Mexico: New regulations, authorities and procedures for Verifying Regulated Products and Activities

Among the several amendments and issuance of new laws in different areas published on July 16 in the Federal Official Gazette (DOF), some of them involve other issues related to new technologies and communications from different perspectives.

In this regard, the new Telecommunications and Broadcasting Law (LMTR) repeals the previous Federal Telecommunications and Broadcasting Law.

The new Law has a technical approach with respect to the form and terms in which concessions and authorizations may be granted to carry out activities of exploitation and rendering of telecommunications services.

However, it also covers several concepts that were previously not regulated or were less precisely regulated due to the development of new technologies in this area.

The advertising of highly regulated products has been one of the priorities for the last administrations, which at times was complex due to the lack of a clear regulatory framework on the concept and scope of different media and information technologies.

Among the most relevant advertising-related definitions contained in the new Law are:

1. Audiences: Individuals holding rights who perceive and consume audio or audiovisual content provided through the Broadcasting Service and the Restricted Television and Audio Service, as applicable;
2. Internet: A decentralized set of telecommunications networks worldwide, interconnected and providing various communication services. It uses internationally coordinated protocols and addressing systems for routing and processing data packets for each service. These ensure that the physical networks comprising the Internet operate as a single logical network;
3. Commercial Message: Mention directed to the public or to a segment during a program break, with the purpose of informing about the existence or characteristics of a product, service or activity to induce its commercialization and sale, in broadcasting stations with commercial concession and restricted television and audio channels. The commercial message does not include the station's or channel's own promotions, nor the transmissions corresponding to State time, and others at the disposal of the Executive Branch, nor programs offering products and services;
4. Sponsorship: A cash or in-kind payment made by any individual or entity to allow the mention or visual display of their name, corporate name, brand, or logo;
5. Digital Platform: A digital service provided by intermediaries through the Internet in order to, among others, offer, provide, commercialize or intermediate goods, services, applications, products or contents;
6. Restricted Television and Audio Service: An audio or audio-visual telecommunications service provided to subscribers through public telecommunications networks, under contract and for a pre-established periodic fee.

These new definitions provide an important regulatory framework that enables a harmonious interpretation of other provisions that in one way or another include references or obligations to these means of telecommunication.

Among these are laws such as the General Health Law and its Regulations, the Federal Consumer Protection Law, the General Law for Tobacco Control, and other.

Many of these legal provisions reference the sale or advertising of certain products through “Internet,” “digital platforms,” and similar channels, which until the new LMTR, were not clearly regulated.

The LMTR also introduces several provisions regarding the jurisdiction of federal authorities over the acts and services it regulates. It identifies as the main authorities for interpreting and enforcing the LMTR the Telecommunications Regulatory Commission (the Commission) and the Digital Transformation and Telecommunications Agency (the Agency).

The Commission will be responsible for regulating, promoting, and overseeing the use, exploitation, and management of the radio spectrum, orbital resources, satellite communication, space services and applications, spatial sustainability, public telecommunications networks, passive infrastructure services, and the provision of broadcasting and telecommunications services, as well as access to active and passive infrastructure and other essential inputs.

The Commission will also issue general administrative provisions for the efficient development of telecommunications and broadcasting, including Mexican Official Standards and technical guidelines on infrastructure and equipment connected to telecommunications networks, as well as conformity assessment and homologation.

Key powers of the Commission include:

1. Requesting all types of information and documents, including those generated electronically, related to its jurisdiction;
2. Imposing punishments for violations of legal, regulatory, or administrative provisions, or noncompliance with terms of concessions, authorizations, licenses, or the Commission’s rulings, measures, guidelines, or resolutions. It may also issue precautionary measures and declare, if applicable, the forfeiture of assets, facilities, and equipment in favor of the Nation;
3. Overseeing compliance with the guidelines on audience rights issued by it and, if applicable, to punish non-compliance, in accordance with the law;
4. To supervise that the programming aimed at the child population complies with health standards and the guidelines that regulate advertising in programming aimed at children, based on the regulatory provisions issued by the competent authorities;
5. Ordering the precautionary suspension of transmissions that violate the standards set forth in the Law;
6. Inform the Ministry of Health and the Ministry of Government (SEGOB) the results of the supervisions carried out so that they may exercise their sanctioning powers.

The LMTR also grants authority to other government agencies, including educational, cultural, health-related entities, and the SEGOB, particularly in matters related to advertising, such as promotions, contests and similar activities.

Key powers granted to SEGOB include:

1. Authorizing and supervising the broadcasting or promotion of contests offering prizes in different modalities and stages, to protect the good faith of the contestants and the public, as well as to sanction non-compliance within the scope of its jurisdiction;
2. Verifying that radio and TV broadcasts comply with classification criteria, including those applicable to programming directed at children, per issued guidelines;
3. Imposing sanctions for non-compliance with the guidelines that regulate programming and advertising aimed at the child audience;
4. Establishing specific guidelines to regulate advertising aimed at child audience.

The LMTR also grants specific powers to health authorities, including:

1. Authorizing the broadcasting of advertising related to medical practice and related activities;
2. Promoting, in coordination with the Agency, the use of information and communication technologies in the health sector;
3. Authorizing the advertising of dietary supplements, biotech products, alcoholic beverages, medicines, herbal remedies, medical equipment, prosthetics, orthotics, assistive devices, diagnostic agents, dental supplies, surgical materials, pesticides, plant nutrients, and toxic or hazardous substances, among others. The Ministry of Health may issue general provisions regarding the advertising of such products, without prejudice to SEGOB’s authority over content;
4. Setting health-related standards for programming aimed at children;
5. Based on the results of the supervision carried out by the Commission, to impose sanctions for the non-compliance of the standards that regulate the programming and advertising directed to the child audience.

The LMTR introduces general restrictions for advertising in telecommunications media aimed at children, prohibiting content that:

1. Promotes, or shows illegal, violent or life-threatening behavior or physical integrity, either through real or animated characters;
2. Shows or encourages behaviors or products harmful to physical or emotional health;
3. Represent children or teenagers as sexual objects;
4. Based on their inexperience or immaturity to persuade them of the benefits of a product or service, exaggerate the properties or qualities of a product or service or generate false expectations of its benefits;
5. Directly incites purchase or contracting of products or services;
6. Promotes gender inequality or any form of discrimination;
7. Present or promotes bullying, intimidation, or any conduct that may lead to sexual or other forms of abuse;
8. Contains subliminal or hidden messaging.

It is clear that there is an increase in the number of authorities that will be able to interfere in advertising issues for regulated products, and, in particular, for those that in one way or another may be considered to be intended for children.

It is important to highlight that, in these cases, the imposition of sanctions and in general, the subjects regulated by the LMTR are the concessionaires and licensees of the media, but not the advertisers or those responsible for the products and services that use such media for advertising purposes.

In this way, the possibility for advertisers to carry out advertising campaigns, advertisements or advertising guidelines is closed by sanctioning the media that fail to comply with the regulations applicable to this type of products.

The Law also introduces general advertising requirements, including a ban on transmitting information disguised as journalistic or news content; the use of visuals or audio indicating advertising for goods/services unavailable in Mexico; and requirements to clearly distinguish advertising from regular programming.

This type of broad restrictions opens the door for the criteria of interpretation of contents by the authorities to be left open and lend themselves to censorship or limitation of certain types of information.

Finally, that the sanctions applicable to concessionaires or permit holders for violation of advertising regulations may range from a fine, suspension of activities, immobilization of equipment and activities, to revocation of the respective concession or authorization.

Contrary to many provisions regarding the means of defense against resolutions of the authorities, in the specific case of resolutions issued by the Commission, only the “Amparo trial” is applicable as a means of defense, which is a means of constitutional control over resolutions of the authorities, thus depriving the governed of the possibility of filing administrative appeals or administrative contentious trials.

This provision is poorly worded and could lead to legal uncertainty and due process violations, particularly for those affected by unfavorable resolutions or sanctions from the aforementioned authorities.

It may also contravene international treaties concerning access to justice, investment protection, and free trade.