China’s State Administration for Market Regulation recently published the Measures for the Administration of Internet Advertising (“Measures”), which will take effect on 1 May 2023. The Measures, containing a number of entirely new rules as well as a number of improvements and adjustments of the existing rules, will replace and repeal the previous Interim Measures for the Administration of Internet Advertising (“Previous Interim Measures”). The new Measures are intended to provide an updated regulatory framework, more in line with the current practices of Internet advertising, and envisage improved transparency, Internet user protection as well as amplified compliance obligations.
Highlights of the Measures
Some important new rules and improvements are as set out below:
- [New Rule] No disguised Internet advertising for medical or health products. The measures prohibits the ‘disguised’ advertising for: (1) medical treatments, (2) medication, (3) medical devices, (4) food with health claims, or (5) formula products for specific medical purposes. This means that such products may not be advertised under the disguise of introducing or promoting health and wellness knowledge. Such content is also prohibited to contain the address, contact information, purchase links or other particulars of companies offering such products or services.
- [New Rule] Livestreaming promotion is considered Internet advertising. The Measures clarify that livestreaming promotion of products and services, which has become enormously popular in China since early 2020, is considered Internet advertising under the Measures. This means that the livestreaming service provider, such as the operator of livestreaming website or the owner of the livestreaming account, may be considered as advertising agents and publishers depending on their specific involvement. In particular, the individual hosts who recommend products in their own name and based on their own experience may also be considered endorsers under the Advertising Law.
- [New Rule] No advertising on smart devices without consent. The Measures provide that explicit consent is required for advertisers to be able to push Internet advertisements to smart devices such as vehicles, e-readers, navigation devices, smart home appliances, etc., and for attaching advertisements or advertising links to e-mails or Internet instant messaging messages. This is an expansion of the consent requirements compared to the Previous Interim Measures which only required consent for attaching advertisements or advertising links to e-mails.
- [Improvement] Rules regarding identifiability of advertising refined. The Measures refine the pre-existing rules requiring that Internet advertising must be easily recognizable. The Measures specify that certain types of advertising which was previously considered to be in a grey zone now also needs to be clearly marked with a conspicuous “advertising” logo. Particularly, internet content that advertises goods/services under the guise of knowledge introduction, experience sharing, consumption evaluation, etc. needs to be clearly marked as advertising, as is also the case for sponsored results and sponsored shopping links.
- [Improvement] Rules regarding one-click pop-up closure refined. The Measures clarify that advertisers and ad publishers must clearly and conspicuously mark the pop-up close sign and may not hinder the one-click closure of pop-up ads in any way. In particular, the Measures list in detail the prohibited methods used to hinder the one-click closing of ads, which include notably the common practice of timers requiring users to wait a certain time before being able to close an ad, the presence of a fake close sign or an invisible or difficult to identify close sign, or close signs where two clicks or more are required to shut down the advertising, or other practices such as re-popping up after closure and so on.
- [Improvement] Misleading online clicks are specified. In furtherance to the general rule to prohibit inducing users to click advertising links or content by deceptive or misleading means, the Measures now list a number of examples, including using fake alarms on system updates, system errors, clearances, notices and so on; fake symbols for playing content, start, pause, return or so on (for online content) and deceptive promises relating to awards.
- [Improvement] Rules regarding docketing and record-keeping specified, including the situation where the advertiser advertises on its own Internet media. The Measures require advertising agents and publishers to establish registration, review, and archive management systems. This includes verifying and registering advertiser information, such as their true identity, address, and contact details, establishing advertising archives, regularly verifying and updating those archives, and verifying supporting documents and advertisement content. They must hire review personnel familiar with China’s advertising law or establish review bodies and must cooperate with government departments in investigating the internet advertising industry. Advertisers who advertise on their own website or application or user-end etc., the advertiser is required to docket the advertisement and keep the files for no less than 3 years after the running the advertising.
The new Measures also provide specific rules included for website for minors, e-cigarettes, auction-ranked advertisements, sub-hyperlinks embedded in front-end advertisements and so on.
While the new Measures provide more clarifications on the dos and don’ts of Internet advertising in China, it remains challenging to ensure compliance in the internet regime, as the content and forms of internet advertising are ever-evolving in the fast-changing but huge Chinese online market. Our firm has a wealth of experience in advising and training companies on China Advertising Law compliance. Should you require additional information please contact any of our lawyers listed here.
Authored by Stefaan Meuwissen and Grace Guo.