Case Summary and Outcome

The 10th Federal Court in Minas Gerais, Brazil, pursuant to article 19 of the Brazilian Internet “Bill of Rights” (Marco Civil da Internet), ruled that Google is under no legal obligation to preemptively monitor or restrict advertising videos targeted to children, nor does it have a duty to add warnings or revise its community standards. Concerned about the negative effects advertising can have on children, The Federal Public Attorney’s Office filed a civil class action lawsuit against Google Brasil Internet Ltda. and the National Council for the Rights of Children (CONANDA), requesting: (i) the company provide warnings regarding advertisements aimed at children and tools for reporting such content to the platform; and (ii) the Council to establish administrative sanctions for content producers advertising to children. The Court further found that the Council has no legal authority to impose administrative sanctions.

Facts

In March 2014, the National Council for the Rights of Children (CONANDA) approved Resolution no. 163/2014, which defines types of advertising considered abusive to children and adolescents and provides examples across a broad range of media. Under the Resolution, advertisements employing the following content, among others, aimed to entice children to consume products could be considered abusive: cartoons, animations, puppets, or dolls, as well as competitions or games offering prizes. The Council is one of Brazil’s most important government bodies designed to protect the interests of children and youth. One of its primary activities is to monitor child protection actions carried out by the state. Its resolutions are legally binding and critics charge that the impugned resolution effectively rendered any and all marketing aimed at children illegal and a violation of their rights.  Following the implementation of Resolution no. 163/2014, restriction on advertising aimed at children has become more frequent in Brazil. For instance, the Superior Court of Justice (“STJ”) found companies in two cases (Pandurata Alimentos Ltda. vs. Public Prosecutor’s Office from the State of São Paulo, Superior Court of Justice, Appeal #1.558.086/SP, 2016 and Fundação de Proteção e Defesa do Consumidor do Estado de São Paulo vs. Sadia S/A, Superior Court of Justice, Appeal #1.613.561/SP, 2017) guilty of abusive advertising and tie-in sales which are illegal under the Brazilian Consumer Defense Code (“CDC”). The companies sold toys to children at a minimal cost if they sent in proof-of-purchase seals for specific products.

YouTube is a content sharing space that has been employed in Brazil to promote and disseminate videos where children are the lead characters, some of which could be considered advertisements. Additionally, some Brazilian channels, such as Bel para Meninas, often promote products targeted to children.

The Federal Public Attorney’s Office (MPF) argued that several videos shared on YouTube contain abusive and illegal publicity aimed at children. Concerned with YouTube’s easy access by children, MPF filed a civil class action against Google Brasil Internet Ltda. and the National Council for the Rights of Children (CONANDA), requesting: (i) the company to provide warnings regarding advertisements aimed at children and tools for reporting that type of content to the platform; and (ii) the Council to include administrative sanctions in Resolution no. 163/2014 in order to punish content producers advertising to children.

Decision Overview

The decision of the 10th Federal Court, First Circuit was delivered by Judge Miguel Angelo de Alvarenga Lopes.

The main issue before the Court was whether Google could be compelled to exercise control over merchandising content on YouTube. In rendering his decision, the federal judge referred to Brazil’s Internet “Bill of Rights” (Marco Civil da Internet), which governs internet use in Brazil. Specifically, the court relied on key principles listed in Marco Civil da Internet, including freedom of expression, communication and thought (article 3, subparagraph I), and the accountability of agents according to their activities (article 3, subparagraph VI).

MPF asserted that child protection as guaranteed under the Brazilian Constitution and ECA, as well as the principles of consumer protection, such as non-abusive advertising and transparency, must be safeguarded by the federal government.

With regard to CONANDA, the primary question was whether the Council had the legal authority to impose sanctions for violations of Resolution no. 163/2014. CONANDA was created in 1991, under the mandate of the ECA, and is part of the Federal Government. The body is responsible for the protection of children and youth, for which it has employed a variety of strategies – including the passage of resolutions to further clarify and complement what is stipulated by law. These resolutions, therefore, must conform to the Brazilian Constitution and national legislation. In order to assess the request for administrative sanctions under CONANDA Resolution no. 163/2014, the judge reviewed Law no. 8,242/1991, which created the council.

Regarding CONANDA, the judge stated that the Council has no legal authority to establish administrative sanctions, according to article 2 of Law no. 8,242/1991. Pursuant to the Brazilian Constitution, the Council can only establish general norms on child and youth protection – but not impose sanctions, since this is the prerogative of the legislative bodies.

According to the federal judge, advertising through merchandising is considered abusive under CONANDA Resolution no. 163/2014, which seeks to enforce the norms of the Consumer Defense Code (CDC) and the Statute of the Child and the Adolescent (ECA). Pursuant to article 37 of CDC, advertising is abusive when it takes advantage of a “deficiency of judgment and experience of the child“, while article 71 of ECA sets forth that it is necessary to respect children’s condition as a “person in development”.

The federal judge stated that some videos shared on YouTube include content that can be classified as merchandising, i.e., a reference to a brand or a product in exchange for payment or some other reward. This has certain implications pursuant to Brazilian law, especially regarding the duty of transparency and identification of advertising messages – art. 36 of the Consumer Defense Code establishes that advertising must be transmitted in a way that enables consumers to easily understand it as an advertisement. The issue becomes more serious when advertising targets children.

The Court denied MPF’s injunction request, finding that there is no legal duty for Google to preemptively police content, pursuant to article 19 of Marco Civil da Internet. However, Google could be compelled to remove YouTube videos if, after receiving a court order demanding the removal of specific content, the company failed to comply. Therefore, the responsibility falls on the concerned parties to file an action requesting Google to remove inappropriate content. Since the platform has no legal obligation to pro-actively monitor or restrict videos posted by its users, it does not have a duty to add warnings to any videos. In addition, the judge asserted that putting in place a protocol for users to report improper or illegal content is not mandatory – even though Google may choose to adopt such a policy on its own.