False Advertising In The Dominican Republic. A Reality Businesses Must Pay Attention To.
By: Luis E. Bernard
Practice Areas: Commercial Litigation, Unfair Competition, and Consumer Law.
A. Introduction
In today’s world, where new information and communication technologies (I.C.T.) are practically in each and every human activity, advertising plays a crucial role in any business development, both financially and reputational. Through advertising, companies do position their brands, attract clientele and promote the benefits of their products or services; and in doing so,
companies are expected to behave in an appropriate, reliable, and especially, truthful manner.
One common practice in the Dominican business community, though, is that in pursue of profits, companies incur, either intentionally or inadvertently, in False Advertising, while ignoring the legal consequences that providing false or misleading information to consumers might represent to the business engaged in said conduct.
B. Concept
General Law No. 358-05, on Protection of Consumer and User’s Rights prohibits “the use of images, texts, dialogues, sounds or descriptions directly or indirectly causing or that may cause inaccuracy or messages that might lead to consumer or user deception, error or confusion about the features, price and conditions of purchase or sale of the product or service offered or advertised.” (1) Other laws, like Law 42-08, on defense of competition, and Law 20-00, on Industrial Property, also set forth certain conducts that may be considered False Advertising, but, neither law 358, nor those other laws, do provide a clear definition of the concept.
On August 14, 2014, however, the National Institute for the Protection of Consumer Rights (Pro-Consumer)(2), adopted Resolution No. 016-20143, defining False Advertising as any advertising that in any shape or form induce or may induce to error a reasonable consumer in the selection of the product or service, either by giving false characteristics of the product or service, or by omitting fundamental information thereof. Resolution 016-2014 regulates in detail everything related with False Advertising in the Dominican Republic.
C. Most common irregular practices
According to a study about the market and the experience of False Advertising in the Dominican Republic, carried out in 2014 by Pro-Consumer, among the most common irregularities incurred by local business are the following: i) Products or services advertise and not available from the seller at the time of transaction; in their place, consumers are offered products or services of either higher price, or lesser relevance for them (96%); ii) Products or services offered and found in poor condition (2%); and, iii) Products or services at a different price than the advertised offer (2%).
D. Sanctions
Under law 358-05, the sanctions for engaging in False Advertising range from twenty (20) to five hundred (500) minimum salaries, depending on the characteristics and seriousness of the infringement (minor, serious, or very serious). It is Resolution 016-2014 that set forth the specific criteria to categorize infringements and level of responsibilities based, among others, on health risks, amount of the benefit earned by the infringer, degree of intentionality, severity of the social disturbance produced, recidivism of the infringer’s false advertising, etc. (4)
In addition to the sanctions that Pro Consumer may impose (either by its own initiative or acting upon complaints from private parties), consumers and competitors may also seek against the infringers legal remedies, mostly damages compensation, for any losses suffered due to the False Advertising.
E. Conclusion.
While prosecuting and sanctioning False Advertising is not yet heavily pursued, businesses must be aware of the existing rules and restrictions about advertising products and services in the Dominican Republic. This knowledge will not only prevent them from engaging in any practice that may be considered False Advertising, but also would allow that those affected by it, are able to seek proper remedies under the current legislation and engage the competent authorities.
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- Article 88, letter a).
- Created also by law 358-05, this is the administrative agency responsible for ensuring the correct operation of advertising in the Dominican Republic.
- The resolution can be found at the following link: http://www.proconsumidor.gob.do/files/16-2014.pdf
- Very recently, (December 2017), Pro-Consumer imposed a fine of 100 minimum salaries (approximately US$35,000.00) to a large aviation company, for engaging in alleged False Advertising. See http://proconsumidor.gob.do/2017/11/30/multa-ajetblue-por-publicidad-enganosa