China's New Advertising Law Sparks Jokes, and Confusion

The Latest Chinese Crackdowns: Superlatives and Celeb Endorsements

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BYD joked on Weibo about China's crackdown on superlatives in ads.
BYD joked on Weibo about China's crackdown on superlatives in ads.

China just overhauled its advertising law, and a lot of jokes are going around about a measure cracking down on superlatives. Companies boasting that their products are "the best" now face potentially big fines. On social media, brands had fun wisecracking about it.

Didi Kuaidi, the homegrown Uber competitor backed by internet giants Alibaba and Tencent, wrote on microblogging platform Weibo that its car-hailing service is "so fast it violates the advertising law."

Chinese electric automaker BYD, which is partly owned by Warren Buffett's Berkshire Hathaway, ran a photo of a sedan with the caption: "Its beauty cannot be described with several superlatives." Proya, a local cosmetics and skincare brand, quipped, "Sorry! Now we can only be the second-best."

Big changes

Joking aside, there is concern in the industry about exactly how authorities will construe some measures that leave room for interpretation. There are also questions about how strictly it will be enforced.

The law, which took effect Sept. 1, brought a sweeping update to a law that hadn't been overhauled in two decades. It now takes internet advertising into account. It banned all forms of tobacco advertising, promotion and sponsorship – a big step in a country of 300 million smokers, and where powerful tobacco brands even sometimes sponsored schools. It restricts how children can appear in ads, and it tightens the rules on how healthcare products can be promoted.

Superlatives like "the best" and "the most" were already a no-no in Chinese ads, but the new law has more teeth. Breaking it can bring fines of up to $157,000.

Authorities for now are being very strict on what will pass muster, said Chenghua Yang, CEO of Publicis Shanghai and Guangzhou. Even if a brand uses independent market research to back up a claim of being the "leading" brand in the market, authorities are saying that won't work.

"Everything we submit to the bureau they're saying, no, no, no, at this moment," Mr. Yang said. It's not clear if things are especially strict right now because the law just passed. "It could be short-term, but it could be long-term too," he added.

Another new provision is that children under 10 are not allowed to be endorsers. Lawyers say their understanding is that should apply to celebrity children using their influence to tout brands or products. But there's some concern that it could be interpreted more loosely – for example, banning actors under age 10 from toy ads.

"All the infant milk, toys and medicine, how can you illustrate that without a kid?" Mr. Yang said. " It's quite confusing at this moment."

Another source of perplexity is that the offices of the Administration for Industry and Commerce in different cities sometimes differ on what the legal language means, industry insiders say.

For example, there's a lack of agreement on the limits of a new measure requiring endorsers to actually try the products they are touting or be held liable. (So male pop stars are no longer allowed to endorse maxi pads. Yes, that actually has happened.)

But here's a more subtle example: Would that ban apply to a mom endorsing the baby formula she gives her child, and which she is obviously not sipping herself?

One legal advisor for a holding company said an official in Shanghai told her mothers were not allowed to endorse baby milk, while someone in Beijing said that would be no problem. "We need to have more communications with officials, to make sure we are clear on what the regulations mean," she said.

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