By You Yunting
The competition in Chinese market is so fierce that the company would strive to make their ads be more outstanding, yet that could also bring them the risks of administrative punishment. In today’s essay, you will see our analysis on the common risk for corporate propaganda.
I. No fulfilling to the promise in propaganda
The most typical case shall be the ads from Beijing Hyundai (note: the link is in Chinese), the joint venture of Hyundai in China. As claimed in the its ads, the chief of the company promised not to reduce the sales price of its vehicle in the coming 2 years, which soon be overthrown by its price adjustment within 120 days after that with the pressure from market competition. On that, we saw the consumer filing a group lawsuit against its break-in of promise. Despite as investigated by the company that, the words of the chief is not quit the same as claimed in the media report, and Hyundai was therefore judged of no liability, the Korean brand faced a devaluing of social reputation in China. In our opinions, the losses of intangible asset of the car maker are much more than the claimed compensation. And that shall mainly lie with the over promise by the company.
It shall also come to the company’s attention that any promise shall be made prudently, for any failure to the fulfilling of it could lead to the liability of false propaganda. And when to be found a bad faith by the consumers, the company could face the lawsuits filed by Contract Law or Consumer Protection Law, mainly arguing the company violated the agreement. Even the company could escape the lawsuit, the company is also face the threat from its competitor publicizing and stressing its failure in obligation performance. Naturally, the company will be put on a hot-seat.
II. The “most” phrases and unfair competition issues
Many companies, especially those online game companies enrolled in fierce competition, prefer to use the big words like “biggest”, “strongest” or “most charming”, yet it is violating the rules and regulations by several legal documents and pull the company itself into the danger of legal punishment. First, Advertisement Law prohibits the using of such words and phrases; otherwise a legal punishment shall be decided on it.
Article 7 of Advertisement Law:
“such words as the “state-level”, the “highest-level” or the “best”shall not be used in the ads”
Second, when the highest level words are used when your products are not among the best, a false propaganda stipulated in Anti Unfair Competition Law, Consumer Protection Law could be found. And the administration of industry and commerce would judge a high penalty on it. The Internet companies are facing more risks on this aspect, for the investigation and treatment by the administration may not limit to the local territory. According to cases handled by us before, the companies admitted in Hangzhou, Shanghai or Beijing have been punished by the authority in Hunan for the “highest level” words prescription and false propaganda.
III. No legitimate origin of the data
As provided in Article 10 of Advertisements Law:
“Data, statistical information, investigation and survey information, digest and quotes used in an advertisement shall be factually true and accurate, and their sources mentioned.”
But since the data quotation is ubiquitous in the company propaganda, the origin of them, either on purpose or with negligence, could be missed or hidden. Like as announced in the ads of a email website, it could “intercept 98% spam, and the mistake rate could be less than one among 1000, 000 chances”, and “filters almost
Unlike traditional media, many websites will not indicate their propaganda posts as the ads, but that does not mean it could be free from the ruling by Advertisements Law, Consumer Protection Law, Product Quality Law and Anti Unfair Competition Law. And by these laws, any improper of informal advertisement could lead to the group litigation or the exposure of the competitor. What’s worse to the company, it could also face the administrative punishment. Therefore, we suggest the companies to consult with the professional legal service institute before the launch of their own propaganda when necessary.
Other recommended posts on our website:
1. The Actual Term of Trademark Registration in China
2. How to Apply for the Trademark Record in China Custom
3. How to improve the success rate of trademark registration in China?
4. Matters for Attention in Trademark Refusal Review in China
5. Introduction of China’s Legal System of Trademark Renewal
6. Introduction on the Regulations concerning the Capital Contribution in IPR or Domain Name in China
7. The Copyright Registration in China Could Be FREE?
8. China Copyright Protection Term Longer than EU’s?
9. Matters for Attention in the Patent Preliminary Injunction Application in China(I)
Lawyer Contacts
You Yunting
86-21-52134918
youyunting@debund.com, yytbest@gmail.com
For further information, please contact the lawyer as listed above or through the methods in our CONTACTS.
Bridge IP Law Commentary’s posts, including the comments and opinions contained herein, shall not be construed as the legal advice on any issues related. The contents are for general information purposes only. Anyone willing to quote or refer the posts to any other publications or for any other purposes, no matter there’s benefits gained or not, shall first get the written consent from Bridge IP Law Commentary and used under the discretion of us. As to the application of the reprint permission for any of our posts, please email us to the above addresses. The publication of this post or transmission of it through mail, internet or other methods does not constitute an attorney-client relationship. The views set forth here are of due diligence, neutrality and impartiality, representing our own opinions only and are our original works.
Short Link: