Key points of the Administrative Measures for Internet Advertising

The Administrative Measures for Internet Advertising (hereinafter referred to as the "Measures"), which came into effect on May 1, 2023, is a thematic supplement to the existing Advertising Law of the People's Republic of China (hereinafter referred to as the "Advertising Law") and the E-Commerce Law of the People's Republic of China (hereinafter referred to as the "E-commerce Law"). Although many contents of the Measures have already been regulated in the previous Interim Measures for the Administration of Internet Advertising formulated in 2016, these new Measures have significant revisions and supplements compared with the previous interim version. In this article, we will explain some of the key provisions of the Measures.

According to Article 2 of the Measures, commercial advertising activities, regardless of their forms, for purpose of direct or indirect promotion of goods or services within the territory of China by making use of websites, webpages, internet applications and other internet media, are subject to the Advertising Law and Measures.

In consistency with the Advertising Law, main participants of internet ad can be defined in the following categories based on their roles and functions:

In advertising activities, one subject may assume multiple roles as mentioned above. In addition, it is specifically mentioned in the Measures that in the live-streaming, the participants could be identified as the advertising subjects and bear the corresponding responsibilities if their activities constitute advertising activities.

It is also noteworthy, compared to the previous draft version for public comments, the provisions on the responsibility of overseas advertisers, who have no entities within China but conduct cross border e-commerce advertising, have been removed from the official version. Therefore, the management of cross-border e-commerce advertising is yet to be clarified by law.

In view of the characteristics of internet ads and the current problems arising from them, the Measures have made more detailed restrictions.

Different from traditional media, advertising in the new media tends to approach their consumers in a more subtle manner. Internet advertisers are more inclined to hide their commercial intent and influence the consumers’ decision through word-of-mouth recommendation by common people or sharing by social media influencers. However, it is quite controversial whether such misleading behaviors violate the principle of identifiability in the Advertising Law.

Exactly targeted at this point, the Measures not only re-emphasize the requirement of advertising being identifiable, but also list the common types of “soft-sell advertising”, such as advertising in form of rankings, knowledge introduction, experience sharing and consumption evaluation, to which shopping links and other purchase ways are attached.

In the medical field, besides the existing prohibitions on soft-sell advertising (for example, it is prohibited by the Advertising Law to publish ads in medicine, pharmaceuticals, medical device and dietary supplement covertly through scientific popularization of health knowledge; the Measures for the Administration of Medical Advertisements ban the issue of medical ads in a disguised way by use of news or special program (column) of medical information services), the Measures further clarify the typical cases of disguised form, i.e. presentation of address, contact details, shopping links and other information of goods or service providers at the same page of or together with introduction of health knowledge, which is now expressly prohibited by law.

In response to the chaos brought to the consumption experience of internet users, the Measures impose a series of regulations, such as one-click shut down of pop-up ads, ban of click baiting, prohibition on interference in search result of government services, etc..

In supplementation of applicable laws or regulations, the Measures set forth more restrictions and prohibitions concerning advertising on the internet:

The Measures take into account the phenomenon in Internet advertising that pages sent for advertising pre-approval are legally compliant, which however may still contain links that lead to illegal content at the next level. Prior to the adoption of the Measures, there were few local rules that addressed this phenomenon. The Measures now clearly state that advertisers, advertising agencies and publishers are responsible for verifying the advertising content in next-level links when they publish an Internet advertisement with such links.

The above-mentioned provisions are generally applicable to all advertising subjects. Apart from that, in addition to the existing duties as stipulated in Advertising Law, E-Commerce Law and Anti-Unfair Competition Law, the Measures further clarify the respective duties and obligations of each subjects in internet advertising scenarios and stipulate penalties for violations.

The advertiser is the primary responsible person for advertising activities. According to the current law, in most non-compliance cases, even if the fault lies with the ad agent or publisher, the advertiser, as the entrusting party and funder with decision-making powers, normally cannot be exempted from his liabilities. 

On this basis, the Measures stipulate the following responsibilities for advertisers in internet advertising: responsibility for the authenticity, truth and legitimacy of advertising content; compliance in relevant qualifications; documents archiving; notification obligation for content changes.

In addition, the Measures stipulate the responsibilities of ad agents and publishers for registration, review and file management. Obligations of internet platform operators in prevention of illegal advertisements are provided by the Measures as well. However, giving the intermediary nature of platforms, internet information service providers shall only be punished when they publish illegal advertisements or fail to stop such illegal activities which they knew or should have known. On this basis, the Measures further provides standards for determining the situation of which an internet information service provider should have known.

Article 28 of the Measures provides that “where any advertiser, ad agency or publisher can prove that it has fulfilled the relevant responsibilities, adopted measures to prevent the tampering of linked advertisements and provided the real name, address and valid contact information of the subject of illegal advertising activities, it may be given a lighter, mitigated or no administrative penalty in accordance with the law.” Therefore, the Measures carve out a protection for the participants which passively involved in an illegal activity. It is recommended that the participants should file and record their advertising activities, and actively cooperate with the supervision authorities in their investigation and evidence collection.

For Internet advertising activities, multiple laws and regulations may be applied at the same time. First of all, Advertising Law, E-commerce Law and Anti-Unfair Competition Law as superior laws should be deemed to be basis for compliance; for specific products, regulations in the corresponding area shall be checked, e.g. "Measures for the Administration of Medical Advertising". Also, local regulations and rules may be applicable in different regions, such as “Guidelines for Advertising Publication Compliance in Beijing”. Advertising participants should check the compliance of advertisements in a comprehensive manner before placing ads in order to avoid legal exposure.