INDECOPI has established a criterion of interpretation regarding the prohibition of disseminating misleading advertising material referring to promotional prices or discounts, in accordance with the provisions of Legislative Decree No. 1044 (“Law on Repression of Unfair Competition“). In order not to be identified as performing an ‘act of deception’ in advertising promotional prices or discounts, the following must be observed:
- When a company wishes to disseminate advertising on a promotion consisting of a discount on the price or equivalent modality, this must be exceptional and temporary.
- The promotional offer to be advertised must be calculated according to the ordinary offer of the product or service.
- The value of the ordinary offer is determined by identifying and comparing the conditions of the promotion with the conditions (especially the price) in which the concerned product or service is usually offered.
For example, if a specific promotional discount is offered, this discount should be applied to the price at which the product is normally sold and not to a higher price.
This criterion constitutes a precedent of mandatory observance and has been approved by Resolution No. 186-2021/CCD-INDECOPI, published on 19 January 2022.
The Law on Repression of Unfair Competition established that ‘misleading advertising’ is one that disseminates information that can mislead recipients (as consumers) on the characteristics, quality, quantity, price, and other attributes of the goods and services offered. Acts of deception can be punished with fines of up to 700 tax units, provided they do not exceed 10% of the gross revenue.
You can find the resolution here.
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