COFECE publishes provisions for complaints under the new Law on Advertising Contracts

The purpose of the Advertising Law, in general terms, is: (a) to promote transparency in the advertising market, specifically, in the processes of contracting advertising space; and (b) to prevent and combat commercial practices that constitute an undue advantage to the detriment of advertisers and, ultimately, of consumers, mainly by avoiding conflicts of interest on the part of agencies, since one of their principal roles in the advertising market is intermediation between advertisers and media. The Advertising Law establishes that the Federal Economic Competition Commission (“COFECE”) shall substantiate and process complaints arising from violations thereof. It is important to note that COFECE itself filed before the Supreme Court of Justice of the Nation (the “SCJN”) a constitutional controversy against the decree enacting the Advertising Law, considering that it contains mandates that affect its autonomy by obligating it to perform functions that are not necessarily compatible with its regulatory framework. The foregoing, given that the Advertising Law designates it as the authority competent to investigate and sanction certain conducts without these necessarily being matters that affect competition, which could bring about counterproductive results for the efficient functioning of the advertising market. Nevertheless, the SCJN resolved not to grant the suspension of the Decree by which the Advertising Law was enacted, so that the processing of the constitutional controversy continues its course and, in the meantime, said law must be observed. In that regard, and in view of the imminent entry into force of the Advertising Law, this past August 31, 2021, COFECE published the emergency provisions for the processing and resolution of complaints regarding possible infringements of said law (the “Emergency Provisions”). By way of summary, the Emergency Provisions establish the following: 1. Investigations for infringements of the Advertising Law shall commence by complaint and shall be conducted by the Investigative Authority. 2. Complaints filed by persons who have a legal interest in the matter, in terms of Article 2 of the Advertising Law, shall be admissible. 3. In terms of the Federal Economic Competition Law (the “LFCE”), these investigations may be carried out over up to 5 periods of 120 business days each. 4. Once the investigation is concluded, and if there are elements of probable liability, the defense stage granted by the LFCE shall proceed, by means of a procedure conducted in the form of a trial, in which the evidence and arguments of the economic agents involved shall be heard and analyzed. 5. Finally, the Plenary of COFECE shall resolve whether or not the complained-of conduct constitutes a violation of the Advertising Law, and, if applicable, shall impose the sanctions provided for in Article 10 of the Advertising Law, which consist of fines equivalent to between 2% and up to 4% of the income of the economic agents involved in said violations. We place at your disposal the knowledge and experience of our team to advise you on matters related to the Advertising Law, including measures to ensure compliance therewith, its challenge before the courts, as well as to attend to investigations by the competent authorities. For additional information on the subject of this note, please contact our experts: Luis Burgueño, Partner: +52 (55) 5258-1003 | lburgueno@vwys.com.mx Fernando Carreño, Partner: +52 (55) 5258-1042 | fcarreno@vwys.com.mx Pablo Jiménez, Partner: +52 (55) 5258-1016 | pjimenez@vwys.com.mx Regina Godínez, Associate: +52 (55) 5258-1003 | rgodinez@vwys.com.mx Rubén Villegas, Associate: +52 (55) 5258-1003 | rvillegas@vwys.com.mx

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