does not comply with the law, and consumers can report unfair, dishonest or abusive advertising to PROFECO. If, after investigating an advertisement, PROFECO determines that it does not comply with the Federal Consumer Protection Law, it can order the suspension of the advertisement and, in some cases, the media that distributed it. It can also require correction of the information to make it accurate and to impose fines or impede the commercialisation of the products or services. PROFECO has a high public approval rating and is considered a reliable institution. One of its responsibilities is to prevent companies from issuing unfair advertisements. However, once an advertisement has been released, consumers may complain to PROFECO and it usually deals with such complaints efficiently, as its main objective is consumer protection. Although the law prohibits unfair advertising, many companies nonetheless prefer to continue such practices due to the potential benefits, such as increased market share and higher brand awareness – both of which result in profits that are greater than the fines or penalties imposed by PROFECO. Low use of comparative advertising Although comparative advertising is regulated in Mexico, it is unclear where it is permitted to compare a product without discrediting it. Therefore, companies prefer to use comparative advertising without brand exposure per se, preferring to avoid potential litigation, fines or penalties. Further, in many cases the mass media restricts companies from launching aggressive comparative advertising campaigns in order to prevent conflicts of interest between two companies that advertise their products in such media. Other relevant institutions Certain other institutions also regulate unfair and comparative advertising, such as the IMPI, which protects industrial property rights. Article 213 of the Industrial Property Law prohibits acts against the best practices of industry, commerce and services which imply unfair competition in relation to industrial property rights. It also prohibits the intent to discredit products, services or industrial or commercial activity. On the other hand, it allows comparative advertising if the main purpose is to inform consumers, provided that the advertisement is not false, tendentious or exaggerated in terms of the Federal Consumer Protection Law. This means that comparative advertising is allowed if the information is accurate and provable. The General Healthcare Law regulates the advertising of medical or healthcare products, and the body in charge of supervising healthcare advertising is the Federal Commission of Protection Against Sanitary Risks (COFEPRIS). COFEPRIS was established in light of the sensitivity and complexity of the issue, as well as the possible consequences of having misleading information in advertisements that may affect public health. The General Healthcare Law regulates advertisements that promote the use or sale of health products, alcoholic beverages and tobacco. In particular, Article 306 states that: • information on aspects such as quality, origin, purity, conservation and nutritional value must be verifiable; • the message should have an educational content; • the message should not include habits that are noxious or that imply health risks; and • the message should not contradict advice regarding disease prevention or treatment as established by the healthcare secretary. Regulation has become increasingly relevant as every day there are more ‘miracle’ products on the market, which claim to guarantee things that have not been proven. For example, advertisements for products that promise weight loss, hair growth or rejuvenation include testimonials from people saying that such products have worked for them without any real evidence. This can lead to possible health consequences. Conclusion There are many obstacles to enforcing compliance with the comparative and misleading advertisement regulations – not only for the Mexican authorities, but also around the world, since every day new and more diverse ways of advertising emerge (eg, the Internet, social networks and billboards). However, the government and the legislature have made remarkable efforts to prevent producers from profiting by misleading consumers through unfair advertising by enacting laws and establishing institutions to enforce compliance with the law. Comparative advertising can be beneficial to consumers, since it helps to make them aware of the benefits or advantages of certain products or services over others; however, since advertising is persuasive, it encourages consumers to purchase such products or services. Thus, advertising strategies must be crafted in line with the law and relevant guidelines, and should even make use of legal strategies in order to avoid misleading advertising and unfair competition that may result in penalties, fines and lawsuits. If these are overlooked, consumers could lose faith not only in the advertised brand, but also in the whole company.