False Advertising Earns Biggest Fine

Friday, 20 March 2015 09:11

ON 10th of this month, Shanghai Administration for Industry & Commerce (“SAIC”) released a list of 12 typical cases of false and illegal advertising from last year.

Procter & Gamble Co., Ltd. topped the list for making false claim that teeth will turn whiter in just one day in a TV commercial which features Taiwan television entertainer Xu Xidi, better known as Little S, who grins in front of the camera to show the whitening effect of its toothpaste. SAIC proved that the whitening effect were exaggerated by photoshopping, therefore imposed a fine of RMB 6.03million (USD1.3 million), the biggest amount ever imposed for false advertising.

On the list, there is a real estate development company which was fined RMB10, 000 for releasing false information about the route of Subway Line 17 through its Wechat.

Still another on the list was a private hospital which was fined RMB130, 000 for claiming itself to be a modern hospital with comprehensive services including clinical, teaching, health care, prevention, care, rehabilitation, research and one of the first designated Medicare hospitals and located in Shanghai business circles. Those statements proved to be false by SAIC.

The lawbreakers on the list involves enterprises in the washing, real estate, investment advisory, investment banking, medical services, education and training, alcohol, food and other industries, and the mass media used involves television, video websites, product packaging, homemade print, broadcast, Internet websites, Wechat, newspapers, SMS and other traditional and new media.

In 2014, SAIC cracked down on a total of 2,716 false and illegal advertisements, with the fine of RMB74.77 million were imposed. In 2015, Shanghai Administration for Industry & Commerce will further strengthen its scrutiny on false and illegal advertising. Therefore, we strongly suggest the client should engage professionals to review any advertisement before publishing on any mass media to ensure the contents in compliance with related laws and regulations.

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