On 4 July 2016, the State Administration of Industry and Commerce (“SAIC“), the regulatory body charged with enforcing, among other things, the People’s Republic of China Advertising Law (revised with effect from 1 September 2015) (“Advertising Law“) released the Administration of Online Advertising Interim Measures (“Interim Measures“; in Chinese <联网广告管理暂行办法>), which will come into effect on 1 September 2016. These will be the first set of national level rules specifically regulating advertising activities through the Internet and other online media. This is in line with the Chinese government’s earlier attempts to regulate virtually all areas of cyberspace, see our previous client alerts here, here and here.
Online advertising has become a massive industry in China, but has recently been dogged by controversy. As described in this article “Increased scrutiny on medical and online advertising after tragic death in China?“, earlier this year, the tragic death of a young student who used a search engine to look for a last-resort medical treatment for his terminal cancer and was given experimental, untried treatment by an institution that came out as the top result in an online search, caused public outrage and an institutional crackdown on alleged manipulation of search results for medical and other forms of online advertising. Notwithstanding further tightening of regulation of the sector under the Advertising Law, further regulation was expected in this area.
The promulgation of the amendments to the Law of the People’s Republic of China on Protection of Consumer Rights and Interests (“Consumer Protection Law“) (effective 15 March 2014) and the increasing assertiveness of Chinese consumers means that companies now need to tread more carefully than ever, and need to review whether their advertisements and terms and conditions are consistent with the new consumer protection and advertising rules.