Decision on Consumer Protection fine gets partially confirmed by Argentine Administrative Courts
By Mariano Peruzzotti and Florencia Bossero
On February 8, 2024, the Federal Court of Appeals in Administrative Matters partially confirmed the decision made by the National Direction of Consumer Protection and Consumer Arbitration, while also reducing a fine imposed on the company ”PEDIDOS YA S.A.” for violations of the Consumer Protection Regime.
By means of provision 635/22, the National Director of Consumer Protection and Consumer Arbitration had imposed PEDIDOS YA S.A. (“Pedidos Ya”) a fine of Argentine Pesos 1,000,000 (approximately USD 1,171 at the exchange rate of March 27, 2024) for committing the following infringements to the following provisions of the Consumer Protection Regime:
- Not including the direct access link to the “Withdrawal Button” on the website;
- Including an abusive clause regarding jurisdiction in the Terms and Conditions;
- Not including the following information in the relevant app: Full name of the company, e-mail address, customer service phone number, Fax number, and email;
- Not including an identification in the relevant tax and/or commercial records;
- Not including a link to the Consumer Protection Legislation and the National Enforcement Agency;
- Not including the link to the complaint form of the “Federal Single Window for Claims”;
- Not complying with the duty of information. Consumers were informed that they would receive a refund upon cancellation, but the company never processed such refunds, despite repeated complaints; and
- Not providing a proper service.
Against this decision, Pedidos Ya filed an appeal before the Court of Appeals in Administrative Matters. The Court partially confirmed the decision of the National Direction of Consumer Protection and Consumer Arbitration on the basis of the following arguments:
- The company failed to comply with Resolution 424/2020, which regulates Article 34 of Law 24,420 (“Consumer Protection Act”), as the proceeding to exercise the withdrawal right did not meet the conditions imposed thereto. As for the use of similar legends, the Court considers that the required formality does not constitute an excessive strictness on the part of the administrative authority, but rather contributes to the uniformity and quick identification of the client, who is in a disadvantaged situation compared to the offeror.
- The appellant failed to demonstrate that the clause related to the unilateral determination of jurisdiction provided in the “Terms and Conditions” of “Pedidos Ya Pay” and “Virtual Wallet” was complementary to the general terms and conditions, as it explicitly states disputes would be resolved in Buenos Aires courts;
- The Court confirmed the need of informing consumers about Pedidos Ya´s contact information, as well as the possibility of having access to “human” personnel in order to facilitate the filing of complaints;
- The individualization of the company’s tax identification number cannot be made by means of a quick response code – “QR”.
- The obligation to include a link the Federal Single Windowcomplaint form was not fulfilled.
- The Court stated that Pedidos Ya engaged in an abusive practice in the terms of article 37 of Law 24.240 by not providing any solution to the users’ complaint.
Notwithstanding the above and considering that Pedidos Ya had not been previously sanctioned for infringements to the Consumer Protection Act, the Court of Appeals reduced the amount of the fine to Argentine Pesos 500,000 (approximately USD 583), namely the half of the original amount.
For further information please contact mperuzzotti@ojambf.com or fbossero@ojambf.com
