China New Internet Advertising Regulation-What Do You Need to Know

On February 25, 2023, the State Administration for Market Regulation released the Measures for the Administration of Internet Advertising (Measures), which will come into effect on May 1, 2023, and replace the Interim Measures for the Administration of Internet Advertising. The Measures aims to provide more transparency, user rights protections, and responsibilities for advertising agents, advertising publishers, and platforms in China. It covers various forms of online advertisements, including pop-up advertisements, open-screen advertisements, livestreaming advertisement, “soft text advertisements”, internet advertisements containing links, auction ranked advertisements, algorithm-recommended advertisements, internet live broadcast advertisements, and covert advertisements.

I. Transparency and Protection of User’s Rights, Including Minors

The Measures in China place a strong emphasis on transparency and the protection of user rights, particularly for minors. The requirements mandate clear labeling of advertising, specifically internet advertisements, to be identifiable, enabling consumers to distinguish them as advertisements. This includes any soft text advertising that has purchase methods attached, which must be labeled as advertising.

The Measures also prohibit publishing advertisements for certain products on internet media aimed at minors. These products include medical treatments, medicines, health foods, formula foods for special medical purposes, medical devices, cosmetics, alcohol and beauty products, as well as online games that are not conductive to the minors’ physical and mental health.

The Measures require that the use of the internet to publish or send advertisements must not affect users’ normal use of the internet. Users must not be deceived or misled into clicking or browsing advertisements through false system or software updates, error reports, cleanups, notices, false signs such as playing, starting, suspending, stopping, returning, false promises of rewards, or other methods to deceive or mislead users into clicking or browsing advertisements.

Without the user’s consent or request, advertisements or advertising links must not be attached to the e-mails or internet instant messaging information sent to users. These Measures are in place to protect users from unwanted or misleading advertising, ensuring transparency and fairness in the advertising industry.

II. Requirements on Various Forms of Internet Advertising

Soft Text Advertising

When promoting goods or services through "soft text advertisements" such as knowledge introduction, experience sharing, and consumption evaluation, and purchase methods such as shopping links are attached, the advertisement publisher must conspicuously indicate "advertisement" to clearly distinguish it as such.

Prohibition on Covert Advertising for Certain Products

The Measures prohibit the covert publishing of advertisements for certain products such as medical treatments, medicines, medical devices, health foods, and formula foods for special medical purposes, in the form of introducing health and wellness knowledge. When introducing health and wellness knowledge, information such as the address or contact information of commodity operators or service providers and shopping links related to these products must not appear on the same page or at the same time.

Pop-up Advertisements and Open Screen Advertisements

Pop-up internet advertisements are required to have a clearly marked closing sign that allows for one-click closure. Advertisers and publishers are prohibited from engaging in any behavior that affects one-click closing, such as having no closing sign or requiring multiple clicks to close. The closing sign should not be false, unclear, or difficult to locate. Obstacles to closing advertisements should not be created by advertisers and publishers. Advertisements should not continue to pop up after being closed, affecting the user’s normal use of the internet. These requirements also apply to app-opening ads displayed when launching an internet application.

Auction-ranked Advertisements

Auction-ranked advertisements must not be inserted into the results of searches for government service websites, web pages, internet applications, official accounts, and so forth. For auction-ranked goods or services, the advertiser must clearly indicate "advertisement" to distinguish it from natural search results.

Advertising Pushing to Smart Devices

Without the user's consent or request, or with the user's explicit refusal, internet advertisements must not be sent to their vehicles, navigation equipment, smart home appliances, and other smart devices.

Algorithm-Recommended Advertisements

The Measures requires that when algorithm recommendations are used to publish internet advertisements, rules related to algorithm recommendation services and advertising records must be recorded in advertising archives.

Live Streaming Advertising 

The regulation of live streaming advertising is further emphasized in the Measures. When promoting goods or services through live streaming on the internet, which constitutes commercial advertising, product sellers or service providers must fulfill the responsibilities and obligations of an advertiser. Live streaming room operators and live streaming marketers who provide advertising services must fulfill the responsibilities and obligations of advertising agents and publishers. When live streaming marketers recommend or certify goods or services using their own name or image, constituting advertising endorsements, they must fulfill the responsibilities and obligations of advertising endorsers.

Prior to the issuance of the Measures, specific codes of conduct were already in place for live streaming advertising in China. For more information on these regulations, please refer to our previous articles: http://blog.galalaw.com/post/102gbsn/code-of-conduct-for-online-livestreaming-marketing-issued-in-china and http://blog.galalaw.com/post/102gcxu/china-strengthens-supervision-of-online-live-streaming-marketing-activities-throu.

III. Responsibilities of Advertisers, Advertising Agents, Publishers, and Platforms

Advertisers have a responsibility to ensure the authenticity of internet advertising content, whether publishing on their own or through advertising agents and publishers. When publishing advertisements on their own, advertisers must comply with all relevant laws and regulations, including those pertaining to qualifications, licenses, and cited content for advertising. Advertisers must maintain advertising archives and promptly update them, keeping relevant records for at least three years from the end of the advertisement. When entrusting the publication of internet advertisements to agents and publishers, advertisers must notify them in writing or using other confirmed methods when revising advertisement content.

Advertising agents and publishers are required to establish, improve, and implement registration, review, and archive management systems for internet advertising businesses. This includes verifying and registering advertiser information, such as true identity, address, and contact methods, establishing advertising archives, periodically checking and updating them, and verifying supporting documents and advertisement content. They must not provide services for or publish advertisements with incomplete or inconsistent supporting documents or content that violates advertising laws and regulations. Advertising agents and publishers must allocate advertising review personnel familiar with advertising laws and regulations or establish advertising review bodies. They must cooperate with market regulatory departments in investigating the internet advertising industry.

When publishing internet advertisements with links, advertisers, advertising agents, and publishers must check the content of advertisements related to front-end advertisements in the next level of links.

Internet platform operators are required to take measures to prevent and stop illegal advertisements. This includes recording and storing the real identity information of users who publish advertisements for at least three years, monitoring and investigating the content of advertisements, and employing measures to stop illegal advertisements. Platform operators must also establish effective complaint and reporting mechanisms, cooperate with market regulatory departments in investigating illegal conduct, and use measures such as warnings, suspending or terminating services for users who publish illegal advertisements. They are prohibited from using technical means or other methods to obstruct market regulatory departments’ advertising monitoring.

IV. Liabilities 

While the Measures mainly refer back to the legal liabilities outlined in advertising law, they do introduce some new provisions. For example, the Measures provide penalties for advertising publishers and platforms that fail to cooperate with market supervision and management departments during investigations. Additionally, technical monitoring records of internet advertising by market supervision and management departments can be used as evidence for imposing administrative penalties or taking administrative measures against illegal advertisements. Administrative penalty decisions made by market supervision and management departments in accordance with the Advertising Law and these Measures should be publicly disclosed to society through the National Enterprise Credit Information Publicity System in accordance with the law. This public disclosure adds an additional layer of accountability for companies found to have violated advertising laws and regulations.

V. Takeaway

The Measures aim to increase transparency and protection of users rights in the online advertising industry. It covers various forms of online ads and outlines obligations for advertisers, publishers, and platform operators. As international brands conduct online advertising campaigns in China, it is essential to be aware of these regulations to ensure compliance with local laws and avoid any penalties or negative impact on their brand image. As the online advertising industry in China continues to evolve, it is anticipated that self-regulation and the establishment of industry standards will play an increasingly important role in shaping its development.