What laws may be amended?
The Federal Consumer Protection Law; specifically the advertising obligations, in connection with misleading advertising
 
Who may be impacted by the BoL?
 
The BoL is aimed to regulate "influencers" who operate on digital platforms; however, due to poor legislative technique, the BoL is highly likely to have an impact as well on brand owners/advertisers.
 
What may be the potential consequences?

This BoL intends to regulate "influencers". However, instead of creating a definition of "influencers" consistent with comparative law regimes, the drafters opted to create a new concept, which is "creators in the field of digital advertising". By failing to define such concept in the BoL, the drafters created a confusing framework, where it is very difficult to distinguish "influencers" from brand owners/advertisers. Therefore, it is unclear whether the new set of obligations aimed to reduce misleading advertising apply to the influencer or the advertiser.
 
While some of the obligations mentioned in the BoL are typical for influencers, others refer to obligations specific to advertisers and expand on them. Also, the confusion between the terms "influencer" and "advertiser", which are used interchangeably  in the BoL, creates ambiguity and contradictions with other advertising regulations, such as transparency advertising laws.
 
With regard to enforcement, the BoL does not include specific fines against influencers who fail to comply with the applicable provisions. As long as there is no amendment to the fines established in the Federal Consumer Protection Law, it is unclear how enforcement will be carried out. In the absence on specific fines for influencers, we believe consumer protection authorities may bring action jointly or separately against advertisers and influencers alike. Advertisers has the more to lose, as advertisers could face fines for misleading advertising, which may go up to 10% of the income generated by publicity or a certain specific product or service.

This BoL intends to regulate "influencers". However, instead of creating a definition of "influencers" consistent with comparative law regimes, the drafters opted to create a new concept, which is "creators in the field of digital advertising". By failing to define such concept in the BoL, the drafters created a confusing framework, where it is very difficult to distinguish "influencers" from brand owners/advertisers. Therefore, it is unclear whether the new set of obligations aimed to reduce misleading advertising apply to the influencer or the advertiser.
 
While some of the obligations mentioned in the BoL are typical for influencers, others refer to obligations specific to advertisers and expand on them. Also, the confusion between the terms "influencer" and "advertiser", which are used interchangeably  in the BoL, creates ambiguity and contradictions with other advertising regulations, such as transparency advertising laws.
 
With regard to enforcement, the BoL does not include specific fines against influencers who fail to comply with the applicable provisions. As long as there is no amendment to the fines established in the Federal Consumer Protection Law, it is unclear how enforcement will be carried out. In the absence on specific fines for influencers, we believe consumer protection authorities may bring action jointly or separately against advertisers and influencers alike. Advertisers has the more to lose, as advertisers could face fines for misleading advertising, which may go up to 10% of the income generated by publicity or a certain specific product or service.


High-Level Information of the bill

Bill

Amendment to the Federal Consumer Protection Law

Date

May 18, 2022

Author

María del Rosario Merlín García

Political Party

MORENA

Jurisdiction

Federal

Relevance

Medium

Link to Bill

https://infosen.senado.gob.mx/sgsp/gaceta/65/1/2022-05-18-1/assets/documentos/Ini_Morena_Dip_Rosario_Div_Disp_Proteccion_Consumidor.pdf

Status

Under revision of Congress