Abusive Clauses: A big company Is Fined for an app

The Argentine Federal Consumer Protection Authority (CPA) took an active part both in monitoring and imposing fines during 2021. In at least seven opportunities, it sanctioned several suppliers with the highest statutorily possible fine. It also imposed nineteen sanctions to different suppliers for including abusive clauses in their terms. With last year’s update and expansion of the abusive clauses catalog, commented here, we can confirm that this type of clause was and continues to be a topic on the agenda.

On January 5, 2022, the CPA imposed an ARS 5M fine to the local company, for including abusive clauses in an app terms and conditions and privacy policy. 

The CPA’s decision is worth analyzing because it enlightens on how the CPA construes the abusive clauses general regime. And, at the same time, it shows the criteria on current hot topics concerning consumers and data protection. In this case, twelve clauses from terms and conditions, and five clauses from its privacy policy were considered abusive for non-complying with Consumer Protection Law No. 24,240 and Personal Data Protection Law No. 25,326. 

Nowadays, most suppliers market their products and services by executing contracts containing boilerplate provisions. The CPA explained that, in its opinion, contingent on the service being available in Argentina, suppliers must comply with local legislation. As a result, those suppliers who conduct business in Argentina could revise their terms and conditions to meet the authority’s criteria. Especially, since all of their contracts of adhesion must be available on their web pages (see here).

So, which clauses the authority might consider tricky?

•    Early-waivers, even if they include qualifying phrases such as “to the maximum extent permitted by law” or any other phrase which implies that the indemnity might not ultimately be enforceable in certain jurisdictions, as well as clauses that limit suppliers’ liability concerning the quality of the information provided. 

•    Those which entitle the supplier to terminate the contract without cause or without the consumer’s infraction. An example of these may be the ones that allow suppliers to discontinue the service or modify, suspend, or impede consumers’ access to the service at any time and for any reason ‒even though services are provided for free at the time of writing this article‒. 

•    Those that transfer to consumers the obligation to be informed about modifications in terms and conditions or privacy policies, as well as those in which consumers’ silence is considered as acceptance. 

•    Those which generate uncertainty on data subjects for their vague content. These could be the ones where it is uncertain how the information will be used, who will access that data and with which purpose, and who and how will consumers be able to claim. 

•    Clauses that expand suppliers’ rights without free, explicit, and informed consent from data subjects. 

•    Those with contractual indeterminations or that may turn service conditions unforeseen while non-complying with the supplier’s legal duty to inform.