May 19, 2015, New York – Responding to changes in the marketplace and the increasing importance of the internet to advertisers, China recently enacted its first major changes to its advertising laws in twenty years. The updates to the law address a wide range of topics, including online advertising, health claims, celebrity endorsers, and false advertising. The changes, which were passed by the Standing Committee of the National People's Congress, will take effect on September 1, 2015.

"The new adverting law is a much-needed update to the outdated existing rules," said Justina Zhang, GALA's China member and a Partner at TransAsia Lawyers in Beijing. "Although there are a variety of new rules that some industry participants may find limiting, we expect that most advertisers will welcome the greater consistency and predictability that should result from both the new advertising law and the various implementing rules and guidance that will inevitably follow in the coming months and years."

Some of the highlights of the changes include:

  • The law now explicitly covers online advertising;
  • Telecommunication, internet service providers, and websites have obligations to remove advertisements that they know or should have known are illegal;
  • Dietary supplement advertising must not imply that products are "necessary" for good health;
  • Baby formula advertisements cannot claim to replace breast milk, even in part;
  • Limitations on the use of advertorial type content to present health information;
  • Prohibitions on the use of endorsers in many types of health-related advertising;
  • Broadening of the definition of "advertising" and "false advertising";
  • Restrictions on children's advertising; and
  • Restrictions on tobacco advertising.

The new law also makes celebrity endorsers liable for certain consumer claims and encourages the industry to engage in self-regulation.

"China's changes to its advertising laws will have significant impact on advertisers," said Jeffrey A. Greenbaum, GALA Chairman and Managing Partner at Frankfurt Kurnit Klein & Selz in New York. "As advertisers continue to look to China as an increasingly important market, it's critical that they plan ahead to ensure that their advertising complies with these new restrictions."

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