Abstract

MARTINEZ, Gabriel. Economics of the 2021 Mexican advertisement law. Estud. derecho inf. [online]. 2024, n.17, pp.139-163.  Epub Sep 06, 2024. ISSN 2594-0082.  https://doi.org/10.22201/iij.25940082e.2024.17.18785.

This research studies the economic motivations of the Law for the Transparency, Prevention and Combat of Improper Practices in Advertising Contracting, published in 2021. The analysis is based on economic theories relating to moral hazard in contracting and networked platforms. It describes the general functioning of the advertising industry and documents the structure of the industry in Mexico. The main prediction in the economics of platform networking is that companies look for the price mix on each side of the market to optimize their results and can charge little or even below costs to media or advertisers that help them expand their network. Typically, they serve publishers and advertisers. The Advertising Law establishes absolute prohibitions for a company to serve publishers and advertisers, and to broker spaces, and assigns to the Federal Economic Competition Commission the function of enforcing the law. However, the conduct raised by the initiative that led to the law is not of market abuse, nor are they per se illegal. The absolute prohibitions that are established, if applied, would affect not only traditional agencies, but would force the breakup of large digital platforms that are properly intermediaries in advertising markets.

Keywords : advertisement; competition; moral hazard; platforms; Mexico; mediation.

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