On December 24, 2014, the second amendment to the draft PRC Advertising Law (Amendment) was released, proposing more requirements for advertising companies and endorsers in the PRC. The key additions to the existing draft amendment are as follows:
There is a new definition of "Advertising" that will be covered by the PRC Advertising Law: Any commercial advertisement released on any media or in any form for the purpose of directly or indirectly introducing a product or service. This new definition indicates that free advertisements will be regulated by PRC Advertising Law, as it removes any reference to payment from the prior definition.
The Amendment also imposes new restrictions on endorsers, as follows: (i) Endorsers (i.e. celebrities and other notable persons) may not endorse pharmaceuticals, medicinal food products, or medical devices, (ii) Minors (under 10 years of age) may not act as endorsers, and (iii) Endorsers would not have enhanced liability, i.e., if an endorser endorses a product even though they knew or should have known that the advertisement contained false content, the Administration of Industry and Commerce (AIC) may confiscate any proceeds received by the endorser for such endorsement, and impose a fine equivalent to one or two times those illegal proceeds; in addition, where the legitimate rights and interests of consumers have been harmed, the endorser shall have joint and several liability with the other responsible parties.
There are also some new requirements for the contents and form of advertising: (i) Online pop-up ads must be able to be closed with a click, (ii) The flags, emblems and songs of the PRC armed forces may not be used in advertisements; (iii) The duration of advertising must be prominently and clearly indicated, (iv) The mass media will be required to publish public service announcements, and (v) Tobacco advertisements may only be published in tobacco shops. Publishing tobacco ads in any other locations or through any other media is prohibited. In addition, all tobacco ads must be approved by the AIC.
Taken together, these changes indicate that the Chinese government is strengthening advertising requirements and may plan to issue more detailed regulations in the future. It remains to be seen whether any specific enforcement measures will be taken.
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