Shanghai Administration for Industry and Commerce (Shanghai AIC) recently published 11 typical false advertising cases they handled in 2016. Companies in four (4) of the eleven (11) cases were found violating the PRC Advertising Law due to the use of superlative words and were substantially fined. The cases highlight the practical risk if aggressive languages are used in advertisements.
The specific superlative words in these cases are:
1. "投资置业最佳选择" ("the best option for real estate investment" in English), used in an advertisement for loft style houses. The
company also made other false statements on the structure of the lofts and was fined RMB 200,000 (around USD 30,000).
2. "澳洲排名第一" ("Ranked No. 1 in Australia" in English) used for promotion of dietary supplements. The advertisement further
misrepresented the curing function of the supplements and therefore resulted in a fine of RMB 346,600 (around USD)
3. "最高逼格的" ("the highest caliber" in English) used for advertising a youth football game. The advertisement was also found disparaging
others and therefore the company was fined RMB 210,000 (around USD 31,500).
4. "全球CAD/CAM第一品牌" ("the first and foremost CAD/CAM brand in the world") and "国际顶级品质" ("the international superb quality" in English), used for promotion of dental clinic services. Shanghai AIC also found the advertisement using non-verifiable statistics and making an absolute assertion on service safety, and fined the company of RMB 200,000 (around USD 30,000).
Prohibiting the use of superlative words has attracted wide discussions since the PRC Advertising Law was amended in early 2015. The discussions are not the prohibition itself (which has been in the law for years), but because of the increased (and significant) amount of fines the authority can impose against use of superlative words under an amendment. The law now provides for a fine ranging from RMB 200,000 (around USD 30,000) to RMB 1,000,000 (around USD 150,000) for using this type of prohibited words.
Likely due to the hefty fines that may be imposed and the associated undesirable publicity, some companies have started to closely monitor competitors' advertisements and promotional activities and quickly report violations to the authorities. Some large online platforms, such as Taobao.com and JD.com, have also started to scrutinize the advertising words used by stores on their sites to avoid being found liable as advertisement publishers. All this calls for more caution with languages in advertisements.
The relevant articles of the law as amended are:
Article 9 "An advertisement shall not involve any of the following circumstances: (1)...; (3) using words such as the State-level, the highest-grade, the best etc."
Article 57 "Under any of the following circumstances, the administrative department for industry and commerce shall order the cessation of the release of the advertisement, and impose the advertiser a fine of no less than RMB 200,000 but no more than RMB 1,000,000; … (1) publishing the advertisement involving the prohibited circumstances prescribed in Article 9 and Article 10 of this Law; …"