BRAZIL Law and Practice Contributed by: Lucia Ancona Lopez de Magalhães Dias, Maria Fernanda Saab Nersessian and Camila Emi Tomimatsu, Magalhães e Dias
The penalty provided for in the LGPD is a fine amount - ing to 2% of the relevant company’s turnover (limited to BRL50 million). Furthermore, among other sanc - tions, the law also states that any infringement may be subject to publication after its assessment and verification. 6.6 Other Rules Apart from the general rules for consumer protection set forth in the CDC, the LGPD and the Civil Rights Framework for the Internet, the Brazilian Federal Con - stitution also provides for the general right to privacy (thus not limited to advertising), ensuring the right to compensation for material or moral damage resulting from its violation (Article 5 (X)). 7. Sweepstakes and Other Consumer Promotions 7.1 Sweepstakes and Contests Under Law 5768/71 and Decree 70951/72, any plan for the free distribution of prizes as a form of adver - tising that involves luck must be submitted for prior approval of the competent government agency. Cur - rently, this approval is centralised in the Secretariat of Prizes and Betting ( Secretaria de Prêmios e Apostas SPA) of the Ministry of Finance. Several types of commercial promotion are subject to registration, including: • raffles where the consumer meets a certain require - ment (eg, the purchase of products), receives a “lucky number” (which is randomly, equitably and concurrently assigned) and can win as per the results of the federal lottery; • contests where the winner is defined based on performance (eg, submitting the “best” photo/ video) and competitions of any nature (eg, where the winner is the first person to buy a particular product); and • gift certificates where the reward is instantaneous. Recently, Ordinance 7,638/2022, issued by the Secre - tariat for Economic Monitoring ( Secretaria de Acom‑ panhamento Econômico SEAE), provided additional rules on the free distribution of prizes for advertising
purposes through a draw, gift certificate, contest or similar modality, as referred to in Law 5,768/1971 and Decree 70,951/1972. 7.2 Contests of Skill and Games of Chance Brazilian laws distinguish between contests of skill and games of chance. Whenever luck is involved, the company must secure prior authorisation. An excep - tion to this rule is the exclusively cultural, artistic, sporting or recreational contest, insofar as it does not involve any type of risk, require payment from com - petitors/participants or bind such competitors/par - ticipants (or the winners) to the acquisition or use of any good, right or service. Such contests are intended only to reward artistic or sporting talent – or simply to serve as leisure activities with no commercial con - notations. 7.3 Registration and Approval Requirements Promotions that involve luck (raffles, gift certificates, contests or similar schemes) must be authorised a priori by the SPA. There are extensive mandatory doc - umentation and accountability requirements. In brief: • authorisation must be procured online at least 120 days before the promotion starts; • an inspection fee must be collected, the amount of which varies according to the value of the promo - tional prizes; • after the commercial promotion ends, the company must report to the SPA within 30 days after deliver - ing all prizes or collecting the amount correspond - ing to prizes that were not delivered, if applicable; and • once the accountability report is approved, the pro - cedure is shelved. 7.4 Free and Reduced-Price Offers Free offers like “buy one, get one free” are covered in Informative Note 11/2018, which establishes the basis under which prior registration of the promotion is mandatory. 7.5 Automatic Renewal/Continuous Service Offers The CDC (Article 39 (III)) establishes that sending or delivering products, or providing services, to con - sumers without prior consent is an abusive practice.
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