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  • Whether the Advertising Law Could Regulate a Company’s Website?

    Whether the Advertising Law Could Regulate a Company’s Website?

    Company A was punished by the administration authority for stating, “The first store for brand “XX” in XX city”, “The Only Seller for Free Shipping”, on its company website. A foreign-invested Company C entrusted Company D to design its company website, in which “Taiwan” and “Hongkong” were listed beside “China” in the introduction of the company. Later then, Company C and Company D were punished by the administration authority. The basis of the above 2 punishments is the “Advertising Law”.

    Those companies could not understand such punishment. They insist that these are only the description of the company on its own website, which shall not be deemed as an advertisement, and shall not be regulated by the “Advertising Law”. Actually, this is a false understanding.

    According to Article 2 of the “Advertising Law”, this law shall be applied to commercial ads that publicize, directly or indirectly and through certain media or forms, some kind of commodities or services. In addition, the “Interim Measures for the Administration of Internet-Based Advertising” has clearly defined that the “internet-based advertising” means commercial advertising which directly or indirectly markets, through websites, web pages, internet application programs, and other internet media, in the form of scripts, images, audio, video, or other means, goods or services. In view of this, if a company’s website has scripts, images, audio, video and etc., which are directly or indirectly promote commodities or services, then the “Advertising Law” could be applied to such website.

    After investigating the relevant cases, the common punishments have the following categories: (a) to use the false terms which misleading consumers. For example, Hangzhou Jingdu Hospital Ltd. uses the terms, “once clear never recurrence”, “Eczema itching the same day, 3-5 days cure”. (b) to use the words such as State level, highest level or the best etc. . For example, “Feipiao Net— high-end free exercise of the first brand”, “Guazi Secondhand Vehicle is far ahead” and etc.. However, for those words, there are disputes on the determination. For example, in the Jissbon case (see (2017) Su-01 Minzhong No.5886 Civil Judgment), the Nanjing Intermediate People’s Court determined that the demonstration which says “SKYN is China’s first high-quality polyisoprene synthetic condom” is the fact, so such advertisement did not violate the “Advertising Law”. (c) the demonstrations related to Hongkong, Macao, Taiwan, which have sensitive concerns. For example, the typical case is Company C’s case hereinabove.

    As for the service providers entrusted with making websites or publishing website contents, they shall be deemed as the advertising agents and advertisement publishers as stipulated in the “Advertising Law”. And they shall abide by the relevant laws and regulations related to advertising, so they have to review the validity of the content on the website and put forward their opinions when the website owner has requested any illegal requirements. In order to reduce the risks of website owners, we recommend website owners shall stipulated the validity review responsibility of the service providers in the contract, and the civil/administrative liabilities shall be undertaken by the service providers.

    Lastly, many companies would publish articles to indirectly promote the company itself or commodities/services via new media, such as official website, wechat official account and so on. According to the “Advertising Law”, an advertismenet shall be identifiable, otherwise it will be subject to administrative punishments, it is worthy to be noted that companies shall mark “Advertising” in such articles.