[Q&A] Are "Absolute Terms" Stipulated in the Advertising Law Always Prohibited?
2023. 3. 20
[Q&A] Are "Absolute Terms" Stipulated in the Advertising Law Always Prohibited?
As a corporate law firm, we are used to answering many questions from our clients about their business in China. In this series of Q&A articles, we will discuss some of the topics that our clients have shown interest in.
Question: Are "absolute terms" stipulated in the Advertising Law always prohibited?
Answer: Article 9 Clause 3 of China's Advertising Law states that terms such as "national", "highest" and "best" (hereinafter, "absolute terms") shall not be used in advertising. Any infringement carries a minimum fine of RMB 200,000. However, this does not mean that the use of absolute terms is always prohibited. For example, Shanghai, Jiangsu, Zhejiang and other places have issued guidelines listing exclusionary circumstances. In practice, however, due to the lack of clear legal standards for the identification of absolute terms, the scale of enforcement varies from place to place, leading to uneven interpretation and ensuing consequences.
To this end, on December 7, 2022, the ‘Guidelines for the Enforcement of Absolute Terms in Advertising’ (hereinafter referred to as the "Draft for Comments") issued by the State Administration for Market Surveillance and Regulation listed the specific circumstances, in which the absolute term provisions of the Advertising Act do not apply.
The use of an "absolute term" does not apply to the goods promoted by the operator of the goods in one of the following circumstances (Article 4):
(1) if it merely indicates an attitude of service or a business philosophy or corporate culture of the operator of the product;
(2) if it expresses only the purpose pursued by the operator or the product.
"Absolute terms" which refer to goods sold by a goods operator, but do not have the objective effect of misleading consumers or disparaging other operators in one of the following cases (Article 5):
(1) When used solely for the purpose of self-comparative description of goods of the same brand or company and if the expression is true.
(2) Used only to promote advice to consumers, such as the best way, the best time and the best shelf life for using the goods.
(3) Terminology used to classify goods or services according to national standards, industry standards or local standards contains absolute terms.
(4) Absolute terms are contained in trade names or registered trademarks, and trade names or registered trademarks are used in advertisements to designate goods in order to distinguish them from other goods.
(5) The terms shall only be used to promote background information on the goods themselves and their raw materials, and the presentation is accurate.
(6) Awards and titles evaluated according to the respective national regulations contain absolute terms.
(7) Expression of objective circumstances of spatial and temporal order, such as promotion of product sales, sales, market share and other factual information which the advertiser can prove, in specific terms, such as indicating limited time and territory.
The aforementioned rules consist of statutory provisions and are consistent with law enforcement and judicial practice. In the event that a company plans to use "absolute terms", they should study the new provisions appropriately.
However, it is important to note in particular that the above is still in the legislation phase, which represents a trend of the upcoming formal law. We will keep a close eye and expectation on the law that will eventually come into force.
