Banned advertising. The case of stealth advertising | Abeledo Gottheil

Banned advertising. The case of stealth advertising

9 March 2022 |

For the purposes of this work we will define as “stealth advertising” the advertising that promotes products or services within a communication space without viewers knowing that it is an advertisement.  They are advertising messages within informative, entertainment spaces or spaces of fiction which are not perceived as advertising by the public.

Stealth advertising is considered in several countries as a kind of misleading advertising, but not due to the content of the advertising itself; but because the message appears as an information and the public is not – or could not be – able to recognize its advertising nature.

According to certain Spanish doctrine, in order that a message that is presented falsely as informative and in the end is considered an advertising spot, and, consequently, is subsumed in the modality of stealth advertising, the three following requirements must be met. The message must have an advertising purpose; which must not be clearly recognizable by the recipients and it must not include warnings that explicitly inform the public on what the advertising communication is about.[1]

This practice in which advertising is not identified is considered per se as misleading by the Spanish Act 3/1991, dated January 10, of Unfair Competition[2], which section 26, in what concerns us here, sets forth the following:

“Section 26. Covert commercial practices. The practices which: 1. Include as information in the media or in services of the information society or social networks, communications to promote a good or service, and the businessman or professional pays for said promotion, without clearly specifying in the content, or through images and sounds clearly identifiable for consumer or user, that it is an advertising content are considered unfair because they are misleading.” (Emphasis added).

In our national law system there is no general regulation forbidding stealth advertising.

It is mentioned only, as such, in Provision 4980/2005 issued by the National Food, Drug and Medical Technology Administration (Administración Nacional de Medicamentos, Alimentos y Tecnología Médica -ANMAT-), which in its Annex I (general rules to be complied with by every advertising or publicity addressed to the public in general of any of the products listed in Section 1st of Resolution 20/2005), issued by the Ministry of Health and Environment, sets forth the following:

“Every advertising or publicity of the products mentioned in Section 1st of Resolution of the Ministry of Health and Environment Nº 20/2005[3] shall comply with the following requirements, notwithstanding those set forth for each category of particular product: … 3. It must not be stealth, misleading, indirect, subliminal or unfair advertising.” (Emphasis added).

And in its GLOSSARY Provision 4980/2005 defines: “STEALTH ADVERTISING: Advertising that hides the advertising nature of an information, presenting it as part of the wording of the media, so that the public takes the information as objective and impartial when indeed it is a commercial advertising.” (Emphasis added).

The Audiovisual Media Services Act, N° 26.522, contains some provisions tending to avoid stealth advertising, in its section 81. Its subsection k) provides for regulations on “teleshopping” programs, its subsection ñ) determines the separation of the commercial segment of the TV broadcast and in its subsection p), it refers to the so-called “infomercials”.

Section 81, in what concerns us here, was regulated by the Resolution of the then AFSCA (Federal Authority for Audiovisual Communication Services) N° 499/2010. The regulation defines “infomercial”, in its section 1, subsection b): “Infomercial: is a kind of commercial communication that adopts the format of a program or micro TV program of at least fifteen (15) minutes long, that presents the characteristics, applications and usefulness of one or several products, goods, trademarks and/or services. It includes the modality of “advertorial”, which, under the guise of journalistic genres like the interview or chronicle, promote products, goods, trademarks and/or services.

To prevent stealth advertising, section 2nd of Resolution 499/2010 provides that the top of the screen should show a clearly legible overprint specifying that it is a “Teleshopping Program” or an “Infomercial Program “, throughout its duration.

The relevant national regulation referred to the advertising activity and the protection of consumers in general are, in my opinion, the Civil and Commercial Code of the Nation, Act 24,240, of Consumer Defense, the (Emergency) Executive Order 274/2019, Fair Commercial Practices Act, the so-called Act 17,011, Act 26,522 mentioned above, for Audiovisual Communication Services and the Argentine Food Code.

The Civil and Commercial Code of the Nation deals with the information and advertising addressed to consumers in Section 2nd, of Title III (Consumer Contracts) of Book Third Personal Rights).

Its Section 1101, subsection a) bans misleading advertising[4], its section b) comparative advertising, when it is misleading[5] and its subsection c) abusive, discriminatory advertising as well as advertising inducing consumer to behave in a disruptive or dangerous way for health or security.

  1. Ban of misleading advertising

The regulation of subsection a) of section 1101 of the Civil and Commercial Code of the Nation, which bans the so-called misleading advertising, is – let’s say – supplemented by other general regulations.

In the first place, by the so-called Act 17,011, that included into the Argentine law system the Paris Convention for the protection of Industrial Property dated March 20 1883.[6]

Section 10 bis of the Paris Convention, in its subsections 2) and 3), sets forth that every competition act contrary to fair use in industrial or commercial matters (subsection 2) is an unfair competition act and that mainly the following must be banned: “1st any act of such a nature that it creates confusion, through any means whatsoever, with the establishment, products or the industrial or commercial activity of a competitor… 3rd the indications or allegations which use, in the practice of trade, is subject to leading the public to mistake on the nature, manufacturing method, characteristics, ability to work or the quantity of goods.” (Subsection 3).

This kind of illegal advertising is regulated also by section 11 of the (Emergency) Executive Order 274/2019, on Fair Commercial Practices, which under the title “Misleading advertising” bans every kind of presentation, advertising or publicity which through inaccuracies or concealment may lead to mistake, deception or confusion with respect to the characteristics, nature, origin, quality, purity, mix, quantity, use, price, commercialization conditions or production techniques of personal property, real property or services.

Subsection a) of section 10 of decree 274/2019 provides for, in turn, that leading to mistake on the existence or nature, manufacturing or distribution method, main characteristics, purity, mix, suitability for use, quality, quantity, price, sale or purchase conditions, availability, results that may be expected from their use and, in general, on the attributes, benefits or conditions corresponding to goods and services are considered unfair competition acts.

Subsection b) of the above said section 10 bans leading to mistake with respect to the business origin of the activity, the establishment, the own goods or services, so that it is considered that they have an origin other than the corresponding one.

Subsection h) provides for another deception manner, the imitation of goods and services or business initiatives when it is suitable for generating confusion with respect to the origin of the goods or services or entails an improper use of another’s reputation or effort.

Finally, subsection i), bans denigration acts when they are based on false assertions.[7]

The general rule of the first paragraph of section 4th of Act 24,240[8], on Consumer Defense, that sets forth the duty to inform of the suppliers of goods and services, could be used in addition by the Enforcement Authorities of the regulation to suppress misleading advertising.

Misleading advertising of food is banned in addition by several regulations of the Argentine Food Code and Provision 4980/2005 of the National Food, Drug and Medical Technology Administration (ANMAT). For example, sections 221 and 222 of the Argentine Food Code[9] and sections 2.9.e) and 2.9.k) of Annex III of Provision ANMAT 4980/2005.[10]

  • Ban of comparative advertising, when it is misleading

The regulation of subsection b) of section 1101 of the Civil and Commercial Code of the Nation bans comparative advertising when comparison leads consumer to mistake.[11]

Comparative advertising – defined by section 15, first paragraph, of decree 274/2019[12] – is regulated in addition by the Unfair Practices Regime. To be considered legal it shall comply with the following conditions:

a) It shall not lead to mistake, deception or confusion between the advertiser and a competitor or between the advertiser’s goods and those of some competitor.

b) It shall compare goods that meet the same needs or have the same purpose.

c) Comparison shall be made objectively, between one or more essential, relevant, representative and verifiable characteristics of said goods (among which price may be included).

d) The purpose of advertising must be to inform the public to whom it is addressed on the advantages of the advertised goods.

e) Advertising must neither discredit nor denigrate the intellectual and industrial property rights or some competitor’s circumstances.

f) Advertising shall not obtain improperly advantage of the reputation of a trademark of some competitor.

g) It shall not present, either, a good as an imitation or replica of a good with a protected trademark or trade name.

h) In the event of goods protected by a designation of origin, geographical indication or specific name, comparison may be made only with other goods of the same denomination.

  • Ban of discriminatory advertising

The regulation of subsection c) of section 1101 of the Civil and Commercial Code of the Nation bans abusive and discriminatory advertising, –not defining it – and the advertising that leads consumer to behave in a way detrimental or dangerous to health.

The broadcasting of discriminatory advertising is banned in addition by section i) of section 81 of Act 26,522, of Audiovisual Media Services, that sets forth – as regards the issue herein discussed – that: “i) Advertisements shall not imply discriminations of race, ethnicity, gender, sexual orientation, ideology, socio-economic or nationality, among others; shall not undermine human dignity, shall not offend moral or religious beliefs…”

The Act for the Integral Protection to Prevent, Punish and Eradicate Violence against Women in the Area where they Develop their Interpersonal Relationships, Nº 26,485, bans also discriminatory advertising with respect to the female gender.

Section 4th, second paragraph of the regulation, considers as indirect violence, for the purposes of the Act, every discriminatory conduct, action, omission, provision, opinion or practice that disadvantages woman with respect to man.

And in its section 5th it defines symbolic violence as a type of violence against woman, which is defined as the violence that, through stereotyped patterns, messages, values, icons or signs transmits and reproduces domination, inequality and discrimination in the social relationships, naturalizing woman’s subordination in society.

“Media Violence against Women” is especially comprised in the regulation – among other modalities set forth in said section 6th, which is defined as the publication or spreading of stereotyped messages and images through any mass media, which directly or indirectly promotes the exploitation of women or their images, insult, defame, discriminates, dishonor, humiliates or infringes women’s dignity, as well as the use of women, adolescents and girls in pornographic messages and images, legitimizing unequal treatment or constructing socio-cultural patterns that reproduce inequality or generate violence against women.

  • Ban of advertising leading consumers to behave in a disruptive or dangerous way for their health or security

The regulation of subsection c) of section 1101 of the Civil and Commercial Code of the Nation bans advertising that leads consumers to behave in a disruptive or dangerous way for their health or security.

Subsection i) of section 81 of the Audiovisual Media Services Act 26,522, along the same line, sets forth that advertising must not lead to a detrimental behavior for environment or physical and moral health of children and adolescents.

  • Ban of abusive advertising

The regulation of subsection c) of section 1101 of the Civil and Commercial Code of the Nation bans abusive advertising, but it does not define it.

Abusive advertising has been marked as advertising based on and insisting with emotions, motivations and direct suggestions, appeals to vertigo and discrimination, fears, beliefs, generating or exacerbating anxieties, directly or through subliminal mechanisms.[13]

In comparative law, section 37, paragraph 2nd of the Brazilian Consumer’s Rights Code, sets forth that discriminatory advertising of any nature whatsoever, inciting violence, exploiting fear or superstition, takes advantage of the child’s judging and experience deficiency, does not observe environmental values or that may lead consumers to behave in a disruptive or dangerous way for their health or security, among others, is abusive.

In Spain, the Advertising General Act 34/1988, in its section 3, subsection a), characterizes it as “Advertising infringing the person’s dignity or violating the values and rights acknowledged in the Constitution, especially those referred to in its sections 18 and 20, paragraph 4. Advertisements that present women in a degrading manner, either by particularly and directly using their body or parts thereof as a mere object not related to the product that is intended to promote or their image associated to a stereotyped behavior that violates the grounds of our body of laws contributing to generate the violence referred to in the Organic Law of integral protection measures against gender-based violence, shall be understood as included in the preceding provision.”

In Argentina doctrine has considered that abusive advertising mainly violates the consumer’s right to a fair and equitable treatment, guaranteed by section 42 of the National Constitution, section 8 bis of the Consumer Defense Act, sections 1097 and 1098 of the Civil and Commercial Code of the Nation[14] and the set of rights, principles and values acknowledged by the National Constitution and international treaties of human rights with constitutional rank pursuant to section 75, subsection 22 of the National Constitution.[15]

  • The case of stealth advertising

In short, the Civil and Commercial Code of the Nation, or Decree 279/19, nor the Consumer Defense Act, and the Paris Convention for the protection of Industrial Property dated March 20, 1883 either, expressly regulate stealth advertising.

Provision ANMAT 4980/2005, which I referred to above, that mentions stealth advertising to ban it, is insufficient, because it applies only to certain products and is limited to certain media.

Some renowned colleagues state – without much conviction, it seems to me – that stealth advertising could be considered banned in Argentina by way of interpretation; either of section 9 of the Emergency Decree 274[16] or of some subsections of its section 10th or of section 4th of the Consumer Defense Act or of section 1101 of the Civil and Commercial Code of the Nation or of section 10 bis of the Paris Convention (Act 17,011).

Those interpretations do not convince me and I believe, in addition, that they could threaten legal certainty.

In my opinion, stealth advertising should be subject to the express treatment of our national legislation.

I think that it would be appropriate – along the lines of the Spanish Act 3/1991, of Unfair Competition – to add to the regulation of section 10th of (Emergency) Decree 274/2019 a subsection expressly setting as a “particular event” of unfair competition act the making of “stealth advertising”, that likewise would need a clear definition in the same regulation, so that the administered parties may know as precisely as possible, which is the banned behavior.

My previous opinion in the preceding statement is implied in the sense that I do not believe that it is useful – and in the best-case scenario it would be insufficient – to legislate on the particular case of stealth advertising carried out by the so-called “influencers”, in the social networks.

I believe that stealth advertising must be regulated with a general regulation comprising the one broadcasted by any media – not limited to social networks – and to be made by any person or entity – not only by influencers. And, of course, it should comprise all the products and services.

Buenos Aires, March 9, 2022.

[1] See the interesting article of Gabriel Martínez Medrano, “Advertising communication of ‘influencers’ in social networks. Analysis of the regulation in Comparative Law and outlook in Argentina” (La comunicación publicitaria de ‘influencers’ en redes sociales. Análisis de la regulación en el Derecho Comparado y panorama en Argentina.) Note 15: “As pointed out by TATO, RDM nº 311, p. 53; see, also, TATO PLAZA/ FERNANDEZ CARBALLO-CALERO/ HERRERA PETRUS, in “Reform of the Unfair Competition Act” (La reforma de la Ley de Competencia Desleal), La Ley, Madrid, 2010, pp. 133 et seq both quoted by Otero Lastres…”

[2] The purpose of said Act, as set forth in its section 1st is “… the protection of competition in the interest of all who participate in the market, and to such end it sets forth the prohibition of unfair competition acts, including illegal advertising under the terms of the Advertising General Act.”

[3] Section 1st of the Resolution of the then Ministry of Health and Environment 20/2005 reads as follows: “Every advertising or publicity addressed to the public of over-the-counter medicinal specialties and dietary supplements, as well as dental products, diagnostic reagents, cosmetic products, medical technology devices, domisanitary products, food determined by the enforcement authority, whatever the media used for its broadcasting is, shall comply with the ethics criteria set forth by the NATIONAL FOOD, DRUG AND MEDICAL TECHNOLOGY ADMINISTRATION (ANMAT).”

[4] On proscribing advertising that “a) contains false indications or which induce or may induce to mistake to consumer, when they fall on essential elements of the product or service;”

[5] It bans advertising that makes comparisons of goods or services when they are of such a nature that they lead consumer to mistake.

[6] At the  time of the inclusion, with Brussels reviews of December 14, 1900, of Washington dated June 2, 1911, of The Hague dated November 6, 1925, of London dated June 2, 1934 and of Lisbon dated October 31, 1958.

[7] I) Denigration acts: “Undermine the image, credit, fame, prestige or reputation of another competitor, unless the assertions are accurate, relevant and true.” In the same sense, item 2nd of subsection 3) of section 10 of the Paris Convention bans “2nd False allegations, in the practice of trade, tending to discredit the establishment, the products or the industrial or commercial activity of a competitor;”.

[8] “Section 4th – Information. Supplier is obligated to supply to consumer in a certain, clear and detailed manner everything related to the essential characteristics of the goods and services it owns and their commercialization conditions.”

[9] Which respectively set forth that: Section 221 – (Resolution MS 2343, 19/4/80) (Ratified by the Joint Resolution of the Ministry of Health and Environment (MSyA) 149/05 and the Secretariat for Agriculture, Livestock, Fishing and Food (SAGPyA) 683/05) “In advertising made through any media the definition, composition and name of the product provided for by this Code shall be observed.” and Section 222 – (Resolution of the Ministry of Health 2343, 19/4/80) (Ratified by the Joint Resolution of the Ministry of Health and Environment (MSyA) 149/05 and the Secretariat for Agriculture, Livestock, Fishing and Food (SAGPyA) 683/05) “The labeling and advertising of the products contemplated in this Code are banned when as from the health-bromatological standpoint -the same may lead to the consumer’s mistake, deception or confusion.”

[10] That also respectively provide for that: “2- Every advertising or publicity of food shall not:… 2.9 Include phrases and/or messages that:… e) Tend to mask the specific features of the product… k) Use words, signs, names, symbols, emblems, illustrations or other graphic representations that turn said information into false, inaccurate and/or insufficient, or that may lead consumer to mistake, error, confusion or deception in connection with the true nature, composition, origin, type, quality, quantity, duration, performance or way of use of food”

[11] The regulation reads as follows, “Every advertising that … b) compares goods or services is banned when their nature lead consumer to mistake”.

[12] As the advertising that refers, explicitly or implicitly, to a competitor or to its trademark or to the products or services offered by said competitor.

[13] Pursuant to Pérez Bustamante, Laura, “Consumer Social Right” (Derecho Social del Consumo), La Ley, Buenos Aires, 2005, page 403.

[14] Section 109. Fair treatment. Suppliers must guarantee the consumers’ fair service and treatment conditions. The person’s dignity must be respected according to the general criteria arising from human rights treaties. Suppliers must refrain from displaying behaviors that place consumers in embarrassing, degrading or intimidating situations.

Section 1098.- Equitable and non-discriminatory treatment. Suppliers must offer consumers an equitable and non-discriminatory treatment. They cannot set differences based on guidelines contrary to the equality constitutional guarantee, especially, the consumers’ nationality.

[15] Pursuant to Barocelli, Sebastián, “Regulation of advertising in the Civil and Commercial Code” (La regulación de la publicidad en el Código Civil y Comercial), Consumer’s Right Magazine (Revista de Derecho del Consumidor) –N# 1 – November 2016, Printing House: IJ Editores, 11/30/2016.

[16] That sets forth the following: “SECTION 9TH. – General Clause. Every action or omission that through improper means proves to be objectively fit to affect the competitive position of a person or the proper operation of the competitive process constitutes an unfair competition act.”


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