China's Advertising Law – The Power of Words
In 2018 China legislated the Advertising Law as a remedy to the phenomenon of online fraud. Though we cannot count this law under the umbrella of the Data Protection Laws, we thought it is worth mentioning, as many companies are not fully aware of it and thus they put themselves at risk unintentionally.
But don’t get it wrong! This law DOES apply to you, even though you might not be a media company. In fact, this law applies to any individual or a company that publishes any type of content online, whether it is your company website, or your social media accounts such as official WeChat account, Weibo or Tik Tok.
Pay attention
The purpose of this law is very straightforward – to protect Chinese consumers against online fraud. One famous example you might recall is of the Chinese cancer patient who searched for help online only to fall into the hands of a fraud advertisement on Baidu, ending up spending all of his money on a false promised recovery treatment.
The simplest rules to follow are:
Make sure you don’t claim anywhere to be “the best”; “the only”; or to guarantee anything you cannot 100% provide.
/If you have any patents – state their registration numbers clearly, so your customers can look them up.
/Always consider local national and cultural sensibilities; the examples here can make a long list but most of us heard of the failed D&G advertisement "Eat with Chopsticks" that caused the brand a lot of damage.
In Chinese public eyes, this ad was considered racist and culturally inappropriate.
The penalties
Companies (or individuals) violating the law will be subject to fines ranging from three to five times the advertising expenses or, if the expenses cannot be calculated, the amount could even reach 1,000,000 RMB. Yes, you read it right, a million RMB.
But there is more to it than the fine; there might also be consequences to the company’s reputation and potential damage to your brand. Remember - a violation of the law (and any other law for that matter) is being recorded in the national Corporate Credit System and is made visible to the public.
In serious cases of violation, the company’s business license or other licenses might be revoked as well.
Avoid the unnecessary fines and potential damage to your brand and make sure to follow the outlines of the Advertising Law.
Have you ever had any experience with the law? Share with us.
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