E-commerce has significantly grown in Mexico over the last years. According to Statista Research Department, purchase and sale of products online reached $14,500.00 million US Dollars in 2019. Mexico is the most important e-commerce market in Latin America after Brazil.1
On the other hand, because of Covid-19 Pandemic lockdown, online ordering increased substantially as compared to 2019, reaching a value of $316,000.00 million Mexican pesos.2
Consumers want to have the certainty that they buy online safely, and that online suppliers not only do comply with the law, but also they are reachable in case consumers want to exert rights derived from their purchases; such as return of products if they do not match the specifications offered, attend and solve complaints and claims, or ask for product guarantees, just to mention a few examples.
Therefore, the Consumer Protection Agency (“PROFECO”) published in February of this year an Order to announce guidelines to apply for, use and register the PROFECO Digital Badge (the “Badge”).
According to the above-mentioned Order, the Badge is a benefit for online suppliers that (i) follow the law, (ii) respect human rights of consumers, responsible electronic advertising and good commercial practices in e-commerce.
Which are the main characteristics of, and requirements to obtain the Badge? What are the benefits for consumers? What is the utility for online suppliers? Which are the terms to obtain the Badge?
Those answers are developed as follows:
1. The Badge is the official acknowledgement that the Mexican government grants to online suppliers that promote and guarantee safety, transparency, confidentiality, and reliability to consumers in their purchases.
2. However, such an acknowledgment is not granted indefinitely, but must be renewed periodically, as described further below.
3. The purpose of the Badge is building trust in consumers, who may expect that their online purchases are made safely.
4. The PROFECO will establish a register of responsible suppliers in e-commerce, to promote those suppliers that receive the Badge. The register will be public and updated every six months.
5. Suppliers who receive the Badge will be disseminated through official social media channels.
6. Within the most important requirements for online suppliers to obtain the Badge, besides filing a form and paying applicable tariffs, are as follows:
i. Complying with the law and submit themselves to Official Standard NMX-COE-001-SCFI-2018 (E-commerce-Provisions to which those suppliers who offer, commercialize, or sell goods, products or services shall be subject to).3
ii. Creating, keeping and boosting commercial practices that are not abusive, coercive, unfair, misleading that harm consumers.
iii. Creating and disseminating advertising, which is clear, truthful and verifiable, as well as implementing efficient ways to attend and satisfy consumers’ complaints and claims.
iv. 1 year of seniority after having been registered with the Treasury Department.
v. Not having payment debts for fines imposed by PROFECO.
vi. Having been registered with Mexican Business Information System (SIEM) of the Economy Department, and with the National Tourism Register, if applicable.
vii. Adopting the Ethical Code implemented by the PROFECO or submitting an internal ethical code that shall be aligned with similar standards to those of the PROFECO.4
7. To obtain the Badge, the PROFECO will publish a call every six months that will be open during 15 calendar days.5
8. The Badge may be renewed on a yearly basis, prior verification of the PROFECO with the above-mentioned requirements, and the proper use of the Badge.
9. During the term of the Badge, the PROFECO may watch over suppliers’ websites to check they comply with the above points.
10. The Badge may be cancelled, among other items, if suppliers (i) fail to comply with the guidelines, (ii) submit false documents to obtain the Badge, or (iii) do not inform the PROFECO on any change in its domicile, or corporate name.
Final Remarks
Although the Badge may grant an official acknowledgment by the Mexican government to those suppliers that comply with online consumer protection laws, the said Badge is not mandatory for suppliers to sell online.
Online suppliers that start to offer their products or services shall waits a year after their registration with the Federal Taxpayer Registry to apply for obtaining the Badge, as well as comply with requirements that are optional for other suppliers. For example, adopting an Ethical code and register their standard-form agreement with the PROFECO.
As described above, there are many advantages for those suppliers who obtain the Badge. However, they must adopt best corporate practices, and be in compliance with the tax, commercial and consumer protection laws.
By José Antonio Cervantes.
Sources:
1. https://es.statista.com/temas/6370/el-comercio-electronico-en-mexico
2. https://www.forbes.com.mx/negocios-crecimiento-81-ecommerce-mexico-docuserie-panorama/
3. https://www.linkedin.com/pulse/12-obligations-online-sellers-must-meet-mexico-cervantes-acosta/
4. https://www.dof.gob.mx/nota_detalle.php?codigo=5612350&fecha=26/02/2021
5. https://www.gob.mx/profeco/prensa/lanza-profeco-convocatoria-a-proveedores-para-obtener-distintivo-digital?idiom=es
This note is for information purposes only. It does not offer legal advice and should not be used as a substitute for proper legal advice. The note reflects the views and opinions of the authors only who bear no responsibilities for any inaccuracies, errors, omissions, and statements.
