On April 17 of 2019, the Decree of Necessity and Urgency Nº274 / 2019 was published in the Official Gazette, through which the National Executive revokes the Law on Fairness in Trade (Nº22,802). This decree sanctions a new law that entered into force on May 1. Such Emergency Decree contemplates the following changes:
It regulates the business practices that may affect a person's competitive position or the functioning of the competitive process. It is especially aimed at the following behaviors:
– Behaviors likely to induce to an error or a scam. It refers to the characteristics, the conditions of commercialization and the origins of the products or services.
– The illegal obtaining of significant advantages.
– The exploitation of a "situation of economic dependence of a company", which is a customer or supplier. That means that it does not have equivalent alternatives to carry out its activity. Exploitation is presumed when a supplier must grant additional advantages that it does not grant to similar suppliers.
– "Improper obtaining of commercial conditions". The "commercial conditions" include benefits in the prices, in the payment conditions, in the modalities of sale, in the payment of additional charges and other conditions not agreed or not based on uses and customs. The term "improper obtaining " refers to the threat of breaking business relationships.
– The sale below cost when it is part of a strategy to eliminate competitors or hinder their entry into the market.
– The improper exploitation of the reputation of others which leads to confusion.
– The imitation of goods and services or business initiatives that are likely to induce confusion, when there is an improper use of the reputation or effort of others.
– The acts of denigration, unless they result from true and accurate assertions.
– The violation of business secrets made with the aim of obtaining profit or harm.
– Induction (to employees, suppliers, customers, etc.) to breach contracts with competitors.
– The discriminatory treatment of buyers without justification when the seller has published a price list.
- Regulate comparative advertising.
- Maintain the Ministry of Commerce as the Application Authority.
- Raise the maximum amount of the fine to 10 million Mobile Units (currently equivalent to 264 million pesos) and keep the rest of the sanctions provided in Law No. 22,802. Also, add the sanction of "rectification of advertising."
- Regulate in detail the procedure to be followed in order to determine an infraction. That embarks on the appeal of that infraction, as well as the steps that the Application Authority must follow to request precautionary measures from a judge.
- Regulate legal actions against acts of unfair competition. That also includes cessation actions, compensation actions for damages and request for precautionary measures.
- Modify prescription periods. It is clarified that the term for the compensation for damages is two years since the infringement ceased or since the victim became aware of the act. If the Application Authority made a sanctioning decision, the term is one year after the decision is made.
- Preserve the regulation included in Law No. 22,802 regarding deceptive advertising, promotions, product identification, energy efficiency standards of certain products and denominations of origin.
The Decree also creates the Electronic Conflict Resolution System within the scope of the Service for Prior Conciliation in Consumer Relations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.