Lunes 7 de Oct.

de 19

What makes good advertising?

“How malboro changed the Company”

example Research and share: Facebook had a massive drop in values, we can see how there´s
an effective relation between advertising and a Company

Where do advertising laws come from?

U.S; regarding medicine, the idea wa try to regulate the transportation of “ilegal” food and
drugs.

Where do advertising laws come from in Chile?

In La Aurora de Chile, the first newspaper in Chile there was an advertising about soap,
generally about healthy and cleaning products, and in 1968 there was a Decree with force
of aw that prohibited any form of publication “pp

Ex. Whisky advertising.

Only in 1997 the consumer protection law, which is the one that we currently now.

ICONIC AD CAMPAIGNS
1942: “ We can do it” vs the original one “get the power to clean everything”, so they used
the cleaning ad campaign to an international ad campaign about feminism.
The creator of the old ad has the creative property of the image and now is like a billionaire.

1954. malboro
1931. Coca Cola, it tries to associate their brand with joy
1947. A iamond is forever, it was a romantic idea to relate the marriage to a diamond.
1988. Just do it, nike. It can be identified in the whole world.
Colin Kaepernick Nike As. During the national anthem he protested about racial injustice,
it was a big scandal, causa nike used the situation for a new ad.

Advertising Law and its relevance in the company’s reputation.

Which is the most valuable brand

 Amazon
 Apple
 Google
 Microsoft
 Visa

Most valuable brands in Chile

 Falabella
 Sodimac
 Copec
 Banco de Chile
  Lider

The company with the best reputation.- In Osorno, Colun helped with the catastrophe and
the company’s reputation went up.

Impact and Reputation of Trademarks

 Brand: Any sign used to distinguist in the market: products, services, industrial and
commercial establishments.
 Reputation: Opinion or consideration in which someone or something is held, and
prestige or esteem in which someone or something is held.

67% of the VALUE of a company comes from intangible assets, such as reputation and
knowledge (human capital).

Impact and Reputation of trademarks

Soprole case “la Guerra de la leche” -> June 2019, a group of deputies denounced Soprole,
Nestlé and Watts for collusion in milk prices.
In addition, the media debate around natural and reconstituted milk.

Media Impact of Advertising

 Utensilios y limpiadores Clorox, la pareja ideal para la mujer de hoy.
It was a sexist ad in a magazine.

 H&M retira de su web una foto criticada por racism.- African American boy.

 Dove.- where an African American girl “transforms” into a white girl after using the
soap.

Main concepts and definitions of Advertising Law.

Legal definition
 Advertising is an efficient tool for companies to attract consumers.
 Advertising law is a legal branch dedicated to the regulation of advertising on
television, radio, press, social networks and their different implications and
limitations.

It has a broad scope of application-> packaging, product brochure, tv commercials web

pages, social network, radio, banners, etc.
Function
 Inform de consumer about the product
 To persuade or encourage the consumer to purchase the product.

Legal definition from Law 19496

Communication that supplier addresses to the public, through any mean, suitable for such
purpose in order to forma and motive them to contract or purchase services o products,
assuming that the objective conditions contained in the advertisement are incorporated to
the contract.

Mad Men: “its toasted” for lucky strike ad, manipulation of the media. You can say
anything you want, which is true, but you can never mislead the consumer. In this case, the
statement stays in a gray area.

Concept of Consumer and Provider: this concepts are generally similar around the world

Provider or supplier:
Natural or legal persons, of a public or private nature, who usually carry out activities of
production, manufacturing, importating, construction, distribution or commercialization of
goods or provision of services to consumers, for which prince or tariff is charged. People
who hold a professional title and exercise their activity independently will not be consider
suppliers.

4 requirements
1. Natural or legal person
2. Develops activities
3. Intended for consimer
4. Charge a price or fee.

Consumer:
Natural o legal persons who, by virtue of any burdensome legal act, acquire, use or enjoy,
as final recipients, goods or services. In no case may consumers who, according to the
following number, be understood as suppliers, be consider consumers.

There´s no generalized opinion about the free stuff given whether the consumer law should
or not apply. Corte Suprema and the bikes in supermarket, they apply the consumer law.

Lunes 14 de oct

Research and share activity.- bicky burgers (Belgium) and violence against women
The independent, Singapore forbid any advertising on high sugar drinks.

Law No. 21.081: reinforcement of the National Consumers Service (SERNAC)

Modifies the Ley del Consumidor, entry into force in march 2019.
i. Fines: they increased a ton ex. Misleading advertising increased in double (up to
1.500 UTM).
ii. Increase on the statute of limitations: Before 6 months since the infringement,
now 2 years since the infringement has ceased.
iii. New powers of SERNAC:
- To supervise and ensure the legal compliance to the law (greater powers to
request information from suppliers or enter properties of suppliers)
 - Power to summon legal representatives and dependents, it allows sernac to
summon representatives to declare about relevant background of the
investigation. Ex. You have contamination in your process, so sernac will ask you
a ton of info.

iv. Class Actions Trials

1. A special administrative procedure is created to regulate the current collective
actions.
2. Power to impose a fine for each affected consumer
3. Inclusion of compensation for non- material damages in collective actions – how is
it possible, since its intuito personae, it varies from person to person? Chile is the
first country to state this.

Non- material damage reparations

 SERNAC vs Correos de Chile

Remedies

Enforcement
Risks derived from the infringement of law
1. Complaints: consumers complaints before SERNAC.
After a complaint, if SERNAC sees that the same company has many other
complaints, it can request information to the supplier, initiate collective negotiation,
legal complaint + damages, class action.
2. Judicial Actions:
a. Legal complaint + damages
b. Class action (consumers collective or diffuse interest), should be (1) 50
consumers or more (2) sernac (3) Consumer associations
In case of a condemnatory ruling
 Fines
 Damages: as a consumer, should I prove the damage?

Misleading Advertising
A. Concept (art. 28 CPA)

“Advertising that uses false, misleading or unverifiable information in order to induce

consumers to purchase a good or contract a service”

It’s a false impression.

Art. 28 sanctions anyone who, aware of the duty of being aware, through any type of
advertising message, induces to error or deceit in relation with:

1. Components of the product (organic)

2. The suitability of the product in relation with the announced functions. (rain boots)
3. The relevant features of the products (himalayan salt)
4. The price (ex. Always 15% off)
 5. The terms of warranty (ex. 10 years but for an specific problem)
6. Its condition of being harmless to the environment (air fresheners)

B. How should advertising comply with the cpa

According to the concept we saw in class,

It should respect the right to accurate and timely information, be honest.

Principle of demonstrability (art. 33)

For instance, if it says it has a component you should be able to demonstrate that. For
example, having a document or certificate from a company, testing with consumers, etc.

Art. 8 ethic code

 Advertising must be honest and truthful
 Shouldn’t be misleading advertising, its also misleading to advertise any product as
having specific automatic benefits or effects, etc.

C. Cases
 SERNAC vs Adidas:

Easytone, it attributes the feature to improve muscle tone and appearance because of an
specific capsula in the sneaker.

It started in the USA, then a newspaper in Chile reported the news of the settlement between
the federal government and Adidas. Two days later, sernac filed a lawsuit against adidas.
The ad in the US said specific percentages, but in Chile the ad was different “moving air
technology”, it was a very specific technology. Adidas had a lot of info to prove those claims.

The decision: the court rejects the action because they proved the muscle toning was a
reality, still, the consumers stopped buying the products and the product disappeared.

 SERNAC vs Genomma Lab

They requested the information from the company, and they had to give it to sernac.
According to sernac, there were several companies infringing.

Cicatricure: sernac said the advertising was misleading

a. Look younger
b. 76% improvement in fine lines
c. 9 out of 10 women who tested the line Cicatricure presented improvement
according to the result
d. Can change the age of our skin.

Genoma lab won

So, you (1) need studies to prove that (2) serious studies (ex, university).
Sociedad Educacional el Maule, advertised the career of criminalistic expert, announcing
lots of work opportunities in public entities.
But in reality, those students never got a job since they never fitted the public criminalistic
arena.
The Court

D. Analysis