In brief
On 3 June 2021, the Law for Improper Advertising Practices was published in the official journal of the federation (DOF). This law aims to promote transparency in the advertising market, to prevent and combat commercial practices that constitute an undue advantage in favor of specific individuals to the detriment of advertisers and consumers.
Thousands of Companies submitted an “amparo” action alleging that the LIAP transgressed several human rights. Also, the Federal Institute of Telecommunications (IFT) filed a constitutional action seeking a general declaration of unconstitutionality.
This January 2023, the LIAP was declared unconstitutional by the SCJN, considering that it violates the human rights of freedom to work, free contracting, freedom to trade and autonomy of will. However, this ruling is one isolated criterion which is not binding and has no general application yet, as it will only protect those who are parties in the “amparo” action that gave origin to the court ruling (since it is not a general declaration of unconstitutionality). Nonetheless, this is an important precedent that should be used by all the Courts to grant the “amparos”, and also will help to pursue in the future a general declaration of unconstitutionality of the LIAP.
Key takeaways
- According to the SCJN, “The law contravenes the constitutional regime in force, since commercial relations must be free transactions in which the contracting parties exercise their will with authenticity, without any conduct of any nature being imposed on such free agreements, without being intervened by third parties, including the State”.
- The law prohibits advertising agencies from contracting spaces in the media to later resell them to advertisers, a common practice in the sector, and orders the Federal Economic Competition Commission (COFECE) to impose fines of up to 4% of the annual income of violators.
- The SCJN rejected that the resale of advertising can be classified as an illegal activity since it violates the human right of freedom to trade.
- This resolution is only bound for the plaintiff and defendant in the particular case but not for every person or company.
- This resolution is an important precedent that should be used by all the Courts to grant the “amparos” submitted by the Companies, and also will help to pursue in the future a general declaration of unconstitutionality of the LIAP, when the constitutional action filed by the IFT is resolved by the SCJN.
