Introduction

Law 26,994, which approved the new Civil and Commercial Code, regulates both civil and commercial agreements.

The agreements provided for in the new code can be classified as:

  • 'discretionary' or 'parity' agreements, where the parties are understood to be equal regarding the terms and conditions for negotiating contractual clauses; and
  • 'non-discretionary' or 'non-parity' agreements, in which the contracting parties are not equal.

Included in this second category are so-called 'consumption agreements', in which, based on the Constitution, special protection is granted to consumers with respect to the suppliers of goods and services, the latter being obliged to follow certain guidelines regarding decent, fair and non-discriminatory behaviour and the duty to inform, which includes the issue of advertising.

Comparative advertising and consumption agreements

The Civil and Commercial Code refers to advertising – including comparative advertising – in the context of the rules concerning consent in consumption agreements. From a legislative viewpoint, this does not appear to be the most advisable perspective, as comparative advertising – the most important effects of which concern competitor companies, rather than consumers – is central to the regulation of advertising.

Under Section 1101 of the code, advertising will be banned if it:

  • contains false indications or indications that deceive or might deceive consumers where they refer to essential elements of a product or service;
  • makes comparisons between goods or services that might deceive consumers; or
  • is abusive, discriminatory or promotes harmful or dangerous behaviour which presents a threat to consumer health or safety.

Section 1101(b) refers to comparative advertising, which is prohibited from a consumer law perspective if it is false and deceives consumers as a result.

Although it is found in the Civil and Commercial Code where, for the first time, a body of rules refers expressly to comparative advertising, notably the code refers to comparative advertising as part of the regulation of consumption agreements and not within the field of competition law.

In previous court rulings relating to the subject of comparative advertising, the analysis had referred mainly to the field of competition among corporations, an approach which, consequently, differs from that of the new code.

As a consequence of this approach, Section 1101(b) fails to foresee other situations in which comparative advertising may not be legally admissible.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.

For further information on this topic please contact Daniel R Zuccherino at Obligado & Cia by telephone (+54 11 4114 1100) or email (dzuccherino@obligado.com.ar). The Obligado & Cia website can be accessed at www.obligado.com.