The Law for the Transparency, Prevention and Combating of Undue Advertising Practices was published in the Federal Register on 3rd June 2021 and will come into force 90 days following its publication.
The new rules will regulate the advertising sector, aiming to make it more transparent with better practices, combating any behaviour that may result in an unfair advantage in favour of certain entities to the detriment of other advertisers and consumers. The contracts, agreements, acts, and procedures which are currently officiated by advertisers, agencies, and media themselves must now adhere to said regulations.
Some of the most key factors established by the new law are:
It is applicable to every advert shown in the national territory by an advertiser residing in Mexico, regardless of where the media agency is established.
Advertising slots can only be acquired by agencies on behalf of and for one advertiser, they cannot be acquired by the agency for resale purposes.
The agency and the advertiser must establish an agreement specifying the fee payment conditions. The payment must correspond to the monetary compensation established in the agreement. It is hereby prohibited that the agency, and the intermediaries it uses, receive payments in kind from the broadcaster.
Any discount granted by the broadcaster to the agency must be transferred in full to the advertiser. The latter also has the right to fully control the advertising campaign.
Any agency offering services to advertisers cannot also offer services to broadcasters at the same time. In any case, the services provided to broadcaster must be through a person belonging to the same business group as the agency but belonging to a different entity.
Sales invoices for advertising slots must be sent directly to the advertiser, even if the agency makes the payment on their behalf. This invoice must include information including the dates and places broadcast, the advertising slots used, and their format, and the unit value for each advertising slot, including any discounts granted, if applicable.
The agency must inform the advertiser in writing of any financial relationships it has (or those of the business group which it is part of) with the broadcaster or broadcasters that it hopes to work with.
When the advertiser is a public entity, without prejudice of the provisions of this Law, the criteria, principles, and provisions foreseen in the General Social Communication law and other related regulations must be taken into account.
Any violation of these regulations can result in penalties of 2-4% of revenue, depending on the severity. In the cases of repeated violations the penalties can be up to double those values mentioned above.