China has some pretty strict laws on what you can and can't say in a commercial advertising environment. SmartShanghai learned that the hard way a couple of years ago when we called Xuhui district by a name that's often used in tourist guidebooks.
We spoke to a lawyers Saway Wang & Associates to get some more insights, which might be very helpful for those of you in marketing, but also interesting for the common reader (because of lot of these rules are for protecting consumers). Pretty useful knowledge for anyone running a business in Shanghai.
We've heard of companies getting into trouble for saying things like "they are one of the leading advertising agencies". What can you say, what can't you say?
According to the Advertising Law, the following advertisements are not allowed:
- Advertisements Using Absolute Superlatives: Ads cannot include phrases like "the most," "the best," "highest," "top level," "top-tier," "No.1," "only," "first," "world-leading," "industry leader," "forever," "national level," "world level," "world premiere," etc., which suggest unrivaled superiority.
- False and Exaggerated Advertising: While advertising often involves exaggeration, this rule targets claims that are demonstrably false.
- Unauthorized Use of State Authority: Ads must not falsely claim endorsement by, or covertly use the names or images of, state authorities or officials.
- Content Restrictions: Ads cannot contain obscenity, pornography, gambling, superstition, terror, or violence.
- Offenses Against State Dignity or Interests: Advertisements must not harm the state's dignity or interests, such as by using an incorrect map of China that omits key areas like Taiwan, the South China Sea islands, or the Diaoyu Islands.
- Misuse of National Symbols: The use of China's national flag, anthem, emblem, military flag, anthem, emblem, and other symbols in advertising is forbidden.
- Discriminatory Content: Ads must avoid content that discriminates on the basis of ethnicity, race, religion, or sex. For example, an ad deemed to belittle or objectify women led to a 200,000 RMB fine for a media company.
- Environmental and Cultural Harm: Advertising that impedes the protection of the environment, natural resources, or cultural heritage is not allowed. For instance, a restaurant faced a 10,000 RMB fine for advertising dishes with wild animals, undermining wildlife protection efforts.
What if I can justify the claim? Let's say my restaurant won a few industry awards?
If an advertiser disagrees with the penalties levied by the Market Supervisory Bureau, they have the option to present supporting evidence (such as awards, certificates, and data) to substantiate their claims. Should the Market Supervisory Bureau maintain its stance on the penalties, the advertiser can request an administrative reconsideration from a higher-level authority within the Bureau or pursue an administrative lawsuit.
A while ago, a restaurant was fined for advertising an eating competition, on grounds that it's immoral. How is that defined, and how can I know if what I do is immoral? Does the government release guidelines?
Advertising an eating competition is viewed as promoting food waste and immoral conduct, contravening Article 9(7) of the Advertising Law, which requires advertisements to adhere to good social morality, and Article 7(2) of the Combating Food Waste Law, which forbids restaurants from enticing or misleading consumers into purchasing excessive amounts of food.
Given the broad and nuanced nature of morality, specific guidelines delineating moral from immoral advertising do not exist. Generally, advertisements that propagate harmful or incorrect values may be considered immoral and are subject to penalties under the Advertising Law.
Al's Diner promoted a competition called 'King of Appetite Muffin Challenge' which offered a full refund to those being able to eat five muffins and drink 1 large milkshake in 10 minutes. The Market Supervision Bureau imposed a fine of 30,000 rmb fine on the restaurant, arguing that the success rate of the challenge is low, and that the food left over from the unsuccessful challenge would be thrown away, which is a waste of food. That is contrary to the good social customs of thrift and frugality, as well as a violation of the Advertising Law.
A couple of companies have got in trouble for using terms like "Former French Concession", what's the deal with this?
The term "French Concession" relates to an area in contemporary China that was leased to France under treaties considered unequal. It transcends mere geographical and cultural descriptors, carrying with it a specific political and historical connotation. The use of this term, along with the implications it bears, is seen as derogatory and harmful to the state's dignity and interests, breaching the stipulations of the Advertising Law.
In 2021, the American burger franchise Shake Shack was fined 200,000 RMB for distributing a poster that included the phrase "Former French Concession." The rationale for the fine was that the term "Former French Concession" could evoke feelings of humiliation and oppression among the public familiar with its colonial history, thereby detracting from the country's dignity.
A couple of companies got caught claiming a product was discounted when in fact it was never actually sold at the original price. Can you tell us more about this?
Under the Advertising Law and the Provisions on Administrative Penalties for Price Violations, advertisements employing false or misleading pricing strategies (where the price does not reflect reality) to lure consumers or other businesses into transactions are classified as false advertising and subject to penalties.
Can you compare yourself to competitors in advertising? What are the legal boundaries that one should be aware of?
Yes, but with caution. While the law doesn't outright ban comparative advertising, it outlines several challenging boundaries to adhere to. Advertisements must remain truthful and fair, avoiding misleading consumers or overstating the benefits of the advertised product. They must not intentionally disparage a competitor's product or harm their business or product reputation. Such actions could lead to significant loss of trust from the competitor's customers, potentially causing them to avoid or lessen their business with the competitor.
What's the issue with media publishing paid articles on WeChat without labeling them?
Online advertising must adhere to the Administrative Measures for Internet Advertising, which mandate that such content be clearly recognizable as advertising to consumers. This requires that online advertisements, including those on platforms like WeChat, be explicitly marked, allowing consumers to differentiate them from organic content. Specifically, the advertiser is obliged to clearly label these as "Advertisement" to prevent confusion with natural search results or regular content.
The amount of popups and ads in local apps seem to be getting out of hand. Are there any regulations for those:
It does seem local authorities are concerned about this as well, and are implementing measures to combat this trend. Here are just a few examples:
- Pop-ups shall clearly mark the closure sign to ensure the advertisement can be closed with one click.
- Advertisers shall not deceive or mislead users to click on or browse advertisements through false system, software updates, error reporting, removal, notice, false signs of play, start, pause, stop, return or false promise of rewards, etc.
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Saway Wang & Associates
Saway Wang and her team works in Yingke Law Firm, one of China's largest law firms with offices in multiple cities. She is fluent in English, and has almost 10 years' experience in providing legal service for expats and foreign companies in China, which includes all types of cases related to dispute resolution, corporate and...
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