Advertising

Regulation

What rules govern advertising on the internet?

First, there is the possibility that business-to-consumer e-commerce may mislead consumers. Misleading representations are therefore prohibited under the Act against Unjustifiable Premiums and Misleading Representations as well as the Unfair Competition Prevention Act.

Regarding this point, the Fair Trade Commission has issued guidelines with respect to representations in business-to-consumer e-commerce entitled ‘Problems and Points of Concern under the Premiums and Representations Act Concerning Representations in Business-to-Consumer E-Commerce’, which set out points of concern regarding representations by businesses. The Consumer Affairs Agency has also issued more recent guidelines entitled ‘Problems and Points of Concern under the Premiums and Representations Act Concerning Advertising Representations in Internet Consumer Transactions’.

Second, under the Act on Specified Commercial Transactions, a business entity that sells products over the internet:

  • must present certain matters stipulated in the Act;
  • is prohibited from using false or misleading advertisements; and
  • is prohibited from providing advertisements by electronic means to any targets who have indicated they do not wish to receive such advertisements.

Furthermore, certain acts or regulations that regulate specific areas such as pharmaceuticals, health foods and money-lending businesses govern advertising on the internet.

Definition

How is online advertising defined? Could online editorial content be caught by the rules governing advertising?

No definition of online advertising is provided under the laws and other rules. Online editorial content could be caught by the rules governing advertising depending on its contents and style.

Misleading advertising

Are there rules against misleading online advertising?

Misleading representations are prohibited under the Act against Unjustifiable Premiums and Misleading Representations, which prohibits any representation:

  • where the quality, standard or any other content of goods or services is portrayed as being much better than the actual goods or services, or are where the goods or services are portrayed as being, contrary to fact, much better than those of competitors; or
  • by which the price or any other trade terms of goods or services could be misunderstood by general consumers to be much more favourable than the actual goods or services, or than those of competitors, if they are likely to induce customers unjustly and to interfere with general consumers’ voluntary and rational choice-making.

With regard to the first point above, advertisers should keep evidence to prove the quality, standard or other contents in question of the actual goods or services, such as the results of experiments or investigations, opinions of experts, or academic literature.

These rules apply to all consumer advertising in all industries.

Restrictions

Are there any products or services that may not be advertised on the internet?

From 2009, only a few medicines could be sold over the internet due to the amended Ordinance of the Ministry of Health, Labour and Welfare.

However, after the Supreme Court rendered a judgment in January 2013 stating that this Ordinance was illegal and void, the Pharmaceutical Affairs Act and the Pharmacists Act were amended in December 2013.

By this amendment, with regard to non-prescription medicines, only limited and specified high-risk medicines are now prohibited from being sold over the internet.

In addition, after the amendment to the Act on Welfare and Management of Animals in August 2012, when selling pets over the internet, it is necessary to show the pets and provide their relevant information to customers on a face-to-face basis.

Finally, goods or services that are generally in violation of rules or regulations are not permitted to be sold on the internet.

Hosting liability

What is the liability of content providers and parties that merely host the content, such as ISPs? Can any other parties be liable?

With regard to advertising, the party that makes the advertisement is liable. Therefore, usually ISPs are not liable if they only provide an internet connection environment. However, ISPs may be subject to liability in relation to the unlawful contents if they are inactive with a fault despite a victim’s warning to them following a notice and takedown type request to the ISP as provided by the Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers.

Under the Act against Unjustifiable Premiums and Misleading Representations, a party that makes misleading representations as explained in question 2 can be subject to an order for suspension and payment of a surcharge.