The main law that governs advertising practices in Brazil is the Consumer Defence Code (CDC) (Law 8078/90), in particular, its Sections 36 to 38. This is the general rule applicable to all sectors and products. Broadly speaking, the CDC prohibits deceptive advertising (ie, advertising of any type that misleads the consumer regarding the nature, characteristics, quality, quantity, properties, origin, price or any other aspect of a product or service (Section 37 (1) and (3)).
It also prohibits abusive advertising, understood, among other things, as discriminatory messages that exploit fear or superstition, violate environmental rules or abuse children’s less developed judgement and naivety (Section 37 (2), CDC).
The CDC also requires that all advertising be immediately and easily identified as such (principle of identification), hidden advertising is forbidden (head provision of Section 36). Furthermore, it establishes that the supplier must keep any factual, technical and scientific data that supports its messages (Section 36, sole paragraph) and that the burden of proof is always on the advertiser. The supplier is always liable for proving the veracity and accuracy of its advertising message
#1 Advertising Claims
The scope of what is considered advertising in Brazil is extremely broad. The deceitfulness control falls not only on so-called traditional advertising, but also on any type “advertising information” which includes, among others, sales promotions, point-of-sale materials, tasting and sampling in retail, labelling and slogans, “sponsored” messages on blogs, product placement, etc.
Misleading advertising is defined in Section 37 (1) and (3) of the CDC. It may be summarised as a message able to deceive consumers as to the features of the advertised product or service, either by deceit, omission or any other means (eg, ambiguity and/or inaccuracy).
The CDC defines advertising deceitfulness by omission as when the advert fails to inform consumers of “essential data” related to the advertised product or service. Considering the open concept of the rule, essential information is that which may alter the terms of the offer, or the conditions or constraints of enjoyment of the good or service, or else, may burden the consumer.
Misleading Advertising Assessment Criteria
Upon examining the deceptive potential of the message, the lawfulness of the advertising must be analysed based on the consumer as the construction criterion. The deceptive potential of an advertising message must be accurately examined and measured with a view to the impression such advertising actually causes (or may cause) in its target consumers. Besides the target audience, the communication vehicles that are used and the time and space constraints must be always taken into account, as well as the nature and features of the advertised products or services.
In Brazil, the research and investigation of the target market was not taken into account for decades, and the tendency was to regard the deceit as affecting consumer in general under the principle of consumer vulnerability. Gradually, the courts have accepted the investigation of the target audience criterion, including analysing different media features that were used and sectors that were involved.
Regulation of deceptive advertising is not restricted to the content, and may fall on its form of presentation. Advertisements that mask or conceal their commercial nature, suggesting they are spontaneous manifestations, may be declared misleading due to breach of the principle of identification of the advertising message (Section 36, CDC).
Actionable Advertising Claims
The Brazilian Consumer Defence Code does not regulate specific claims, whether express or implicit. There are certain sectors subject to specific regulations (see 1.6 Regulated Industries) and, therefore, certain attributes must follow specific regulations to be claimed. What is not prohibited or regulated (and is not deceitful) is allowed under the principles of free initiative and free competition.
Puffery Versus a Message of Exclusion
The use of the advertising technique of exaggerated praise (puffery), or the resort to fantasy or emotional appeals, are common advertising techniques to draw the attention of the target audience. Such messages cannot be considered deceitful simply because they convey unreal or clearly exaggerated situations, which are recognised as such by consumers.
These advertising techniques are accepted in Brazil and widely analysed by CONAR and the case law of Brazilian courts.
The puffery must be assessed by examining the concrete case, checking whether the advertising exaggeration actually consists of an exaggerated manifestation of the quality of the product, without requiring factual or scientific proof, one not taken seriously by consumers, or, otherwise, whether the expression is likely to be misleading.
Furthermore, it must be ascertained if the message is just an exaggeration, not measurable, or whether its content is exclusionary. For example, the use of words such as “only”, “exclusive”, “unique” or “the most” in advertising, whenever related to the exclusivity or the superiority of the advertised product or service, might configure a message of exclusion subject to substantiation, on penalty of being found misleading.
When an advertisement claims that a certain product or service features, among other things, a specific attribute, a quality differentiating it from its competitors, special functionality, the best price on the market, or special performance, these (functional) claims must be preceded by technical support.
This same rule is provided in Section 27 (1) of the CBARP, and compels advertisers and agencies to provide factual, technical or scientific evidence regarding any comparisons or descriptions, whenever requested.
This is provided in Section 36, sole paragraph, of the CDC, which establishes the principle of transparency of the substantiation, and requires suppliers, upon the advertising their products or services, to keep supporting factual, technical and scientific data. The scope of the legal requirement imposes, on suppliers, the burden of proof regarding the veracity of their claims, if they are questioned by lawful interested parties, among which would be a consumer unable to collect product data or run tests.
Neither Brazilian law nor the self-regulatory rules establish specific standards for testing to support advertising claims. This analysis is done on a case-by-case basis. What the law requires is that any advertisement that claims a specific form of effectiveness or a difference from other market competitors, must be supported by testing (prior to the campaign), and the source (survey) that supports the claim must be referenced in the advertisement, even as a footnote.
However, the more independent the research, the better the chances of success and acceptance of the veracity of the advertisement. Specifically, a survey conducted by an independent institute, using a proper methodology and representative sampling, is the right way to support the validity of advertising claims.
Furthermore, advertisers regularly use sources and research released by third parties or government agencies to support their campaigns. However, they must be grounded on objective data analysis.
Brazilian laws do not require the advertising claim to be supported by clinical human research. Frequently, a certain sector is forbidden from making specific claims by the regulatory agency because it understands that prior clinical and scientific proof is required, which, however, would only be possible by means of human research, a situation that demands a long and bureaucratic procedure in Brazil.
Despite Brazil not having specific regulations for generic claims (eg, natural, healthy, environmental, recyclable, etc), there are several restrictions on the use of such expressions, as the regulatory and consumer defence authorities understand that these are generic claims that, without support, are liable to mislead consumers.
With regard to sustainability claims, CONAR has a specific Annex that outlines criteria to avoid misleading or abusive messages. It is Annex U of the CBARP, under which advertising must reflect the advertiser’s liability towards the environment and sustainability, and must be guided, among other things, by the principles of concreteness, veracity, accuracy and clarity, proof and sources, pertinence, relevance and absence of absolute claims.
Companies should advertise only pertinent and relevant benefits vis-à-vis the global impact of their activities, and avoid conveying absolute advantages, since it is impossible to fully annul environmental impacts.
#2 Comparative Advertising
General Requirements of Comparative Advertising
The CDC does not expressly mention comparative advertising and this advertising technique is not prohibited. CONAR, however, has opted to expressly regulate comparative advertising, recognising it as customary market practice (Section 32, CBARP).
Comparative advertising should be applied to goods and services that belong to same type or nature. CONAR further reinforces that the main purpose of comparative advertising should be consumer information. Therefore, with regard to comparison parameters, it requires:
- Objectivity – the comparison should be based only on objective and provable data; the advertiser’s mere personal opinions or value judgements are subjective and groundless guidelines.
- Certain essential elements – the comparison must fall on one or more essential elements of the comparative product or service, thus contributing to consumer’s increased information.
Identifying Competitors by Name
Therefore, insofar as the comparison is true, objective and verifiable regarding one or more essential elements of the products or services, it is authorised to expressly identify the competing brand in the advertisement. We highlight the direct comparative campaign between Rayovac and Duracell batteries. The advertisement stressing Rayovac batteries’ durability and lower price was judged to be in the consumer’s interest by the Superior Court of Justice – STJ (Special Appeal-REsp No 1.668.550).
Comparative advertising, however, cannot denigrate the competitor’s brand or image – which happens, for example, when the advertiser alludes to a competitor’s personal circumstances, unrelated to the compared products or services, or uses offensive expressions or images.
Finally, it is worth noting that this applies even to comic situations, when used to refer to the competitor’s brand without making any objective comparison to an element of its product or service. In these cases, the trend in Brazil is to prohibit such advertising on the grounds that it involves the improper use of someone else’s brand or, otherwise, an attack on the brand. Classic (and more recent) cases in Brazil were those involving Burger King and McDonald’s chains.
Comparative Advertising Standards
Comparative advertising is not subject to additional standards regarding the minimum requirements for standard advertising to be valid, which are that advertising must be truthful (not deceitful) and grounded on reports or market research (claim substantiation).
Consequently, advertising campaigns that praise special product features and qualities must be supported by prior technical data, this same requirement is applicable to comparative advertising, perhaps even more strictly, because it is subject to immediate challenge by the competitor.
Specific and differentiated requirements of this practice require the comparison to be:
- always objective and verifiable;
- not aimed at causing confusion between brands;
- not denigrating the competing product or brand; and
- not taking undue advantage of another company’s brand (parasitism).
Challenging Advertising Claims
The standards used to determine whether comparative advertising is truthful are:
- whether the comparison falls on goods and services of same category (a criterion that is highly required in, for example, automobile comparisons);
- whether the market research made by an independent institute properly compared competing products, with the necessary exemptions, proper methodology and representative sampling;
- whether the element being compared admits of objective analysis (eg, price or composition); and
- whether the comparisons were subjective (eg, better tasting) and, thus, not capable of substantiation.
Challenging Comparative Claims
Competitors may challenge the content of comparative advertising both in CONAR and before the courts; in the latter case by filing unfair competition lawsuits (Law 9279/96). The remedies regularly claimed are the cessation of the advertising and a claim for damages for trademark infringement, both moral and material damages. More rare and controversial would be the filing of a counter-advertising claim.
One of the most recent leading cases in the Brazilian food industry is about misleading and comparative advertising displayed at one of the world’s largest processed food fairs, and the discussion has expanded to digital media. The advertisement in question compared the new Heinz mayonnaise to the market leader (Hellmann’s, owned by Unilever), alleging a superior production process (“100% cold process”) that would grant a fresher and creamier product (compared to other processed mayonnaises). The lawsuit is based on Heinz’s failure to substantiate its claims of a 100% cold process and that this process delivers a fresher and creamier mayonnaise. This is a leading case that will establish important precedents with regard to directly and indirectly comparative and misleading advertising.
#3 Social/Digital Media
Brazil has not yet detailed any special rules for advertising on social networks. The same principles are applicable to both traditional media and digital advertising, namely:
- the principle of identification of the advertising message – requires the advertisement to be immediately and easily identified as such by consumers;
- the principle of veracity – that messages are truthful and verifiable, whenever such proof is required (ie, that offers are accurate and met as advertised); and
- the principle of non-abuse – that messages respect the constitutional social values and their target audience, especially with regard to children, where the rules are more restrictive and merchandising is prohibited.
Key Legal Issues
Considering that Brazil does not have specific regulation for social media advertising, the major legal challenges for advertising professionals regard creating advertising that is interesting without violating the general rules and avoiding hidden advertising, which might result in potential loss of consumer confidence and credibility.
The correct choice of influencers is another important topic, because the wrong post may create unwanted trouble. This situation is exacerbated by the fact that social media platforms do not have strict editorial control.
CONAR has been working on a specific guide regarding influencers but it has not been published yet.
The advertiser’s liability for content posted by third parties on the brand website or social network depends on the relationship established between them. There is a somewhat settled understanding, at least within CONAR, that not only the payment, but also the delivery of gifts, products, trips, concert tickets, or any other benefit, even if indirect, characterises paid advertising.
And if there is paid advertising, the advertiser is, directly or indirectly, liable for the posted content.
The major problem from a legal standpoint is when there is no such relationship (ie, when the influencer or the consumer does not have any direct or indirect relationship with the brand) and, sometimes, the company is erroneously held liable for exclusive third-party content.
In principle, the same disclosure requirements that apply to traditional media apply to social media as well, according to the specificities of each medium. On television, except for restrictions on advertising to children, advertisements are easily identified as such, due to the time bands (breaks) in which they are shown. In radio, newspapers and magazines, advertising spaces are also easily visible and delimited, and if advertising is posted in a journalistic format, there should be by an “advertorial” indicator.
On social media, the same rules are applicable but, considering that it is a fluid space, without breaks, making it difficult to distinguish the advertisement from the rest of the editorial content, these rules apply even more strictly. Written disclosure is recommended using the proper indicators provided by the platforms, and also by the user, by using hashtags. When the advert is placed in media for children, this should be also done orally.
Law 12965/2014, also known as the Civil Rights Framework for the Internet, has provided general rules for the platforms, concerning keeping connection records and removing third parties’ improperly stated content. Accordingly, the internet application provider should:
- keep confidential connection records to internet applications in a controlled environment for a period of six months; and
- be held civilly liable for third-party content only in cases of non-compliance with a court order to remove content identified as an infringement of rights.
Besides this regulation, the General Data Protection Law (LGPD), which has been in force since 17 September 2020, will be applicable to social media platforms, without prejudice to the applicability of the CDC, and of the criminal law against libel and torts in connection with defamatory or slanderous messages and fake news.
Native advertising (ie, advertising that resemble editorial content) must follow overall CDC and CONAR rules and principles, and cannot hide its advertising or paid nature.
It must disclose this nature through its own indicators, on penalty of being declared deceitful under their presentation format (hidden advertising).
#4 Influencer Campaigns
The use of marketing by hiring influencers is increasingly bound up with the spontaneity that this form of advertising must assume, likewise the risks inherent to legal discussions regarding the clarity of the advertising information. The marketing takes the form of publiposts, unboxing videos, tutorials, sponsored videos, marked photos, etc.
During the COVID-19 pandemic, Brazil introduced live broadcasts of singers and artists, as a way to keep people indoors and provide them free and “interactive” entertainment.
This innovative format, which featured several advertising actions, generated significant self-regulatory discussion, since the live broadcasts consisted of live shows, which clearly granted the performers involved considerable freedom of expression, and prevented editorial control or company direction regarding their behaviour.
Special Rules/Regulations on Influencer Marketing Campaigns
Brazil has not yet detailed any special rules for influencers. The same principles are applicable both to traditional media and advertisements, with the guidelines provided by CONAR in its decisions involving marketing actions by influencers.
The principle of identification of the advertising message must be stressed, which requires that any action pursued by a hired influencer must be immediately and easily identified as such by consumers. The use of specific indicators on the various social media platforms and/or the use of hashtags such as #publi, #advertising, #publipost, #sponsored and #paid partnership is recommended.
CONAR has already indicated that there must be disclosure even in actions involving indirect benefits, such as product delivery.
Furthermore, the messages must be appropriate for the target audience, especially regarding children, whose critical capacity is lower.
Besides, where posts advertising products subject to stricter regulation (eg, spirits) are made, the influencer must also post the warning clause on their page and, depending on the situation, include an age gate to access the page. The advertiser is liable for guiding and supervising compliance with these rules.
The advertiser may always be held liable for the content posted by the influencer. If a specific agreement was made for the posted content, the liability is unequivocal. If an influencer is strongly connected with a brand (its “poster boy/girl” or “brand ambassador”), then even if the content was not specifically paid for or hired, the advertiser is answerable for that content, given the connection of the influencer to the brand.
The main legal problem is when such a relationship does not exist (ie, when the influencer does not have any direct or indirect relationship with the brand) and, sometimes, the company ends up being liable for the third-party’s exclusive content. This is often the case where YouTubers are involved, because they use brands or products to make their videos, including unboxings.
Recent cases in Brazil have led to discussion of this topic, and CONAR’s case law has swayed, sometimes holding the brand liable for improper third-party content, and sometimes exempting it. Therefore, despite there being no legal duty to “monitor the network”, there are situations where CONAR has ruled that a supplier should act to protect its good name, even though the content in question was produced by third parties with no direct or indirect relationship with the brand.
#5 Privacy and Advertising
No specific rule is applicable to email marketing. However, general consumer protection rules that prohibit abusive marketing are applicable (Section 6(IV) and Section 39(IV), CDC).
Thus, email addresses may only be collected for marketing purposes with the consumer’s explicit consent, and upon providing them with an opt-out option. Besides, their addresses cannot be shared with third parties without prior consent. The liability for any violations under the current rules follows the overall civil and consumer liability regime. The criteria for personal data use and processing, as well as the liability regime for unlawful acts, will be increased by the General Data Protection Law, which recently came into force.
In light of the constant abuses verified in Brazil regarding the indiscriminate use of this practice, which has been adopted by companies without the consumer’s prior consent, in 2019, the telephone sector committed to implementing measures to mitigate the practice and provide opt-out options.
Under the self-regulation scope, telecommunications companies, jointly with ANATEL (the regulatory agency), launched the Não Me Perturbe (Don’t Disturb Me) programme; an initiative that allows consumers (via a website) to exclude their number from land and mobile telephony, TV and internet service providers’ databases.
At the federal level, ANATEL Resolution No 632, of 7 March 2014, establishes that consumers of telephone, pay TV and internet services are entitled not to receive advertising messages on their mobile stations, except upon prior, free and express consent. However, there is no legal ban of other categories of services or products.
At state level, several laws provide for telephone number registration to block product or service telemarketing calls. As a rule, such registration is managed by state PROCONs.
Finally, with the LGPD coming into force, the obligations regarding consent, conditions for data processing and liability resulting from data processing failures will significantly increase.
Text messages sent to consumers are governed by the CDC principle that prohibits abusive marketing to consumers (Section 6(IV) and Section 39(IV), CDC).
So, the collection of consumer telephone numbers for the purpose of sending text messages with advertising content may only be done with explicit consent, and upon providing explicit opt-out options. The liability for any violations under the current conditions follows the overall civil and consumer liability regime.
Furthermore, ANATEL Resolution No 632, of 7 March 2014, establishes that consumers of telephone, pay TV and internet services are entitled to not receive advertising messages on their mobile stations, except upon prior, free and express consent. However, there is no legal ban of other categories of services or products.
Finally, upon the LGPD coming into force, further discussions will arise about consent and the supplier’s lawful interest in data collection and processing.
In Brazil, no specific rule (legal or self-regulatory) has yet been enacted to specifically regulate targeted advertising.
General rules, both in the CDC and in the Civil Rights Framework for the internet, are applicable to the consent needed for personal data collection, storage and transfer (Section 7(IX), Law 12968/2014).
In practice, considering overall consumer protection duties against abusive practices and the obligation to procure consent for personal data collection, storage and transfer (Section 7(IX), Law 12968/2014), it is advisable to:
- include express and visible opt-out mechanisms in advertisements directed to consumers, or even regarding data collection mechanisms for targeted advertising; and
- avoid excessive data collection.
Upon the LGPD coming into force, further discussions will arise about consent and the supplier’s lawful interest in data collection and processing.
Marketing to Children
Marketing to children is regulated in Brazil by Section 37 (2) of the CDC, which establishes that advertising that takes advantage of children’s less developed judgment and experience is abusive. Despite the CDC prohibiting only abusive advertising, there are decisions rendered by the Superior Court of Justice against “gift with purchase” promotions that grant collectible gifts (eg, plush toys) in the food sector, as these are considered to be an abuse in themselves. Therefore, in Brazil, the advertising parameters targeting children, defined by the Child and Adolescent Rights Act (ECA) as a person up to 12 years old, have significantly increased.
With regard to self-regulation, CONAR provides a very detailed list of rules and parameters so that messages aimed at children are appropriate and respect their special condition as developing persons. Besides dedicating a specific section in its Code (Articles 37 et seq of CBARP) to children and teenagers, its Annex H also provides several rules and bans concerning the marketing of food to children, which requires increased care.
Finally, regarding the collection and use of children’s personal information, the LGPD (Law No 13,709/2018) provides a specific section (Section 14) under which children’s personal data should be treated considering their best interests and with the specific and highlighted consent of at least one parent or legal guardian (paragraph 1). For the purposes of this law, information concerning an identified or identifiable natural person is considered personal data (Section 5(I)).
Under the principles of child protection, children’s data should not be collected without parental consent, let alone to target media “that interests them” or is based on their “browsing habits”.
Violation of these rules results in the penalties of Section 56 of the CDC being applied, especially a fine that may amount to BRL10 million. When the LGPD comes into force, the penalties will increase substantially, and a fine amounting to 2% of the relevant company’s turnover (limited to BRL50 million) may be imposed, besides the infringement being subject to publication after its assessment and verification, among other sanctions. The applicable sanctions provided in the LGPD (Sections 52 to 54) should be enforced as of 1 August 2021 (according to Law No 14.010/2020, enacted because of the COVID-19 pandemic).
#6 Sweepstakes and Other Consumer Promotions
Under Law 5768/71 and Decree No 70951/72, any free distribution of prizes as a form of advertising that involves luck must be previously submitted to the approval of the competent government agency. Currently, this approval is centralised in the Secretariat of Public Policies Assessment, Planning, Energy and Lottery (SECAP/ME), subordinated to the Ministry of Economy.
The laws provide for the following types of commercial promotion subject to registration:
- Raffle or raffle-like – whereby the consumer meets a certain requirement (eg, purchase of products) and receives a lucky number, which is randomly, equitably and concurrently assigned, and wins as per the results of the Federal Lottery.
- Contest – widely used, especially in social networks, it is the form whereby the winner is defined based on their performance (eg, best photo/video) or by a competition of any nature (eg, the first ones to buy the product).
- Contest-like – used predominantly by shopping malls, this form involves multiple participants who have correctly answered a certain question and, as a tiebreaker, the coupons printed with these answers are thrown into the air and one (or more) is caught.
- Gift certificate – whereby the reward is instantaneous (ie, the consumer knows if they have won immediately) either because the gift is found inside the purchased product, or because it is given on presentation of the sales slip for the product.
In all of the above forms of commercial promotion the requirement of making a purchase to participate is not prohibited.
Recently, Informative Note No 11/2018 issued by SEFEL (the precursor to SECAP), introduced new criteria to promotions, such as the imposition of prior registration of “buy one, get one free” promotions subject to product availability.
Contests of Skill
Brazilian laws distinguish between contests of skill and games of chance. Whenever luck is involved, the company must procure prior authorisation.
An exception to this rule is the exclusively cultural, artistic, sporting or recreational contest; insofar as it is not subject to any type of risk or payment for competitors/participants, nor binds such competitors/participants (or the winners) to the acquisition or use of any good, right or service. Such contests, therefore, are intended to reward artistic or sporting talent, or, simply, to offer leisure, without market connotations.
Promotions that involve luck: raffles, gift certificates, contests, or similar operations must be previously authorised by SECAP.
The law includes extensive mandatory documentation and accountability procedures. In brief:
- Authorisation must be procured online at https://scpc.sefel.fazenda.gov.br/, at least 120 days before the promotion starts.
- An inspection fee must be collected, whose amount varies according to the value of the promotion prizes.
- After the commercial promotion ends, the company must report to SECAP within 30 days after delivering all the prizes or collecting the amount corresponding to the prizes that were not delivered, if applicable.
- Once the accountability report is approved, the procedure is shelved.
There is no specific law or regulation applicable to loyalty programmes. However, SECAP Informative Note 11/2018 expressly states that prior authorisation is not required for loyalty programmes and incentive campaigns, as they do not correspond to commercial promotions.
Free and Reduced-Price Offers
Free offers like “buy one, get one free” are detailed in the Informative Note 11/2018, which establishes that prior registration is mandatory when the promotion:
- provides for the distribution of prizes subject to stock limit;
- provides for prizes to the first contestant to meet the participation criteria;
- establishes a fixed number of prizes; or,
- establishes any other criteria for the participation, besides purchasing the promoter’s products or services.
However, the prior registration rules do not apply to offers made on product packaging (eg, promotional packs with free gifts or promotions like buy two, get three).
Automatic Renewal/Continuous Service Offers
The CDC (Section 39(III)) establishes that sending or delivering products or providing services to consumers, without prior request is an abusive practice. Consequently, even if a prior contractual relationship has been established to send products or provide services continuously (for a charge), to avoid allegations of abusive practice and related penalties, the prior and express consent of the consumer should be procured for the renewal.
Nothing in this document should be treated as an authoritative statement of the law. Action should not be taken as a result of this document alone. We make no warranty and accept no responsibility for consequences arising from relying on this document.
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