On March 11^th, 2019, the Procon-SP Ordinance No. 55/2019 was published, in place of Ordinance No. 45/2015, in order to establish the general rules on the proceeding for administrative sanction.

Among the main changes of this Ordinance, those referring to the determination of the penalty fines to be applied in administrative proceedings stands out. While the Ordinance No. 45/2015 established the use of the revenue of the notified subsidiary, the new Ordinance indicates that the revenue to be considered for the determination of the penalty fine will be the “monthly average of gross revenue”, which will allow the use of the company’s overall revenue, and not just of the notified subsidiary.

The use of the supplier’s overall revenue for determining the penalty fine appears to be a trend among state sanctioning administrative bodies. In this sense, Procon/MG also recently changed its general rules regarding proceedings for administrative sanction, through Ordinance PJG No. 14/2019. The difference is that the Procon/MG Ordinance determines the use of overall revenue in determining the fine only when dealing with a corporation.

These changes can have a major impact on penalties to be applied by state sanctioning.

Decolar, a company that seeks flying tickets, accommodation and travel packages, was fined by Procon/SP in BRL 1.1 million for violating articles 39 and 51 of the Consumer Defense Code.

According to the state administrative body, the company would have varied the price charged for the services according to the location of the acquiring consumer. In this sense, different prices for the same service would have been detected for consumers in Brazil, Argentina and Mexico. In addition, the contractual clause that exempt for the provision and quality of the contracted services, because it would just be an intermediary in providing those services, should be declared null.

According to Procon/SP, it would not be possible to specify the number of consumers affected by the practice. However, the application of the fine “considered that the practice affects any consumer who seeks the company’s services”.

Decolar said it has never carried out abusive practices for its consumers and that it will appeal.

On December 30^th, 2019, the Department of Consumer Protection and Defense (“DPDC”), entity associated to the National Secretary of Consumer (“SENACON”), Ministry of Justice, imposed a BRL 6.6 million fine on Facebook due to improper use of data of approximately 443 thousand of Brazilian users.

DPDC installed the investigation against Facebook Inc. and Facebook Serviços Online do Brasil Ltda. in April 2018 after media reports about the case “Cambridge Analytica”.

DPDC concluded that Facebook improperly made available users’ data to the developers of an App called “thisisyourdigitallife”. The entity identified abusive practices against the consumer collectivity as Facebook did not provide consumers with clear and adequate information in relation to its privacy policy, as well as did not provide satisfactory custody of the users’ data according to its business model.

DPDC considered that Facebook adopted an automatic and generic model to share its users data, based in an opt-out mechanism (instead of opt-in) to obtain the users consent. As this mechanism did not specify the purpose of the data sharing, DPDC stated that it infringes the Brazilian Civil Rights Framework for the Internet (Marco Civil da Internet). In addition, the entity understood that Facebook failed “in adequately inform its users about the implications of standard privacy settings at the time of the facts”, especially about the sharing of data of “friends” and “friends of friends” with developers of applications.

On November 5^th, 2019, the Third Panel of the Superior Court of Justice (“STJ”) judged the Special Appeal (“Resp”) No. 1,785,783-GO, which rekindles the discussion over the arbitrability of consumer disputes.

Through the ruling, Justice Nancy Andrighi highlighted the possibility of later consensus by the parties to opt for arbitration. The STJ’s understanding is that article 51, item VII, of the Consumer Defense Code only prohibits arbitral clauses in consumer contracts signed prior to the arbitral proceeding. However, considering article 4, paragraph 2, of the Brazilian Arbitration Act, the consumer may express its willingness to submit the dispute to arbitration after the signing of the adhesion contract, provided that it is done by means of a written and signed document.

In this case, the STJ understood that the existence of an arbitration clause in an adhesion contract on the same signature page of that contract was not sufficient to guarantee its validity and effectiveness without a signature specially affixed to that clause. However, considering that in the case under trial the consumer was the one who initiated the arbitration proceeding, with an evident manifestation of her willingness to submit to the alternative dispute resolution method, the arbitral proceeding was ruled as valid.

Click here to read the full decision.