News Alert—The Secretariat of Domestic Trade issues new regulations for the Fair Trading regime and subdelegates powers of investigation and inquiry

On August 24, 2020, the Secretariat of Internal Trade of the Ministry of Productive Development, in its capacity as the enforcement authority for Decree 274/2019 on Fair Trading (the “Fair Trading Decree”), published Resolution 241/2020 (the “Resolution”) in the Official Gazette, whereby:

1. a new regulation of the Fair Trading Decree is issued, repealing Fair Trading Law No. 802;
2. empowers the Undersecretary for Domestic Market Policies of the Secretariat of Domestic Trade of the Ministry of Productive Development (the “Undersecretary for Domestic Market Policies”) to perform certain tasks in relation to the application of the Fair Trading Decree;
3. entrusts the National Directorate for Domestic Market Development Policies (the “Directorate”), under the Undersecretary for Domestic Market Policies, with the control and monitoring of Titles I, II, and III of the Fair Trading Decree and the instruction of the corresponding summary proceedings; and
4. the previous regulations of the Fair Trading Decree, namely Resolution No. 248/2019 of the Secretariat of Internal Trade, are repealed, with the exception of Articles 22 and 23.

In particular, the Resolution empowers the Undersecretary of Domestic Market Policy, among other things, to carry out the following actions:

• Establish the requirements that contests, competitions, raffles, and promotions of products and services must meet;
• Determine the location, form, and characteristics of the indications to be placed on goods marketed in the country or on their packaging;
• Determine the contents or measures with which the goods must be marketed;
• Analyze the appropriateness of the precautionary measures provided for in Article 45 of the Fair Trading Decree;
• Sign administrative acts ordering the dismissal of complaints, within the framework of the procedures carried out under the Fair Trading Decree;
• Analyze the appropriateness of requests for searches of the premises referred to in Article 26(m) of the Fair Trading Decree, on non-working days and hours; and
• Require the owner of a digital marketing channel to remove or cancel advertisements and/or offers of products or services when non-compliance with any of the rules set forth in Titles I, II, and III of the Fair Trading Decree is verified.

Likewise, the Resolution designates the Directorate as the control and surveillance body which, in accordance with the Resolution, will have the same powers as the Fair Trading Directorate had under the previous regulations.

Finally, the Resolution approves new regulations for the Fair Trading Decree. However, the new regulations are substantially similar to those previously issued. Among the points to highlight are:

• No simultaneous administrative proceedings may be brought before the CNDC or the Secretariat of Domestic Trade and before the Directorate for the same acts or conduct;
• The resolution instructing the preliminary investigation in accordance with the provisions of Article 39 of the Competition Law issued by the competent authority has the effect of res judicata in relation to the proceedings under the Fair Trading Decree. However, the interested party may file a complaint with the Directorate if the resolution dismisses the complaint as inadmissible or closes the proceedings prior to the opening of the investigation, provided that the facts involve a violation of Article 10 of the Fair Trading Decree (relating to acts of unfair competition);
• Advertising that provides incomprehensible information, whether due to the speed of the speech, the size of the font, or any other characteristic that distorts it, is considered misleading.
• When organizing or promoting contests, competitions, or sweepstakes that are not prohibited by Article 14 of the Fair Trading Decree, the provisions of Decree No. 961/2017 and Resolution No. 89/1998 of the former Secretariat of Industry, Trade, and Mining must be complied with.
• A special electronic address must be established by registering on the “Remote Procedures” (TAD) platform for administrative purposes, for the initiation of a complaint, the fulfillment of obligations, and for the delivery or receipt of communications of any nature.
• The Directorate may intervene ex officio in the acts provided for by the Fair Trading Decree.
• The imposition of the sanction must be made by a well-founded resolution of the Enforcement Authority, which must be expressed in Mobile Units and notified to the parties; and
• In order not to cause an unreasonable or excessive sanction, the amount of final administrative, criminal, or civil fines for violations of other applicable laws with respect to the same act shall be considered.