The State Administration for Market Regulation recently issued the Guideline on Law Enforcement for Using Absolute Terms in Advertisements (the “Guideline”), which provides guidance to regulators and companies on one of the most common issues of enforcement under the Advertisement Law. The Advertisement Law prohibits use of absolute terms like “highest level,” “best,” “first,” and other similar terms in advertisements. This restriction applies to all advertisements in the Chinese market, not just those for food, drugs, medical devices, and cosmetics.
The Guideline clarifies the scope of the Advertisement Law’s absolute terms restriction, interpreting it in light of its purpose, i.e., to protect the right of consumers to accurate information and to prevent the harm that can result from inaccurate information in advertisements for goods or services. The Guideline sets forth certain circumstances in which the content will not be deemed as advertisements and thus not subject to the absolute terms restrictions, e.g., when describing the company (not the products), the company’s attitude or corporate culture, or matters unrelated to product performance. The Guideline also notes that the Advertising Law’s absolute terms restriction does not apply when used as a self-comparison to the same brand or the same company’s goods, or when publicizing certain factual information regarding sales and market share, among other limited scenarios.
In addition, the Guideline states that authorities should consider the whole context in enforcement against absolute terms in advertisements and make reasonable judgments that are proportional to any harm caused. The Guideline provides guidance as to when no or lighter penalties should be imposed. Of note, the Guideline explains that when an advertisement for a medicine, medical treatment, medical device, medical cosmetology, health food, or formulated food for a special medical purpose uses absolute terms in relation to curative effects, cure rates, efficiency, and other similar issues, this generally will not be considered a minor illegal act, nor as having relatively small societal harm.
The full text of the Guideline is available at: https://gkml.samr.gov.cn/nsjg/ggjgs/202303/t20230320_353975.html.
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