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Legislation and regulation

Legal framework

What are the principal statutes regulating advertising generally?

Advertising activities are generally regulated in Japan by the following acts:

  • the Act against Unjustifiable Premiums and Misleading Representations (AUPMR);
  • the Act on Specified Commercial Transactions (ASCT);
  • the Medical Care Act;
  • the Act on Pharmaceuticals and Medical Devices (formerly the Pharmaceutical Affairs Act);
  • the Health Promotion Act; and
  • the Outdoor Advertisement Act.

There is also a ‘fair commission code’ applicable to advertising, and a number of advertising guidelines issued by trade associations authorised by the Secretary General of Consumer Affairs Agency and the Chief of the Fair Trade Commission of Japan responsible for specific industries.

Regulators

Which bodies are primarily responsible for issuing advertising regulations and enforcing rules on advertising? How is the issue of concurrent jurisdiction among regulators with responsibility for advertising handled?

The Secretary General of the Consumer Affairs Agency and prefecture governors are responsible for issuing advertising regulations and enforcing rules on advertising in accordance with the AUPMR. The Minister of the Economy, Trade and Industry (METI) also has responsibility in accordance with the ASCT.

In addition, the Japan Advertising Review Organization (JARO) (www.jaro.or.jp), a self-regulatory body established by the advertising industry, handles complaints and enquiries from consumers, competitors and others, and makes recommendations for the modification or discontinuance of questionable representations.

Regulators’ powers

What powers do the regulators have?

If a representation is found to be misleading, the Secretary General of the Consumer Affairs Agency (CAA) may order the advertiser to cease the misleading representation, to take the measures necessary to prevent a reoccurrence or to take any other necessary action, including public notice of the matters relating to the implementation of such measures (collectively, a cease-and-desist order). Such an order may be issued even if the violation has already ceased to exist.

In addition, where an advertiser has misrepresented the quality and value of a product or services, the CAA may order the advertiser to pay 3 per cent of sales value, for up to three years, of the represented products or services if the value is more than ¥50 million (the Penal Charge System). The advertiser may deduct the penal charge through submitting a refund plan to the CAA. In such an event, the Secretary General of the CAA authorises the refund plan and the advertiser refunds the amount authorised by the CAA to the applying customers and reports the refund to the CAA within one week. The CAA may deduct a penal equivalent to the amount refunded. If the amount refunded exceeds the amount for the penal charge, the CAA will not order payment of the penal charge.

If a prefectural governor recognises that misleading representations have been made in violation of the AUPMR, he or she may issue a cease-and-desist instruction similar to the order described above. If the advertiser does not comply with this instruction, or the prefectural governor finds it necessary to put an end to a violation, or prevent its reoccurrence, he or she may take appropriate measures, including the issuance of a cease-and-desist order. A prefectural governor may ask the advertiser itself, or others who have a business relationship with the advertiser (eg, its advertising agent or a media company) to report on the misleading representations, and may also have his or her officials enter the advertiser’s offices or other places of business, or those of other persons who have a business relationship with the advertiser, to inspect its books and documents, etc, or to ask questions about the persons concerned. The power of a prefectural governor has been strengthened, allowing him or her to independently take appropriate measures, without going through the CAA.

Where a seller or a service provider designated under the ASCT has violated the obligation to indicate certain information concerning goods, rights or services (eg, price, payment due and method, and cancellation) in an advertisement, the prohibition of misleading advertising, or the prohibition from sending email advertising without consent, and if the METI finds that the conduct is likely to significantly prejudice the fairness of a transaction arising from mail order sales and the interests of the purchaser or the service recipient, or if the seller or the service provider fail to comply with the above obligations and abide by the above prohibitions, the METI may order the seller or the service provider to suspend business activities that are connected with such mail order sales, either partially or completely, for a specified period of no longer than one year.

Regulators’ priorities

What are the current major concerns of regulators?

The CAA has concerns over compliance with existing laws by new means of advertising through the internet, such as the many ‘advertising agents’ that offer services related to providing positive feedback and comments on evaluation sites where there is an assumption of voluntary ‘word-of-mouth’ evaluation. The CAA has announced that such staged word-of-mouth evaluations are deemed to be an unjustifiable representation under the AUPMR.

Misleading representations and supply issues in relation to foodstuffs have been a problem, flaring up again in Japan in 2013, with instances of processed meat represented as high-quality beef and 100 per cent reconstituted juice sold as fresh juice, etc. In addition, misleading representation on ‘healthy foods’ regulated under the Health Promotion Act as well as AUPMR has been recognised and the CAA published guidelines on representation of healthy foods in June 2016. See question 34.

The CAA also requires advertisers to comply with AUPMR and related laws and regulations by instructing employees and assigning a person in charge of advertising and promotion.

Industry codes

Give brief details of any issued industry codes of practice. What are the consequences for non-compliance?

Each industry usually has its own code of practice. These are voluntary rules, but members generally follow these rules once formulated. Advertising agencies and media companies are also generally familiar with, and comply with, the rules specific to their clients’ industries. Non-compliance is very rare and could directly lead to a cease-and-desist order by the CAA and calls for commercial boycott by consumers.

Authorisation

Must advertisers register or obtain a licence?

No.

Clearance

May advertisers seek advisory opinions from the regulator? Must certain advertising receive clearance before publication or broadcast?

Advice may generally be sought from regulators; however, clearance before publication or broadcasting is not necessarily required. Each prefecture has its own advisory desk (eg, the Bureau of Social Welfare and Public Health in Tokyo), which can provide advice in relation to the Act on Pharmaceuticals and Medical Devices, the AUPMR and the Health Promotion Act. However, confirmation before publication or broadcast is optional.

In addition, the Advertising Review Council, Japan (ARC), a public interest incorporated foundation authorised by the Cabinet Office and originally established by major Japanese newspaper companies, can also research and provide a report on the contents of advertising prior to publication or broadcast, if requested by a member media organisation. Such ARC reports are not legally binding.

Private enforcement (litigation and administrative procedures)

Challenging competitors advertising

What avenues are available for competitors to challenge advertising? What are the advantages and disadvantages of the different avenues for challenging competitors’ advertising?

If an advertisement infringes the rights of a competitor, the competitor may bring a lawsuit against the advertiser. The competitor may ask the court for an injunction, damages and other remedies. However, litigation is costly and time-consuming, so advertising-related litigation of this kind is rare. A competitor may also complain to the JARO and ask them to recommend that the advertiser modify or discontinue any questionable advertising. This is relatively inexpensive, and generally produces reasonable results.

Notifying a prefectural governor or the CAA, or both, is another option. However, handling of complaints is at the discretion of the governor of the prefecture or the CAA, so notification is not always an effective remedy. In practice, directly contacting and discussing the questionable advertising with the advertiser or the advertising agency that is handling it can be fast and effective. If the assertions of the competitor are reasonable, faster settlement and an effective remedy can be obtained in many cases.

Public challenges

How may members of the public or consumer associations challenge advertising? Who has standing to bring a civil action or start a regulatory proceeding? On what grounds?

In practice, most advertising is challenged through the CAA or the JARO. Anyone may contact the CAA and the JARO, and no grounds are required to bring a complaint with either of these organisations.

If the CAA receives notice of questionable advertising, it will research the advertising, and, if it agrees that the advertising is misleading, it may issue a cease-and-desist order as described in question 3.

If the JARO receives complaints and enquiries concerning advertising, it examines them and, where necessary, recommends the advertiser to modify or discontinue making any questionable representations. Advice or information is also provided in response to enquiries.

Burden of proof

Which party bears the burden of proof?

In the court, the party asserting that there has been an infringement of rights bears the burden of proof.

In a procedure before the CAA under the AUPMR, the advertiser bears the burden of proof.

There are no specific rules regarding burden of proof in procedures before the JARO, though, in practice, the advertiser bears the burden of proof.

Remedies

What remedies may the courts or other adjudicators grant?

The courts may grant an injunction, damages and other remedies, such as publishing additional advertisements to correct an original misleading representation, or making a public apology if there is sufficient cause.

The CAA may issue a cease-and-desist order against the advertiser. Such order includes, in practice, an injunction to restrain the advertisement; necessary measures to prevent reoccurrence of the misleading advertising; a public notice of the above measure through newspapers; and requiring that all planned future advertising be submitted for approval.

Length of proceedings

How long do proceedings normally take from start to conclusion?

The injunction process usually takes a few months in court (both parties are involved); a court proceeding related to damages and other remedies would generally take one to two years from start to conclusion.

Procedures through the CAA or the JARO would generally take two to six months, depending on the case.

Cost of proceedings

How much do such proceedings typically cost? Are costs and legal fees recoverable?

Judicial proceedings cost about ¥500,000 to ¥1 million (legal fees, depending on counsel) plus ¥2,000 (court costs) for an injunction; and approximately ¥1 million to ¥2 million (legal fees) plus ¥10,000 (if the amount claimed is up to ¥1 million) or more in relation to an action for damages and remedies, depending on the amount of damages claimed. The successful party can recover its court costs, but, in practice, legal fees are not fully recoverable. CAA and JARO proceedings entail low costs, but they are not recoverable.

Appeals

What appeals are available from the decision of a court or other adjudicating body?

Appeal to a higher court is available from the decision of a court. Administrative litigation is available from the decision of the CAA.

Misleading advertising

Editorial and advertising

How is editorial content differentiated from advertising?

There are no such requirements to disclose where advertisers have influenced editorial content.

Advertising that requires substantiation

How does your law distinguish between ‘puffery’ and advertising claims that require support?

Advertising claims generally require support in Japan. If claims cannot be supported, they are generally treated as misleading or untruthful advertising. What might be considered puffery in another jurisdiction can potentially be subject to challenge. See question 17.

Rules on misleading advertising

What are the general rules regarding misleading advertising? Must all material information be disclosed? Are disclaimers and footnotes permissible?

Misleading advertising is considered to occur in the case of any representation:

  • by which the quality, standard or any other matter relating to the substance of goods or services are shown to general consumers to be much better than is actually the case or much better than that of other competitors, contrary to the facts, and that thereby tends to unjustly influence customers and impede fair competition;
  • by which price or any other trade terms of goods or services will be misunderstood by general consumers as being much more favourable to them than is actually the case or more favourable than those of competitors, and that thereby tends to unjustly influence and impede fair competition; or
  • that is likely to cause any matter relating to transactions for goods or services to be misunderstood by general consumers and that is designated by the CAA as being likely to unjustly influence customers and to impede fair competition.

Misleading advertising is prohibited in Japan.

It is not necessary to disclose all material information, and footnotes are permissible. There are no specific rules on disclaimers, but it is rare to use disclaimers in advertising, with the exception of tobacco advertising. In tobacco advertising, disclaimers such as ‘light neither means low tar nor low risk’ or ‘mild does not mean mild effect’ are generally used.

Substantiating advertising claims

Must an advertiser have proof of the claims it makes in advertising before publishing? Are there recognised standards for the type of proof necessary to substantiate claims?

It is not necessary to have proof of the claims before publishing, and there are no recognised standards for the type of proof in Japan, but it is advisable to have proof of any claims before publishing if you are going to make any claims that might appear to be misleading.

Survey results

Are there specific requirements for advertising claims based on the results of surveys?

No.

Comparisons with competitors

What are the rules for comparisons with competitors? Is it permissible to identify a competitor by name?

Advertising may use comparisons if the comparison is proven objectively, is supported by evidence and presented correctly and appropriately and is fair in methodology. It is permissible to identify a competitor by name, although it is rare in practice.

Test and study results

Do claims suggesting tests and studies prove a product’s superiority require higher or special degrees or types of proof?

There are no specific degrees or types of proof. However, tests and studies must be objective, must be supported by results and facts, and must be fair.

Demonstrating performance

Are there special rules for advertising depicting or demonstrating product performance?

No.

Third-party endorsements

Are there special rules for endorsements or testimonials by third parties, including statements of opinions, belief or experience?

No. Industry codes of practice generally stipulate that a statement of opinions, beliefs and experience must not mislead consumers, and advertisers use notes on statements such as ‘this is an individual experience and not for everyone’. Endorsement by third parties may not be used without their prior consent and must not mislead consumers. Professional comments, for example, by a doctor or a specialist, must be general and not for a specific good or service.

Guarantees

Are there special rules for advertising guarantees?

No.

Environmental impact

Are there special rules for claims about a product’s impact on the environment?

No.

Free and special price claims

Are there special rules for describing something as free or a free trial or for special price or savings claims?

No. However, there is a special guideline on representation of pricing in relation to the AUPMR issued by the Fair Trade Committee (now taken over by the CAA), and, again, any misleading advertising is prohibited.

New and improved

Are there special rules for claiming a product is new or improved?

No. However, some industry-based fair commission codes only allow the use of ‘new product’ or ‘newly on sale’ for the first six months after a new product is introduced to the market.

Claims of origin

Are there special rules for claiming where a product is made (such as country of origin)?

There is a notice on origin of products under the AUPMR. If a representation of the origin of a product is found to be misleading, the Secretary General of the CAA may order the advertiser to cease the misleading representation and to take necessary measures to prevent such misleading representations.

However, there are no specific rules on representation of origin of products excepting geographic indication (GI) on certain agricultural, forestry and fishery products and foodstuffs.

The Act on Protection of the Names of Specific Agricultural, Forestry and Fishery Products and Foodstuffs (Geographical Indication (GI) Act) entered into force in June 2015. The GI Act provides a system whereby the government protects names of such products as intellectual property. Using a geographical indication or similar indication on any other agricultural, forestry and fishery products and foodstuffs not belonging to the classification of specific agricultural, forestry and fishery products and foodstuffs protected under the GI Act is prohibited; and the Minister of Agriculture, Forestry and Fisheries may order a person who violates the GI Act to take necessary measures, remove or erase the geographical indication or an indication similar thereto.

Prohibited and controlled advertising

Prohibited products and services

What products and services may not be advertised?

Under the Medical Care Act, advertising regarding a medical practice, dental practice, hospital or clinic is strictly limited and comparative advertising, misleading or exaggerated advertising, non-objective advertising (without good evidence) and immoral advertising are prohibited. Advertising of the following details is permitted:

  • details on whether medical professionals are physicians or dentists;
  • the clinical department’s name;
  • the name, telephone number or any information that indicates the location of the hospital or clinic, and the name of the administrator of the hospital or clinic;
  • the days and hours of practice, or whether an appointment can be booked;
  • the names, ages, genders, positions and brief personal records of physicians, dentists, pharmacists, nurses and other medical professionals practising at the hospital or clinic; and
  • other matters related to these people that are prescribed by the Minister of Health, Labour and Welfare as matters that contribute to recipients of medical care making appropriate choices with regard to their medical care.

Advertisements by lawyers, law firms and foreign lawyers were prohibited until 2000. They are now permitted, but still strictly limited in Japan. Regulations on advertising by lawyers and foreign lawyers (Regulation No. 44 of 24 March 2000) and related guidelines prohibit advertising that is false, misleading, exaggerated, comparative, illegal or that infringes regulations of the national bar association and local bar association, or damaging or in danger of damaging the dignity of lawyers, etc. There is no prohibition on media types, but the wording, placement and methods are strictly limited. The advertiser must maintain a record of the advertising for three years. Any local bar association may investigate records of questionable advertising, facts relating to the advertising, order an injunction or take other measures.

Prohibited advertising methods

Are certain advertising methods prohibited?

Spam emails are prohibited under the ASCT. There are no legal prohibitions on subliminal messages. However, the Japan Commercial Broadcasters Association prohibits the use of subliminal effects on broadcasting by its regulation for broadcasting, so in practice it is not possible to broadcast advertising with subliminal messages.

Protection of minors

What are the rules for advertising as regards minors and their protection?

Some voluntary rules (eg, rules on alcoholic beverages and tobacco) prohibit certain advertising to protect minors. In addition, local ordinances on advertising issued by local governments prohibit certain kinds of advertising (eg, advertising of gambling and any immoral advertising).

Credit and financial products

Are there special rules for advertising credit or financial products?

The Financial Instruments and Exchange Act requires a financial instruments business operator to indicate the following information in such advertising:

  • the name or trade name of the financial instruments business operator;
  • the fact that the financial instruments business operator is authorised as a financial instruments business operator, and its registration number; and
  • the matters concerning the contents of the financial instruments business conducted by the financial instruments business operator.

These matters are specified by Cabinet order as important matters that may have an impact on customers’ judgement.

There are also rules against making an indication that is significantly contradictory to facts, or seriously misleading with regard to the outlook of profits from conducting financial transactions and other matters specified by Cabinet Office ordinance.

Therapeutic goods and services

Are there special rules for claims made about therapeutic goods and services?

The Act on Pharmaceuticals and Medical Devices prohibits the following:

  • false or exaggerated advertising in relation to the name, effect or efficiency of medicines, quasi-drugs (whose effect on the human body is milder than drugs), cosmetics, medical equipment and regenerative medical products;
  • advertising that misleads consumers into thinking that a doctor guarantees the effect or efficiency of a medicine, quasi-drug, cosmetic or medical equipment; and
  • advertising that suggests abortion or uses obscene documents or images in relation to medicines, quasi-drugs, cosmetics or medical equipment.

Food and health

Are there special rules for claims about foodstuffs regarding health and nutrition, and weight control?

The Health Promotion Act prohibits false or exaggerating advertising of foodstuffs in relation to maintaining or improving health. The Minister of Health, Labour and Welfare or a chief of a local bureau of health, labour and welfare may recommend advertisers to take measures necessary to correct misleading advertising, and order advertisers to take necessary measures if they do not follow the recommendation. Penalties including imprisonment with labour of up to six months or a fine of up to ¥1 million may apply.

A company may make certain health claims if it is approved by the CAA to state that the particular food product in question has certain health effects as a ‘food for specified health use’ (FOSHU), which refers to foods containing ingredients that are shown to have certain functions for health and are officially approved to claim to have certain physiological effects on the human body. Once approved, this allows the use of a FOSHU seal of approval. The CAA also recommends that FOSHU-approved food advertising include a health advice statement such as: ‘Our eating habits should be based on a staple diet, a main dish and side dishes, and balanced eating.’ Approval to make the above-mentioned health claims does not, of course, allow the company to make exaggerated or false claims, which can attract punishments including imprisonment with labour of up to six months and fines of up to ¥1 million, although this would most likely come after governmental warnings and orders.

Alcohol

What are the rules for advertising alcoholic beverages?

There is no specific legislation on alcohol advertising, and alcohol advertising in Japan is regulated only via voluntary rules adopted by the industry (the Commission on Alcohol Beverages, which consists of nine major beverage groups).

These voluntary rules basically stipulate:

  • the prohibition of alcohol-related TV advertisements from 5am to 6pm, with some exemptions such as adverts warning about the effects of drinking (eg, for minors or pregnant women), and adverts aiming to improve the company’s corporate image through, for example, emphasising its commitment to social responsibility;
  • alcohol adverts shall follow only after TV or radio programmes that have been confirmed as having an audience of which 70 per cent or more are of drinking age (20 years or older in Japan);
  • characters and celebrities appealing to the younger generation may not be used;
  • warnings must be provided for pregnant women and nursing mothers (that alcohol may have a harmful influence on their embryos or babies);
  • a warning to minors such as ‘you can drink after you are 20 years old’ or ‘minors’ drinking is prohibited by law’ must be included; and
  • the above warnings must be given in a specified manner in terms of, for example, wording, point size of type and timing of the warning.

In addition to the above voluntary rules, pregnant celebrities may not appear in alcohol adverts. There are no substantial sanctions under the voluntary rules, though in practice, negative public relations may arise if there is a failure to respect these.

Tobacco

What are the rules for advertising tobacco products?

There are no legal rules on tobacco advertising and packaging. However, the Tobacco Institute of Japan has issued voluntary rules on advertising and the industry obeys these rules. The voluntary rules essentially:

  • prohibit TV, radio, cinema and internet advertisements, with some exemptions, such as where it is technically possible to target adults only;
  • prohibit the use of signboards in public places, with exemptions around tobacco stores, vending machines and smoking places;
  • prohibit the targeting of minors;
  • prohibit the use of characters and celebrities appealing to the younger generation;
  • require health warnings, including on the quantity of tar and nicotine; and
  • provide for the format of the above warning, for example, wording, point size of type and package design.

Gambling

Are there special rules for advertising gambling?

There are no special rules for advertising gambling. Legally, gambling is only permitted if supervised by a national government body, and illegal gambling is, of course, not advertised. Advertising gambling is under general advertising voluntary regulations.

Lotteries

What are the rules for advertising lotteries?

There are no specific rules for advertising lotteries.

Promotional contests

What are the requirements for advertising and offering promotional contests?

There are no specific rules for advertising and offering promotional contests.

Indirect marketing

Are there any restrictions on indirect marketing, such as commercial sponsorship of programmes and product placement?

No.

Other advertising rules

Briefly give details of any other notable special advertising regimes.

Generally, the right to advertise is protected by the Constitution as an example of freedom of speech in Japan. Political advertising is freely done in practice, unless the advertising infringes the rights of others.

Election candidate advertising through social media (which was previously prohibited) is now permitted, and some candidates and political parties use social media actively for election campaigns.

Social media

Regulation

Are there any rules particular to your jurisdiction pertaining to the use of social media for advertising?

There are some self-regulatory rules in Japan. The ‘WOMJ Guideline’, prepared by the Word of Mouth Japan Marketing Association in 2017 and the ‘Moral Manifesto for Internet Advertising and Guideline for Publication’, prepared by the Japan Interactive Advertising Association in 2015 are the main self-regulatory rules on advertising and marketing related to social media in Japan.

Have there been notable instances of advertisers being criticised for their use of social media?

Advertising agencies that put false ‘word of mouth’ comments on evaluation websites (eg, restaurant recommendation sites) have come under intense pressure in recent years for the untruthful use of social media, and many such agencies have changed their methods of advertising.

Are there regulations governing privacy concerns when using social media?

There are no specific regulations governing privacy concerns. However, the Act on the Protection of Personal Information and the respective guidelines also apply to the use of social media.

Update and trends

Recent developments

Updates and trends

Conscious or unconscious bias on race, gender or both in advertising has recently been criticised in Japan. For example, advertising using publicity of Naomi Osaka, a famous tennis player whose father is from Haiti, as a character of a popular cartoon, ‘the Prince of Tennis’, was criticised as discrimination because her skin colour in the animation was portrayed as being lighter than in real life(ie, ‘white-washed’). The advertiser ceased to use the advertising and issued a public apology in which a spokesperson for the company said: ‘There is no intention of whitewashing. We were not sensitive enough and will pay more attention to the diversity issue in the future’.

A famous department group has been criticised for gender and sexual discrimination by using advertising in which a popular actress is portrayed as walking in on a situation where many cream pies are flying around and, as a pie bumps against her face, the following text appears: ‘We don’t need an “Age of Women”, do we? Being forced to do something because you’re a woman. Being ignored because you’re a woman. Being marked down because you’re a woman. Having the news talk about how difficult it is to live as a woman. Every time those things happen, the “Age of Women” gets pushed farther away.’.

This kind of emotive message is used to attract attention from target customers. However, public criticism of advertising can lead to the withdrawal of advertising or damage a company’s reputation in Japan, irrespective of the legal circumstances.

Advertisers should be aware of the potential for reputational damage arising from bias in advertising, even if there is no regulation to prohibit the particular expressions.