Marketing directors in charge of foreign cosmetic brands being sold in the PRC should be aware that a clear regulatory regime regarding cosmetic advertisements has been established, based predominantly around the Administrative Measures for Cosmetic Advertisements (the "Measures"), effective since 1993, and the PRC Advertising Law, effective since 1994.
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Marketing directors in charge of foreign cosmetic brands being sold in the PRC should be aware that a clear regulatory regime regarding cosmetic advertisements has been established, based predominantly around the Administrative Measures for Cosmetic Advertisements (the "Measures"), effective since 1993, and the PRC Advertising Law, effective since 1994.
In principle, the Measures provide that the content of cosmetics advertisements shall be "true, healthy, scientific and accurate", and shall not result in any "falsehood, deception or misleading of consumers". More precisely, Article 8 of the Measures lists 7 categories of information that are prohibited from appearing in cosmetic advertisements, being:
- falsehood or exaggeration of the cosmetic
product's name, production method, components,
efficacy or function;
- promises made on behalf of a third party or implications
leading to misunderstanding on the part of the
consumer;
- commenting on the medical efficacy of the product or
using medical terminology, without prior classification by
the State Food and Drugs Administration as a medical
drug;
- denigration of products similar to the advertised
product;
- use of absolute expressions (such as "the latest
creation", "the latest invention", "pure
and naturally made", "absolutely no side
effect");
- data concerning the efficacy, function or sales volume of
the product and
- any other features which breach the laws and regulations
of the PRC.
If the regulations referred to above are breached, the Administration of Industry and Commerce ("AIC") has the power to impose sanctions (such as fines ranging from twice to less than five times the advertising expenditure of the perpetrator according to PRC Advertising Law, fines ranging from RMB 10,000 to RMB 200,000 according to PRC Anti-Unfair Competition Law, an order to stop the publication and/or to make public corrections of the offending advertising to offset any adverse influence on consumers). Further, any individual consumer falling victim to the false advertisement and suffering a loss may also resort to civil action against the cosmetic company in order to obtain compensation.
In practice, the control over cosmetic advertisements is enforced on a discretionary basis. To date the regulations described above have not been strictly applied and only blatant falsehoods or exaggerations would be likely to attract the attention of the AIC. It is worth noting however, that authorities could easily consider the use of numbers to emphasise a products' efficacy (such as "results seen in x days") as constituting a blatant falsehood or exaggeration. Note also that the term "patented product" should not be used in advertisements prior to obtaining the formal certification from the Chinese Patent Bureau, even though a foreign patent may have already been obtained.
Many global cosmetic companies have been fined by the AIC for their use of exaggerating, inaccurate or misleading wording in their advertisements, in breach of the Measures. However, the highest fine imposed so far has only been RMB 200,000 (less than Euro 20,000). Despite the relative tolerance shown by PRC authorities in this field so far, it is strongly advised that global cosmetic companies are wary of and comply with the Measures and the PRC Advertising Law, which provide a regulatory framework allowing the authorities to impose a stricter cosmetic advertising regime at any given moment.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 03/06/2008.
