Two companies fined for violating Consumer Protection Law
On September 20, 2021, the Argentine Consumer Protection and Arbitration Agency (in Spanish, Dirección Nacional de Defensa Del Consumidor y Arbitraje en Consumo, “Agency”) issued the provision DI – 2021-683-APN-DNDCYAC#MDP (hereinafter, “the Provision”) against Electrónica Megatone SA and CARSA SA and imposed a fine of ARS $ 2,000,000 (USD 10,526) to each one of the companies.
- The companies violated articles 1 and 2 of the resolution of the Secretariat of Domestic Trade No. 424/2020 for not including on their website the link to the “Withdrawal Button” in a prominent place in terms of visibility and size and with the denomination indicated in the aforementioned resolution.
- The companies violated article 5 of the annex to the resolution of the Secretary of Technical Coordination of Consumer Protection No 104/2005 for not informing on their website the consumer protection legislation together with the e-mail address of the national enforcement agency.
In response to the Provision, the firms filed appeals under the terms of article 45 of Law 24,240 and argued that the sanction was unfounded, arbitrary and disproportionate.
- Resolution No. 424/2020 does not establish a formal obligation concerning that the “Withdrawal Button” must conform to that denomination.
- The resolution does not regulate the specific size and precise typography that the “Withdrawal Button” must have. Likewise, the concept ‘highlighted’ is relative and must be interpreted in relation to its context.
- The “Withdrawal Button” complies with the “easy and direct access” requirement as it is located on the main web page and not hidden in sub-pages that make access difficult for the consumer.
On October 11, 2022, the Federal Court in Contentious Administrative matters No. 2 ruled in favor of the Agency provision.
- On the website “www.Musimundo.com”, the digital tool is referred to as “Withdrawal” when resolution of the Secretariat of Domestic Trade No.424/2020 refers to the presence of a link designated as “Withdrawal Button”.
- The “Withdrawal Button” link does not comply with the characteristics of “easy and direct access” established in resolution of the Secretariat of Domestic Trade No.424/2020.
- The steps for exercising the right to withdrawal are extremely complicated. The firms merely stated how and why these steps are indispensable.
- The companies did not refer to the violation of article 5 of the annex to the resolution of the Secretariat for Technical Coordination of Consumer Protection No. 104/2005 for not informing on their website the consumer protection legislation together with the e-mail address of the national enforcement agency.
In the last few months, the Argentine Consumer Protection and Arbitration Agency has fined different brands for violating the Consumer Protection Law. For example, in November 2022, the Federal Contentious-Administrative Chamber confirmed the fine of $4 million pesos to a well-known supermarket brand for not including the “Withdrawal Button” on its website.
Until 2022, fines for infringements to the Consumer Protection Law could be up to ARS 5,000,000 (USD 26,315). In December, the amount was updated and now fines can be up to ARS 233,620,800 (USD 1,299,583).