Declaration of Unconstitutionality of the Law for Transparency, Prevention, and Combating of Improper Practices in Advertising Contracting.

July 13, 2023

In June 2021, the Law for Transparency, Prevention, and Combating of Improper Practices in Advertising Contracting was enacted. The objective of this law is to regulate the operation of advertising agencies, providers, and contractors of advertising services, as well as to penalize various practices which are considered improper in this industry (primarily the resale of advertising spaces), and therefore detrimental to advertisers and consumers.

This brief law, consisting of only 13 articles, caused a significant uproar among all stakeholders in the advertising industry, with many of them filing Amparo lawsuits to prevent the application of this law, including Mexico’s most important advertising agencies.

It so happens that in this month of June 2023, the full bench of the Mexican Supreme Court of Justice has invalidated the Decree by which this Law was issued, due to violations in its legislative procedure, specifically the principles of informed and democratic deliberation, as well as the rights of parliamentary minorities. The Court held that this not only impacted the quality of the debate but also that the votes were cast without timely and informed knowledge of the respective reports.

Likewise, the Supreme Court has considered that this law contravenes the freedom of trade, stating that the resale of advertising spaces should not be considered an illicit activity, but rather a commercial activity protected by the principle of autonomy of will, just like any other legal and commercial relationship carried out by advertising agents, whether with advertisers, sellers of advertising spaces, or media outlets, in any of their forms.

Once the official version of this judgment is published, its real impact will be known, which is expected to render the law ineffective, given that it has been resolved that it resulted from a flawed legislative process. However, such a decision leaves the door open for the Mexican Congress to modify, re-discuss, and reapprove this law.

At OLIVARES, we will be keeping a close eye on what happens with this law that could impact advertising practices, and we will keep you informed about this matter.