Consumer Protection Department Report | Abusive terms: Changes in the application of the Argentine Consumer Protection Act?
Dear Sir or Madam,
During the past week, media reported that the Consumer Protection Sub Secretariat − Subsecretaría de Acciones para la Defensa de las y los Consumidores- (the “Sub Secretariat”) filed statements of objections against three digital platforms that offer delivery services (Rappi, Globo and PedidosYa) for including abusive terms in their terms and conditions.
Although the filings are not public, according to certain news reports the terms objected involve misleading descriptions of the services, limitations of liability, and the jurisdiction of foreign courts.
Pursuant to the Argentine Consumer Protection Act No. 24.240 (“CPA”) and other regulations (including Resolution No. 53/2003 on abusive terms), the inclusion of abusive terms in any agreements subject to consumer regulations is illegal.
Section 37 of the Argentine CPA includes a general prohibition that establishes that all terms that distort suppliers’ obligations, limit liability, involve a renunciation of consumers’ rights, or invest the burden of proof are abusive and invalid. Resolution No. 53, in turn, establishes a number of examples of terms that are abusive, including those establishing the jurisdiction of foreign courts or limiting the exercise of legal rights by consumers, among many others.
Although Section 38 of the Argentine CPA establishes that the Secretariat of Commerce (the Agency in charge of consumer regulation enforcement) has the authority to control those agreements involving consumers do not include abusive terms, until now the Secretariat and the Sub Secretariat had followed a “passive” approach to enforcement regarding abusive terms: in the event that a consumer filed a complaint they would file a statement of objections, and eventually declare the term invalid in connection with that consumer. In the context of a class action, a Court may − in addition to establishing liability in cases where there is harm- also declare the term invalid for a class of consumers.
Information disclosed by the media suggests that a change in the approach to enforcement might take place: firstly because this approach suggests that there could be a more active, ex officio monitoring of allegedly abusive terms. Secondly, this approach suggests that allegedly abusive terms could be questioned per se without complaints; in other words, that their mere inclusion in terms and conditions would be subject to scrutiny and objections.
From a practical perspective, this approach has at least two consequences. The first is that the distinction between adoption and enforcement of a term seems meaningless. The second is that the practice usually adopted by digital platforms operating in many jurisdictions, that usually adopt terms with the disclosure “to the extent permitted by local laws”, that had not been questioned so far, may become risky.
Should you require any further information on this matter, please do not hesitate to contact us.
Tomás López Bisso