Case Study: Punishment for Publishing Advertisements Without Relevant Authorities' Approval
- China Legal Focus
- Feb 23, 2024
- 3 min read
Welcome to our series on Chinese Advertising Law – your concise guide to navigating the regulatory landscape. For foreign brands entering the Chinese market, adherence to advertising regulations is not just a good idea; it's crucial.
In this series, we'll explore real cases where businesses faced the consequences of not playing by the rules. Picture this: fines in the millions and, in extreme cases, the loss of a business license. Join us as we break down these cases in reader-friendly terms, providing a practical roadmap for foreign brands to stay on the right side of Chinese advertising law.
Punishment for Publishing Advertisements Without Relevant Authorities' Approval
Penalty: Confiscation of illegal gains: RMB 18,000; Fine: RMB 18,000
Violation: post a video promoting a medical device without scrutiny by the advertising review authority.
Case Description:
This case involves a well-known company, through the account on the Xiaohongshu (Little Red Book) platform, posted a video note titled "I've Had Enough of Hairy Days! Save Me, Hair Removal Device!" promoting a medical device, the U106PR model of an Intense Pulsed Light (IPL) treatment device. This advertisement, costing RMB 18,000, was not subjected to scrutiny by the advertising review authority.
Relevant Legal Provisions
Advertising Law of the People's Republic of China
Article 46: The release of advertisements for medical care, pharmaceuticals, medical devices, pesticides, veterinary drugs and health food products, as well as other advertisements that shall be reviewed as stipulated by laws and administrative regulations, shall be reviewed by relevant departments (hereinafter referred to as advertising review authorities) for the contents thereof prior to the release; no release is allowed if they are not reviewed.
Article 58: Where any of the following acts is committed, the market supervision and administration department shall order the advertiser to cease publishing the advertisement and eliminate the impact within the corresponding scope, confiscate one to three times the advertising costs, and may concurrently impose a fine of RMB 100,000 to RMB 200,000 if the advertising costs are incalculable or apparently low; or where the circumstances are serious, confiscate three to five times the advertising costs, and may concurrently impose a fine of RMB 200,000 to RMB 1 million if the advertising costs are incalculable or apparently low, and may revoke the business license; and the advertising review authority shall revoke the approval document for advertisement review and shall not accept an application for advertisement review submitted by the advertiser for one year: ... (14) Publishing an advertisement without review in violation of Article 46 of this Law
Lawyer's Commentary
In Chinese advertising regulation, the definition of advertisements is broad, covering not only explicit types but also implicit ones like knowledge sharing, and product recommendations by users/consumers.
If an advertisement (including implicit advertisements) involves medical, pharmaceutical, medical equipment, pesticides, veterinary drugs, or health food products, it must undergo review by the relevant authority before publication, as per Article 46 of the Advertising Law. This regulation aims to protect the public from misleading and inaccurate advertising information. Advertisers should identify the nature of the promoted product and submit it for review before publication.
Legal consequences for non-compliance with advertising regulations are severe. For serious violators, measures like revoking licenses and rejecting advertising review applications can be imposed. Hence, it is crucial to conduct thorough legal compliance checks before publishing any advertisement.
Foreign brands and advertisers should take note of the expansive definition of advertising, which includes not only overt promotions but also subtle forms such as product recommendations by users/consumers, etc. The case highlights the importance of a proactive approach in seeking approval for advertisements involving medical care, pharmaceuticals, medical devices, pesticides, veterinary drugs and health food products.
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