New Legal Framework Against Unfair Competition to Take Effect in Ecuador

The regulation of markets in Latin America is a continuous process aimed at facilitating trade and investment in each country. By the end of this year, Ecuador is expected to implement a new legal framework that, in addition to promoting and ensuring fair market competition, commercial loyalty, and the principles of good faith, will also protect the economic interests of businesses and consumers.

All companies or organizations operating or participating in the Ecuadorian market, regardless of their sector or size, will be subject to this law, which introduces a dual approach to liability by addressing both “simple unfairness” and “aggravated unfairness.” The first directly affects competitors and consumers, with sanctions enforced through civil proceedings. “Aggravated unfairness” applies when the economic public order is harmed, resulting in high-value fines for the infringing company.

The unfair practices subject to sanction include:

Acts of confusion: Use of signs, packaging, slogans, or presentations that may mislead consumers regarding the business origin of a product or service.

Acts of deception : Any conduct containing false information or, even if truthful, that misleads the consumer and affects their decision-making, such as claims about price, quality, origin, features, quantity, among others.

Acts of imitation : Imitation is permitted unless it infringes intellectual property rights.

Acts of denigration: Dissemination of inaccurate, false, or irrelevant statements that damage a competitor’s reputation.

Exploitation of another’s reputation: Use of distinctive signs, expressions, or references associated with competitors to take advantage of their market reputation or prestige.

Pyramid selling schemes: Promoting or managing schemes in which participant compensation mainly derives from recruiting new members rather than from the actual sale of goods or services.

Acts of discrimination: Unjustified differential treatment of consumers in pricing or sales conditions, unless based on reasonable cause.

Abuse of economic dependence: Exploiting the dependence of a supplier or client who lacks equivalent alternatives in the market.

Loss-leading sales:: Selling below acquisition cost for unfair purposes.

Unlawful advertising: Disseminating advertising content that is misleading, aggressive, sexist, discriminatory, covert, or that violates fundamental rights, especially those of children and adolescents.

If you require advice on matters of unfair competition or would like further information on this topic, please do not hesitate to contact us:

https://omcabogados.com.pe/en/legal-consultation-trademark-patent-in-peru-and-latin-america/