Regulation of the Brazilian Advertisement Industry
This article will provide information about the rules, laws and institutions that regulate the advertisement segment in Brazil.
The advertisement industry in Brazil is a very competitive market, especially when it comes to the provision of services to large accounts. However, the big amount of opportunities represent a vast segment - especially in caring for micro and small businesses that need professional support to develop presentation materials (logos, business cards, office supplies, advertising campaigns, among others).
According to a research from Publicis, the Brazilian advertising market is expected to grow 31% between 2010 and 2013. The report also indicates that betting on the Internet should continue and promise to yield good fruits for the sector. Advertising on internet grows three times faster than the market as a whole.
Another report made by the consultancy ZenithOptmedia estimates that Brazilian Advertisement market will move USD 22.2 billion in 2014, when Brazil will become the fifth world’s largest advertisement market. The fees for the advertisement works are listed in a table issued by the Trade Union of Advertising Agencies of each Brazilian state.
Advertisement Industry regulations in Brazil
When it comes to advertising in Brazil, there are a lot of restrictions. The segment is strongly regulated and has several prohibitions and supervision bodies. The Brazilian legislation adopts a mixed system, with the advertising industry being controlled by the Executive, through the exercise of police power, the Legislative, through the elaboration of laws, and the Judiciary, as a result of the examination of lawsuits filed.
Simultaneously, there is the self-regulatory control exercised by CONAR, whose main instrument is the Code of Self-Regulation in Advertising which all the advertisement companies are obliged to follow. Though the State has the power to interfere in advertisement businesses in Brazil, this industry’s activities are mostly self-regulated.
Basically, the advertisement industry in Brazil is regulated by:
- The Consumer Defense Code (Código de Defesa do Consumidor, known as CDC)
- Specific Laws
- CONAR (Conselho Nacional de Autorregulamentação Publicitária)
Further, we will discuss how these three elements work for the regulation of the advertising industry in Brazil.
The Consumer Defense Code (CDC)
Some articles of the CDC establish regulations of advertisements in Brazil in order to protect consumers. Article 67, for example, establishes the protection against misleading or abusive advertisement: Consumers have the right to demand for everything that was promised in ads.
If what was announced was not complied, then consumers have the right to cancel the purchase and have their money back. Misleading or abusive advertisements are considered a crime according to the Code. Article 69 of the CDC also states about advertising.
Specific Laws
Law nº 4.680 Regulates the profession of Advertiser and agent of Propaganda and other measures.
Law nº 9610 Changes, updates and consolidates the laws on copyright and other matters.
Code of Ethics Define the ethical principles that should guide advertising.
Article 268 of the Decree. 2998 Provides for advertising of firearms.
Law no. 5197 Provides for the protection of fauna and other measures (use of wild animals).
Law 9.610 The Copyright Act
CONAR
The National Council for Self-Regulation in Advertising (Conselho Nacional de Autorregulamentação Publicitária, CONAR) is a civil society organization founded in 1980, in São Paulo. CONAR is the most important self-regulation institution of the Brazilian advertisement industry.
The activity developed by CONAR aims to prevent the release of misleading, offensive, abusive or disrespectful ads and campaigns and defend the fair competition among advertisers.
The entity does not have "police power"; cannot imprison, fine, or send money back to offended consumers (this is in charge of the Consumer Defense Code). CONAR focuses on the ethics in advertising, and in this field, it can avoid excesses and correct deviations and deficiencies found in the ads.
CONAR has a specific Code named Código de Autorregulação Publicitária that contains the positioning of the entity.
Other self-regulation institutions
- ABA - Associação Brasileira de Anunciantes: organization that brings together the leading advertisers in the country.
- ABAP - Associação Brasileira de Agências de Publicidade: organization that brings together key agencies in the country.
- ABERT - Associação Brasileira de Emissoras de Rádio e Televisão - organization that brings together major radio and television in the country.
- ABP - Associação Brasileira de Propaganda: entity that brings together businesses and professionals in advertising and is the oldest of the Brazilian associations in the advertising area.
- ADVB - Associação dos Dirigentes de Vendas e Marketing do Brasil - entity that congregates professionals in marketing and advertising.
- IVC - Instituto Verificador de Circulação - entity maintained by advertisers, agencies and carriers to audit independently the circulation of newspapers and magazines.
Opening an advertisement company
The process of opening an advertising company in Brazil is basically the same as opening others. It is necessary to take some steps for the opening of an advertisement company in Brazil, such as:
- Registration with Junta Comercial
- Registration with the Federal Revenue Service
- Registration with Secretary of the Treasury
- Registration at the municipality
- Registration with INSS
- Registration with the Union of Employers (Sindicato Patronal)
Taxation
The segment of Advertising Agency, understood the advertising agency services and advertising, including placement agency by any means, you cannot opt for Simples Nacional arrangement, since this activity was excluded of the activities benefited because it is an activity of the technical nature of intellectual regulated profession. Thus, the business segment of Advertising Agency should choose one of the following taxation regimes: Lucro Real or Lucro Presumido.