Mercado, empresas y consumidores, Defensa de la competencia parte 1

Good morning everyone, my name is

Mariana Arena and today we'll be

covering the concepts of companies,

consumers, competition law, and consumer protection.

These topics

correspond to the classes of March 17th and 19th,

which were uploaded to

Leva with some exercises on the

topics, and which we will be

reviewing and delving deeper into today.

Regarding the recommended bibliography,

first of all, you have this book, which is the

Commercial Law course. In this book,

starting on page 46, you will find

everything related to

companies, and from page

259 onwards, everything related to competition law,

fair competition, and the entire

consumer protection regime. It is also necessary that

you study Law 7.250, which is

the Consumer Relations and Consumer Protection Law,

and Law 18.159, the

Competition Law. I

recommend that you download both laws from Impo

because they have undergone some

modifications since their enactment, and it is

important that the texts are up to date.

Okay, let's begin then with the

concept of a company. The

Conversion Code provides a concept of

The law does not regulate the company; it only

considers the commercial nature of

manufacturing, warehousing, commission, and

water or land transport companies

in Article 7, paragraph 4, classifying

these as commercial acts. This

means that, according to the Commercial Code,

other companies would not be considered commercial acts.

Regarding the current regulatory framework that

defines what constitutes a company, we find Bankruptcy

Law 18,387, which

refers to the sale of the company

as a whole during the

most active stage of the bankruptcy proceedings. However, there is no

specific definition of a company

within the current regulatory framework.

In national law, a company is not

conceptualized as an asset subject to

law, although,

as we established, Bankruptcy Law

18,387 refers to a

unitary sale as a whole.

This raises the question of

the company itself as a concept.

We understand it to be an

organized economic activity,

using external labor and

financial resources to produce goods or

services that are released to the market. This aligns with the

general economic doctrine that conceptualizes a

company as an organization. Regarding the

factors of production, capital and labor, used to

produce goods or services for

the market,

it is important that you distinguish this

concept of a company from a commercial establishment. A

commercial establishment is understood to be a

complex asset that is therefore subject to

law and can be

leased, sold, etc. The same does not apply

to the concept of a company, which,

as we see, involves an

organized economic activity

aimed at producing goods or

services that will be released into the

market.

As for the dissolution of a

company and a corporation, a

company is not a subject of

law, whereas a commercial corporation is a

legal entity. Furthermore, a company

implies the execution of an

economic activity that is developed in an

organized manner, combining the factors of

production. None of this is

necessary for the activity of a

corporation. Notwithstanding the fact that the

Commercial Companies Law, Law 6.060,

states that a corporation must, in

writing, carry out an

organized activity, as established in its Article

1, which seems to approximate the

social concept of a company, the

remaining provisions on this

aspect do not reappear, and this means that,

as we said,

a company is not necessarily a... Society does not

necessarily always try to clarify

that society implies a

legal entity, while a company is not

a subject of law. The distinction between

company and entrepreneur: although a company

implies the performance of an

organized economic activity to provide goods

or services to the market and is therefore

characterized by the combination of

capital and external labor, it is understood that

the owner will be called an

entrepreneur, who is a natural or

legal person who designs and develops the

organization and precisely the way of

combining these productive factors of

said activity. The entrepreneur can

also be a commercial company, but

that is not strictly necessary.

Furthermore, there are different types of

companies. We understand that a

micro-enterprise is one that has

1 to 4 employees,

maximum annual net sales

equivalent to $160,000, and

maximum assets would be $20,000.

A small company has

5 to 19 employees, maximum annual net sales

equivalent to $180,000, and

maximum assets of $50,000.

Then we would move on to a type of medium-sized

company where it has

between 20 and 99 employees.

Maximum annual sales are equivalent to 5

million dollars and their

maximum assets are 350,000 dollars. When

we enter the largest type, which are

multinational companies, there are

various production units

located in different countries that

carry out their activities. Their

decisions are centralized. These are

clearly cases like companies such as

Coca-Cola, etc., until you

know how they clearly have a

multinational dimension that is present

in several countries. There are also examples in the

clothing industry, from Reiner,

etc., and in every type of activity, there are

multinational companies.

Well,

let's continue then with what is

consumer regulation, and in this

case, in the manual that I indicated, we

go to page 273 and

following, which is the regulatory framework

for studying Law 17.250, the

consumer relations or

consumer protection law. I ask that you read it from the

original to be reading the

updated version. What is the purpose of this

law? What

the legislator intended is to protect the

consumer as the final recipient of

goods and services offered in the

market.

Article One establishes that it is

a law of public order. This

means that the parties They cannot deviate

from the provisions of this law, and it

establishes the application of the civil code as a subsidiary measure in

those aspects not

specifically regulated by the law.

Article

Two establishes a definition of

consumer: the consumer is defined as

the final recipient of goods or

services; this can be a natural person or

a legal entity. It clarifies that someone who

stores, keeps,

acquires, or uses goods or services to

integrate them into a production process is not a consumer. That is,

if I acquire a good that I

will later use as an input in the

production of a good or service, those

acquisitions are not considered

consumer goods.

For example, if I acquire flour to

later use and sell it

through a product that is usually made, for example,

a cake, that example

excludes the consumer. The definition

of producer is found in

Article Three: this refers to a subject who

professionally carries out

production, creation, supply,

transformation, assembly, or any other

activity that allows them to provide or

offer goods or services in the market.

As we can see, these are broad definitions that

try to encompass a wide spectrum of

subjects. Regarding

consumer rights, we have to

study Article 6, which lists

the basic

consumer rights and principles.

General guidelines that are

then developed in the color of the items

in particular, the law protects the health and

safety of the consumer by requiring

that all products that may

pose a risk to their health or

safety must be

marketed in accordance with the

established standards. Even if these standards are

reasonable, the

danger of these products must be disclosed, without prejudice

to the power of the

administrative authority to prohibit their sale

based on the severity of

the health risk that may be posed to

a consumer. This is

developed in articles 7 to 11 of the

law. I refer you to the media

regarding what has to do with

the offer; its regulation is found from

article 11 onwards of the

law, which establishes what

and what problems we

can find related to the

offer. What the law tries to do

is prevent abuses, for

example, if a discount is offered,

suppose you offer 50 percent off

the sale of handbags on Monday

morning, and if I go at noon

all the models

offered in that batch of 50 are already sold out. percent and

that other models are offered without the

discount. These attitudes and

actions are what the law, regarding the

offense, seeks to prevent.

Also, keep in mind that whoever offers what they have made is

obligated under the terms of their

offer until there is acceptance from the other

party. Until

that acceptance is made by the other

party, who expresses

the terms of the offer with feeling, they are not

obligated. For example, another of

the particularities or acts that are

intended to be avoided is that if an offer is

disseminated one day and no one takes notice, its duration should

be, for example, until the next

corresponding business day.

Another particularity and

emphasis that the law has is regarding

information. This is one of the

principles of the law and of the

consumer's rights to have information

that is detailed, clear, and understandable. This is

established from articles 14 and

17, which specifically stipulate that

the provider

of the good or service

offering must provide

information that is in

clear and easily legible Spanish about its

characteristics, nature,

quantity, quality, etc.

Article 14 also adds here all information,

including the The information disseminated through

advertising obligates the

offeror and forms part of the contract that

may be entered into with the

consumer.

Another aspect regulated by this law concerns

consumer protection in sales that occur

outside of a

commercial establishment. For example, when I

contract through someone who comes to my

house to offer me the product, or not

within the establishment, the law

establishes that in cases where

these contracts are entered into outside

of a commercial establishment, the

consumer who had not requested the

goods or services can withdraw

within five days of

receiving the sale.

This regulation was

recently modified in 2015 by Law

19.300, Article 248, which introduces the

obligation of the supplier to

clearly inform the consumer in writing and

in the contract itself of their right to

rescind or terminate the contract,

providing for penalties for non-

compliance. That is why I tell you it is

important that you read the law, because you

will find it with the

corresponding updates that

this regulatory body has undergone, in

case this

retroactive right of the consumer is exercised. What you must

do is return the item you

received in the condition in which it was

delivered, and you will be refunded the

price you paid for it.

There's a particularity to

this process:

if, for example, I receive a hairdryer,

open the box, use it once, and

return it within the

5-day return period, I can

expect a refund of the

price I paid, plus 15 cents for that

minimal use. However, I won't expect a

full refund. The

same applies if, for example, I

removed it from the box, even within the

same 5-day timeframe,

and it fell on the floor. When I return it,

for instance,

some plastic is missing or it's not in the

same condition. In that case, the

refund will be

based on the condition in which it was returned,

because that's

considered

consumer negligence. Therefore, the

refund amount can vary

depending on these circumstances.

Another particularity of

the consumer protection law is

that... Article 17 outlines

the information that must be

provided about products and what is included

in the labeling. For example,

Article 18 establishes that

manufacturers and importers must

ensure the availability of components and

spare parts as long as the

product is manufactured and imported, and

as long as the product remains on the

market. For instance, if a clothes dryer is involved,

the components for that

dryer must be available in case

a repair is needed

due to a malfunction from

use. Clearly, the components that

would allow for its repair must be available to the

consumer for the duration that the product

continues to be offered.

Another issue concerns

abusive practices, which the

law prohibits. These include

denying the provision of

goods or services to the consumer when they are

available,

circulating misleading information about the

consumer related to actions

taken by them in the exercise of

their rights, setting

disproportionate deadlines that are

detrimental to the

consumer,

avoiding the delivery of unsolicited products,

or conditioning

the supply of products or services

on the supply of other products or

services. These were all

added by the... Law 19.149, Article 144,

and it is within this framework that, among these

abusive practices, misleading advertising is also protected and

regulated.

Advertising itself is a

mechanism for seducing the public, and in

principle, it is understood to be entirely

positive. This is established in

Article 24:

advertising must be transmitted and

disseminated in a way that allows the consumer to

identify it as such, to

understand the information contained in

the advertising,

and to easily

distinguish the image as advertising

without generating confusion. Thus,

Article 24 prohibits

misleading advertising, establishing that it occurs when

any form of information or

communication contains

advertising messages that are wholly or

partially false, or in any other

way, including by omitting

essential data, capable of misleading

the consumer regarding the nature,

quantity, origin, and price of

products and services. In other countries,

what is also regulated is not

only misleading advertising but also

discriminatory advertising. Although

not precisely in our law, it is

understood that our constitution,

which regulates the equality

of persons before the law, would

also include it. Implicitly regulated is

discriminatory advertising based

on race, sex, religion, etc.

Another aspect

regulated within these

abusive practices is

adhesion contracts. These are contracts where the

clauses are predetermined by the

offeror. Another characteristic

is that the consumer loses the

possibility of negotiation. Not only is the

contract drafted unilaterally by

the offeror, who established

the clauses,

but the

consumer is left with no option but to

sign. They have no

possibility of specifying, for example, the

term of the contract.

This is seen in

banking contracts, such as when signing

a credit card; they sign and have no

possibility of discussion.

The

definition of these contracts is found

from Article 28 onwards, and

it is established as follows: an adhesion contract is one whose

clauses or conditions have been

unilaterally established by the

provider of products or services, regardless of whether

the consumer has been able to discuss,

negotiate, or substantially modify its

content. Article 24

adds that these contracts must be

written in Spanish, be clear, and have

the... The text is easily legible. One

of the things this law attempts to do is

eliminate the fine print, where

these abusive clauses are usually established.

Clearly, the aim

is to

eliminate these clauses that

create an imbalance

in the contract, to the clear detriment of the

consumer. Article 30 clarifies that the

abusiveness of the clauses does not refer to

the good or service, nor to the

consideration of the contract. In

principle,

when these clauses are

detailed by the legislator, it is done so

exhaustively, meaning they are

examples; it is not a classic list, that

is, it is not a

fixed number of clauses, but rather

other clauses may exist that are considered

abusive. What is the consequence

when, for example, I enter into a contract because I

genuinely want a service through

an adhesion contract, and

then the possibility arises that

this contract contains

abusive clauses, clearly detrimental to

me as a consumer? I can go to a

judge to request that they

verify the existence of

these abusive clauses, upon which

a large court can then rule. That is to

say, they are

enlightened by the contract and have the

power to supplement the conditions by

including new clauses, which can

happen, something more exceptional than

those abusive clauses, and when they later

detect them and declare their nullity, they have to

do precisely with the object

and the cause, and that could even lead to

not just a line of the

clauses but already a nullity of the

contract.

And another issue is everything

that has to do with the regulation

regarding breach and

liability for damages. From

article 33 onwards, you will find

everything that has to do with the

breach by the offeror or the

supplier of their obligations to act

in good faith and their duty to inform.

And this of acting in good faith and the duty to

inform is not only at the time of

contracting, but the law regulates from

the pre-contractual stage. From that stage

until the execution of the contract,

good faith and the duty to

inform must prevail. That is to say, it also covers

every day with the part of the force.

I have to behave in good faith, I have there

the duty to comply with informing

the consumer correctly as it should be.

These breaches what

can generate is the right The

consumer has the right to demand

specific performance if they still desire the

offered good or service, or to request

another product or service. They also have

the option to terminate or rescind

the contract, as appropriate, in all

cases, plus damages.

Articles 34 and 36 regulate the

supplier's liability for

damages caused by a defect or risk in the

good or service. There

is an expansion of this because it

establishes that the merchant or

distributor will only be liable

when the importer and manufacturer

cannot be identified, or when

the damage results from

inadequate storage, or when such storage

alters the

original condition. That is to say,

with respect to the merchant...

The distributor has a

direct liability when it

refers to the poor maintenance of the goods

that generates the defect and the risk, and another,

subsidiary liability arising from the actions of others, which occurs when

the importer or

manufacturer of the goods is unknown. It's

also important to note that

for these

liability claims, there is a statute of

limitations established in

Article 37. These

actions against suppliers, when

the product defect is apparent,

expire thirty days

from the date the goods or services were received,

or 90 days if they are durable goods. In the case

of a latent defect, the

evidence must

appear within six

months of the acquisition of the goods or

services, and the

claim expires three months after the defect is discovered. The

defect must appear within those six months, and once it appears,

three months are counted to initiate legal action. After

those three months, the right

to claim for damages

suffered by individuals expires four

years from the date of receipt. that the

plaintiff had or should have had

knowledge of the damage, defect, or flaw and

the identity of the manufacturer within a

maximum of ten years from when the

producer placed the product on the

market or the service ended. This

entire

consumer protection framework,

through consumer protection, has

consumer protection offices in

Montevideo, located in

Uruguay and Río Branco, if

memory serves. These are the powers

attributed to the General Directorate of

Commerce of the Ministry of Economy and

Finance.

This institution is responsible, according to

Article 42, for informing and advising

consumers, monitoring

compliance with

consumer protection provisions, promoting and

integrating advisory committees on the

matter, promoting the establishment of

consumer associations, summoning

suppliers to a

conciliation hearing at the consumer's request, and

issuing the necessary administrative acts

for the fulfillment of its

duties. You can access

the forms for

consumer complaints against

suppliers on the Consumer Protection Area website. This

conciliation hearing

has a particular feature:

if the supplier does not attend, it is... The

supplier's failure to appear is considered

a simple presumption against them,

meaning that the

consumer's allegations are presumed true. In the

event of a lawsuit, if the supplier appears and refuses to acknowledge the

claim, there are no

sanctions at the

conciliation stage. Instead,

a lawsuit is initiated through ordinary legal channels.

Therefore, this procedure does not

guarantee a positive outcome for the consumer.

In some

cases, the supplier may

accept

the claim and present a proposed

solution, offering

the consumer an option. However, this is not always the case.

Article 47 of the

law outlines sanctions applied

by the regulatory body

when there is a

breach of the

obligations imposed by law.

Furthermore, all the actions

that consumers can take through ordinary legal channels are subject to penalties.

Often,

the other party is a large company

that will not appear, and sometimes the amounts involved

in the claims are very small. Therefore,

initiating a lawsuit becomes somewhat

controversial due to the associated costs. The

possibility of

holding small claims trials

precisely because of the amount in controversy.

Now we will continue with what

has to do with unfair competition

within the framework of competition law.

The law you need to be studying

is 18.159. The purpose of this law, while

on the one hand it is to legitimize the

defense of competition, which we will

see next, the other purpose of this

law is precisely to

sanction competitors who

use illicit means to compete in

the market, harming the competition.

The aim of this law is to

produce a deviation from competition

using unfair means that are

classified as illicit. In

this sense, we are going to see

precisely what those elements are that must be

configured simultaneously to understand

that what is happening is occurring.