19 February 2016
The Shanghai Administration of Industry and Commerce (“Shanghai AIC”) recently released its report concerning the enforcement of the Advertising Law in 2015. According to the report, the Shanghai AIC handled 1,983 cases involving illegal advertisements and handed down penalty decisions for these cases including accumulated fines of RMB 55.57 million (approximately US$ 8.4 million). The Shanghai AIC also selected 10 notable cases in the report with a view to deterring similar violations in the future. In this article, we have summarized some of these notable cases:
- Use of superlatives
- “The best?”
A Shanghai investment company claimed on its website that its investment product is the “best”. The use of “best” violates the prohibition on superlatives in advertisements under Article 9 of the Advertising Law. The advertiser was fined RMB 200,000.
False or misleading advertisements
“No grease stains? Are you sure?”
A seller of a US-brand of kitchen cabinets claimed that the cabinets are coated with oil-resistant surfaces and that there will be no grease stains. The AIC however found that only one of the surfaces of the cabinets is covered with an oil-resistant surface while the
rest of the surfaces are not. The seller was fined RMB 820,000 for making this false representation.
“Sunbathing will whiten your skin?”
A cosmetics seller claimed in a television commercial for its whitening cosmetics that the more sunbathing its user has, the better whitening and moistening effect its product can achieve. The AIC found this claim contrary to the common scientific knowledge and that the seller was unable to produce any evidence to support the claim. The seller was fined RMB 1.1 million.
Ambiguous citation
“Claiming past glory?”
A computer seller cited in its advertisement for laptops that the advertised product was ranked as “No.1 in quality” by the Wall Street Journal and “No. 1 laptop brand” by the China Statistics Information Service Center. However, the AIC found that the Wall Street Journal ranking was only applicable for the year of 2009 whereas the latter ranking was for the second quarter of 2014, and thus the AIC considered that the seller failed to specify the applicable periods. The seller was fined RMB 50,000 for making an ambiguous citation in violation of Article 11 of the Advertising Law.
Remarks
The Shanghai AIC holds the record of handing down the largest fine for false advertisement in China (please refer to our previous article: China Slaps Record Fine on False Advertising – Draft Advertising Law stimulus for tougher stance?). This recent report of the Shanghai AIC therefore is a good reference to brand owners and advertisers as to the kind of advertising claims which may attract the authorities’ attention, and potentially penalties. As the cases summarized in this article show, advertisers must carefully scrutinize their proposed advertisements to avoid potentially false, misleading or ambiguous contents. Every word counts.
The full report of the Shanghai AIC is available here.
