Brief Overview of the Normative Landscape

The adoption of the Constitution of 1988, which re-established democracy following the military dictatorship in Brazil, and the enactment of the Consumer Protection Code in 1990, set important limits to advertising.

The Constitution establishes freedom of expression as a fundamental right, protecting the free expression of thoughts (article 5, IV) and of intellectual, artistic, scientific and communications activities regardless of censorship or licensing (article 5, IX). Regarding advertisement, the Constitution lays the foundation for its restriction by establishing that “it is within the competence of federal law to: (…) establish legal means which afford persons and families the possibility of defending themselves against (…) the advertising of products, practices, and services which may be harmful to health or to the environment” (article 220, § 3, II). More specifically, it states that “the advertising of tobacco, alcoholic beverages, pesticides, medicines and therapies shall be subject to legal restrictions (…) and shall contain, whenever necessary, a warning concerning the damages which may be caused by their use” (article 220, §4). ⁸

Law No. 9.294 in 1996 fleshed out the constitutional provision on advertising. In particular, it defined the time period when the advertisement of alcoholic beverages and tobacco could be aired in radio and television, as well as set rules on the creation of an advertising piece, including, for example, restrictions on associating cigarettes and alcoholic beverages with sports and suggesting that tobacco products have calming or stimulating properties. ⁹ In 2011, this law underwent an important reform that prohibited “the commercial advertising of cigarettes, cigarillos, cigars, pipes or any other smoking product, derived from tobacco or not.” ¹⁰ To date, however, no specific federal law has yet implemented article 220, §3, II of the Constitution, and thereby given “persons and families the possibility of defending themselves against (…) the advertising of products, practices and services which may be harmful to health or to the environment.”

The Consumer Protection Code also contains important provisions related to advertising, especially the prohibition of “all misleading or abusive advertisement” (article 37). ¹¹ In order for advertisement to be considered misleading, the information conveyed needs to be fully or partially false or withhold essential information, inducing consumers to make a mistake.Reference Marques and Marques ¹² In turn, abusive advertising is essentially anti-ethical advertising that preys upon consumers’ vulnerability and goes against basic social values, harming society as a whole.Reference Marques and Marques ¹³ The general ban on misleading and abusive advertising has been particularly relevant in the context of unhealthy food and beverages due to the fact that, unlike tobacco and alcohol, there is no specific federal law restricting their advertising. ¹⁴ However, as institutional communications by the STJ itself show, the limits of advertising in relation to consumer protection are not always clear, leading to constant disputes that need to be resolved. ¹⁵

Confronting Limitations in Dispute Resolution

The prevailing model of dispute resolution has long centered on CONAR, ¹⁶ charged with applying the Brazilian Self-Regulation Advertising Code. ¹⁷ This model was adopted in the mid-1970s in a context of mistrust of government agencies — particularly in relation to limitations to free speech — during the military dictatorship (1964-1985). ¹⁸

To this day, the self-regulatory model is in force and provides that complaints against misleading or abusive advertising must be assessed by CONAR’s Council of Ethics. The Council of Ethics conducts this assessment when prompted, necessarily after the circulation of the advertising piece in question. If the advertising piece is considered not to have violated the rules of the Brazilian Self-Regulation Advertising Code, the Council of Ethics can dismiss the complaint. If the advertising piece is instead considered to have violated those rules, the Council of Ethics can recommend the suspension or modification of the advertising piece, or issue a mere warning to the advertisers behind it. Notably, it cannot issue fines to the advertisers, although in any case fines could fall short of disincentivizing companies from airing ads that are expected to be highly profitable. ¹⁹

Self-regulation by CONAR presents considerable problems of both procedural and substantive nature. On the procedural side, CONAR’s governance rules clearly favor advertisers over consumers, consumer associations and consumer protection entities. ²⁰ For instance, despite governance rules setting aside space in the Council of Ethics for civil society representatives, the selection of such representatives is done by CONAR’s Superior Council, which is in turn made up by representatives of CONAR’s founding members, who are all connected to the advertising industry. ²¹ Finally, the volume of cases considered by CONAR is arguably small in a country of continental proportions with massive investment in advertising: ²² according to data found on CONAR’s website, the average is 236 cases per year. ²³

On the substantive side, CONAR openly frames its mission in defense of free commercial speech; including the “promot[ion of] free speech in advertising and [the] defen[se of] the constitutional prerogatives of… advertising.” ²⁴ This sets the tone of their reasoning in decision-making. For example, in 2011 CONAR dismissed a complaint by Alana, a non-governmental organization, about a McDonald’s ad exhibited during the trailer of animated film “Rio.” ²⁵ In the decision, the rapporteur of the case portrayed Alana as a witch who hates children, stating that “[w]hen the witch Alana comes into scene, children live on bread and water… [N]o more cheeseburgers, fries, milkshake or soda.” They went on to frame the complaint as part of a broader strategy of demonizing advertising to ideologically control children. ²⁶ In response, Alana said it no longer recognized CONAR as a serious entity to safeguard ethics in advertising due to the open mockery displayed in this decision. ²⁷

The judiciary can also exert control over advertising to the extent that it potentially violates relevant laws and regulations, including the Consumer Protection Code. For example, at the state level, the court of appeals of São Paulo ruled that McDonald’s engaged in abusive and therefore unlawful advertising to children by holding Ronald McDonald concerts — which they framed as educational — in nurseries and primary schools, both public and private. The lawsuit had been filed by the Public Defender’s Office in São Paulo, following reports to government entities. ²⁸

At the national level, two decisions issued by judges in the STJ are especially relevant. In March 2016, the 2nd Chamber upheld the conviction of a food company for the “Time for Shrek” marketing campaign, which targeted children by using the well-known animated character. Upon the purchase of five cookies of the brand, plus a payment of R$ 5.00, the consumer could receive a Shrek watch. The judges in the STJ found that the marketing campaign was abusive because it aimed, directly or indirectly, at children, in addition to other arguments. ²⁹ In April 2017, the 2nd Chamber of the STJ considered a similar advertising campaign, known as “Sadia Mascots.” Upon the purchase of five products of the same brand, plus a payment of R$ 3.00, the consumer could receive a collectible stuffed animal, the company mascot. Though the product here — frozen food — was meant for an adult audience, the judges concluded that the kind of prize indicated that the marketing campaign targeted children and was therefore abusive and unlawful. ³⁰

These are landmark decisions for consumer protection, but ultimately their legal effects are limited to the concrete cases considered, meaning that despite their persuasive power they may or may not be followed by the other judges adjudicating over similar cases across the country. ³¹ The food and beverage industry has already taken advantage of this characteristic of the legal system in Brazil. For example, when the National Agency of Health Surveillance issued Resolution 24 in 2010 — a binding normative act of lower rank than legislation — restricting the advertisement of unhealthy food and beverages, multiple associations from the private sector questioned it in court, filing diffuse actions across different jurisdictions that led to conflicting decisions. The issue is yet to be definitively resolved by high courts. ³²

Taking advertising to children as an example again, the fact that the industry continues to push the legal narrative that it is not necessarily abusive ³³ — irrespective of these recent rulings by judges in the STJ — signals that they are likely to continue such practices. The situation is ever more complex in the context of unhealthy food and beverages, in the absence of specific federal laws limiting advertising. In the end, the broader the legislation, such as general bans on misleading and abusive advertising, the greater the leeway for decision-makers across the judiciary to ascertain their sometimes-conflicting views.

Considering Emerging Opportunities for the Limitation of Commercial Speech

Attempts to adopt specific federal laws regulating the advertisement of unhealthy food and beverages have not yet been successful in Brazil, despite the introduction of several bills in Congress that moved past the general prohibition of misleading and abusive advertising. ³⁴ In general, these initiatives tend to face strong resistance from both the advertising industry and the food and beverage industry, who have argued in the past that such limitation violates freedom of commercial speech among other arguments. ³⁵

In March 2021, the Supreme Federal Tribunal (hereinafter STF) — the highest constitutional court in Brazil — upheld State Law No. 13.582 of 2016, as amended by State Law No. 14.045 of 2018, which prohibits commercial communication to children in primary schools in the state of Bahia. ³⁶ State Law No. 14.045 significantly altered the content of State Law No. 13.582. Before the reform, Law No. 13.582 prohibited the advertisement of unhealthy food and beverages aimed at children on radio and television at certain times, as well as in schools at all times. Since the reform, Law No. 13.582 prohibits not only the advertisement of unhealthy food and beverages, but all commercial communication to children, though this prohibition is now limited to primary schools. ³⁷

The constitutionality of this law was questioned in the STF by the Association of Radio and Television Networks, based in part on the alleged violation of the freedom of commercial speech. In the ruling, the judges indicated that advertising “instrumentalizes free enterprise under commercial speech,” ³⁸ and unanimously held that (i) commercial speech is included in freedom of speech; (ii) freedom of speech is not absolute and can therefore be subject to restrictions; and (iii) restrictions must be proportionate. Though the decision did not lay out a detailed roadmap for the assessment of proportionality, it did list some factors that had shaped their analysis, namely the scope of the ban (commercial communication to children, primary schools). However, the judges did not analyze the nature of commercial speech in detail; for example, whether the protection granted to commercial speech rises to the same level of non-commercial speech. ³⁹

The STF also touched upon other relevant points. Importantly, it clarified that the advertising restrictions listed in the Constitution under article 220, §4º are not exhaustive, but rather constitute a list of examples. In other words, by enumerating tobacco, alcoholic beverages, pesticides, medicines and therapies, the Constitution merely illustrated one possible pathway to the restriction of the freedom of commercial speech, in order to promote or protect other fundamental rights, including health — framed not only as an individual’s right, but also as the State’s duty, and one of utmost priority. In particular, the STF stressed the role of government in leading the control of unhealthy food and beverage advertising, relying on recommendations issued by the World Health Organization. ⁴⁰ This indicates that health considerations can be paramount in the analysis of advertising restrictions.

Overall, this decision paves the way for other states to pass legislation restricting commercial communication in primary schools, given that it weakens probable legal arguments grounded on the freedom of commercial speech, provided that the measures restricting advertising — including that of unhealthy food and beverages — are proportionate. Most importantly, even if at the state level, laws like the one in Bahia are relevant because they move the needle from more general to more specific regulation of advertising, leaving less (though far from non-existent) room for interpretation in a context of potentially widespread litigation, as described above.