in a nutshell
On June 3, 2021, the Inappropriate Advertising Practices Act was published in the Federation’s Official Journal (DOF). This law aims to promote transparency in the advertising market, prevent and combat business practices that create unfair advantage in favor of certain individuals and harm advertisers and consumers. .
Thousands of companies have filed “amparo” lawsuits alleging that LIAP violates several human rights. Also, the Federal Telecommunications Institute (IFT) has filed a constitutional action seeking a general declaration of unconstitutionality.
This January 2023, the LIAP was declared unconstitutional by the SCJN as it violates the human rights of freedom of labor, freedom of contract, freedom of trade and autonomy of will. However, the ruling protects only the parties to the “Amparo” litigation from which the court’s ruling was based, and is therefore one of the lone standards that is non-binding and not yet generally applicable (this is not a general declaration of court decisions). unconstitutional). Nonetheless, this is an important precedent that should be used by all courts to recognize ‘amparos’, and will also help pursue a general declaration of LIAP’s unconstitutionality in the future.
- According to the SCJN, “the law violates the constitutional system in force because commercial relations must be free transactions in which the contracting parties exercise their will with authenticity. Third parties, including the state.”
- The law prohibits advertising agencies from contracting media space and later reselling it to advertisers, a common practice in the industry, and has brought the Federal Commission on Economic Competition (COFECE) to court for violators. It mandates fines of up to 4% of annual income.
- SCJN denied that reselling advertisements violates the human right of freedom of trade and could be classified as an illegal activity.
- This resolution is binding only on plaintiffs and defendants in specific cases and not on all individuals or corporations.
- This resolution is an important precedent to be used by all courts to recognize “amparos” filed by companies, and will also be used by LIAP in the future when constitutional lawsuits filed by LIAP are filed. It is also useful in pursuing general declarations of unconstitutionality. IFT is resolved by SCJN.
