Argument: Consumer Protection Violation

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Red PaPaz v. Rappi S.A.S [Colombia] [March 02, 2022]

On December 2, 2019, the Colombian Association of Fathers and Mothers – Red PaPaz, filed a claim before the Colombian Superintendence of Industry and Commerce (SIC) against Rappi S.A.S (Rappi), a Colombian on-demand delivery online company, for the lack of mechanisms on Rappi's e-commerce website and mobile app to ensure that minors do not search and buy harmful products through them (such as alcohol and tobacco products). Specifically, the complaint alleged that minors could access, purchase and receive alcoholic beverages and tobacco products through Rappi's website without any significant limitations and without their age being verified at the time of purchase and delivery. This lack of protective measures violated the norms for the protection of minors established in Colombia's Law No. 1801-2016, Childhood and Adolescence Law. The complaint filed by Red PaPaz was investigated jointly, with many additional complaints filed by Colombian consumers against Rappi due to a series of infringements of the Colombian Consumer Protection Law. Upon completing the investigation, the SIC verified each of the infractions reported by Red PaPaz and several other consumers and determined to fine Rappi approximately $312,000.00 USD ($1,245,000,000.00 Colombian pesos). The decision has been challenged by Rappi.

BAT - Surreptitious Advertising of Glo on Social Media [Italy] [September 30, 2021]

A consumer protection organization brought a complaint before the Italian Competition Authority alleging British American Tobacco Italia S.p.A. (BAT) and individual social media influencers violated the Consumer Code through Instagram posts promoting Glo Hyper, a heated tobacco product. The specific promotional practice at issue was a "call to action" where the influencers encouraged their followers to post content containing tags and hashtags related to Glo without asking them to also disclose the promotional nature of the posts. The influencers would then re-post the best user-generated content.

Ultimately, the regulatory authority declined to find an offense because both BAT and the influencers made certain commitments that the regulatory authority felt were sufficient to provide consumers with complete and accurate information going forward. These commitments by BAT included: (1) the adoption of Influencer Marketing Guidelines; (2) the addition of contractual provisions should BAT directly contract with influencers in the future; (3) the addition of contractual language if BAT contracts with influencers through an agency that would require the agency to monitor the influencers' activities and adherence to the Guidelines; (4) asking followers to include appropriate hashtags in any future calls to action; and (5) removal of the pages/posts that are subject to this dispute. The influencers agreed to: (1) remove the posts at issue; (2) use the appropriate hashtags in any future advertising and marketing activities; and (3) inform their followers that any user-generated content that doesn't contain the necessary tags or hashtags will not be considered in any contests.

Tabacalera Sarandí S.A. v. Argentine Tax Authority (AFIP) [Argentina] [May 13, 2021]

Tabacalera Sarandí S.A. had obtained a preliminary injunction to suspend the application of the minimum amount of a tax established for the commercialization of tobacco. Thus, the company could apply the tax rate (70%) on the retail price without considering the minimum amount. The company argued that this minimum put it at a disadvantage with other multi-national tobacco companies. The Argentine Tax Authority appealed the decision, saying that the ruling affected the public interest and the extra-fiscal purpose of the tax, which is the protection of public health. The Supreme Court ruled that the tobacco company had not sufficiently demonstrated its injury and did not prove the requirements to be granted with the injunction. Thus, the Court revoked the injunction.

Baldassare v. British American Tobacco Argentina [Argentina] [December 28, 2020]

The plaintiff brought an action against British American Tobacco (BAT) Argentina, seeking damages for all the health problems allegedly resulting from his use of tobacco products. In particular, he sought compensation for a heart attack he suffered. He claimed that when he began smoking, the advertisements were misleading and did not warn him about the possible health problems caused by the substances in cigarettes. The judge determined that: (i) the case was not time-barred, (ii) tobacco consumption was probably one of the reasons for the heart attack, and (iii) the victim did not assume the risks of smoking because he was not sufficiently well informed, as required by the country's consumer protection law, and because he was not free to direct his actions due to the addiction. The lower court determined that BAT had to pay compensatory damages and also a fine as punitive damages.

Public Ministry of Rio de Janeiro v. Rock World SA, Souza Cruz Ltda, and Vega Fina Tabacaria Eireli [Brazil] [November 02, 2020]

The Public Ministry in Rio de Janeiro presented a civil action against Rock World SA, Souza Cruz Ltda, and Vega Fina Tabacaria Eireli for illegal advertising in the festival "Rock in Rio" 2017. On November 2, 2020, the court concluded that the defendants engaged in unlawful advertising during the festival. The illegal advertising included (i) visually ostentatious advertising of smoking products and (ii) "mobile sellers.” On the other hand, the sale of a kit that included cigarettes and a lighter with the logo of "Rock in Rio" was not recognized as an illegal practice. The defendants were sanctioned as follows – (1) Defendants were fined R$ 2,000,000.00 for collective moral damages. For individual material and moral damages, each consumer will need to prove individually the actual damage suffered. (2) Defendants must carry out counter-advertising in partnership with public universities and hospitals informing consumers about the risks, prevention, and treatment of Chronic Obstructive Pulmonary Disease (COPD), and smoking cessation.

In addition to bringing this enforcement action against the illegal advertising that took place at the Rock in Rio 2017, the Public Ministry sought an interim judgment barring illegal promotional activities at the then upcoming Rock in Rio 2019 festival. In response to this request, the court issued a series of orders restricting the promotional activities at the 2019 festival.

Nicolás Parra Castro v. Superintendency of Industry and Commerce (Second Instance) [Colombia] [November 14, 2019]

The plaintiff, a member of “Educar Consumidores” NGO, filed a lawsuit to order the Superintendency of Industry and Commerce (SIC) to inspect, monitor, and control the advertising and promotion of tobacco products and their derivatives. Specifically, the plaintiff requested that the judges order SIC to demand that Coltabaco and Philip Morris Colombia withdraw all advertising of IQOS devices. In the first instance, the Court denied the claim because the norms invoked by the plaintiff did not contain an imperative and enforceable mandate against the defendant. On appeal, the Court confirmed the previous decision since it also understood that the cited norms -although they established the general prohibition on the advertising and promotion of tobacco products and their derivatives - did not create a clear and concrete obligation that corresponded specifically to SIC.

Nicolás Parra Castro v. Superintendency of Industry and Commerce (First Instance) [Colombia] [September 25, 2019]

The plaintiff, a member of “Educar Consumidores” NGO, filed a lawsuit to order the Superintendency of Industry and Commerce (SIC) to inspect, monitor, and control the advertising and promotion of tobacco products and their derivatives. Specifically, the plaintiff requested that the judges order SIC to demand that Coltabaco and Philip Morris Colombia withdraw all advertising of IQOS devices. In this case, the first instance, the Court denied the claim because the norms invoked by the plaintiff did not contain an imperative and enforceable mandate against the defendant.

Quebec Class Action Appeal [Canada] [March 01, 2019]

Quebec residents filed two separate class action lawsuits against the Canadian tobacco companies of British American Tobacco ("BAT"), Philip Morris International ("PMI"), and Japan Tobacco International ("JTI") ("tobacco companies"). The first class involved Quebec residents who had lung cancer, throat cancer, or emphysema. The second class involved Quebec residents addicted to nicotine. The court found that the tobacco companies caused injury, failed to inform customers of the risks and dangers of its products, and violated Quebec law.

On March 1, 2019, the Quebec Court of Appeals ("the Court") unanimously upheld the lower Quebec Superior Court decision and found that the tobacco companies intentionally misled consumers about the dangers associated with their products for more than 50 years. The Court upheld the lower court's decision, but made technical corrections, that the appellants pay moral damages to members of the Blais action, as well as punitive damages to both classes, with interest and the additional indemnity provided by law. The appellants’ liability was based on private law of general application (Civil Code of Lower Canada and Civil Code of Quebec ), the Tobacco-related Damages and Health Care Costs Recovery Act, the Charter of Human Rights and Freedoms and the Consumer Protection Act.

All three tobacco companies have indicated that they will likely appeal the decision to the Supreme Court of Canada.

For the earlier decision, see: JTI, et al. v. Letourneau, et al., No 500-06-000076-980 and No 500-06-000070-983, (Quebec 2015).

Esperanza Cerón Villaquirán et al v. Superintendencia de Industria y Comercio (SIC) [Colombia] [November 17, 2017]

Tobacco control advocates challenged the Superintendency of Industry and Commerce (Superintendencia de Industria y Comercio – SIC) resolutions that regulated point of sale tobacco product displays.  Tobacco control advocates alleged that these resolutions violated the complete ban on advertising, promotion and sponsorship established through Law No. 1335. The Colombian State Council held that these resolutions violated Article 13 of the Framework Convention on Tobacco Control (FCTC) and its guidelines that state that product display should be considered a form of advertisement. Consequently, the State Council mandated the SIC to repeal the resolutions, which was done through Resolution No. 1/2018.

Australian Competition and Consumer Commission v. The Joystick Company Pty Ltd. [Australia] [May 02, 2017]

The Australian Competition and Consumer Commission successfully took action against an e-cigarette company for making false and misleading statements in violation of the Australian Consumer Law. The e-cigarette company stated on its website and in a YouTube video that its products did not contain carcinogens and toxic substances found in traditional tobacco cigarettes. 

In this decision, the court accepted the Commission’s recommendations and ordered the company to stop making statements that its products do not contain carcinogens and toxic substances for a period of three years. The court found that the company had no evidence to support its statements, which had the potential to mislead consumers who might not have purchased the products if they had known about the presence of these chemicals. Additionally, the court ordered the company to include information on its website about this decision for 90 days. Finally, the court fined the company $50,000 and its director $10,000.