March 24, a southern newspaper reported that because of the words “Hangzhou’s best fried snack shop” on Tangchaolizi packaging bags, the Xihu District Market Supervisory Authority decided that the advertisement violated the Chinese Advertising Law. The sugar fried chestnut shop’s boss was fined 元200,000. The punishment sparked controversy.
A common view is that such a small advertising signs on the packaging of many commodities and shops is a relatively common means of propaganda. Additionally, that it really does not mislead consumers, as it is what many Westerners would refer to as mere puffery. Some view puffery as not constituting unfair competition or misleading advertisements and that the punishments for such behaviour are unreasonable.
However, law enforcement agencies are punishing such advertisements on a legal basis. The “Advertising Law” Article 9 states: Advertising shall [not] have the following characteristics:
(iii) Using the ‘national’, ‘most advanced’, ‘the best’ and other [superlative] terms.
A fine of元200,000 is the lowest level of the punishment in the “Advertising Law” provisions.
No matter what citizen or law enforcement officials think of such laws, once the law implemented, it must be unconditionally implemented. Of course, laws are often flawed – they are after all create by men. However, the legislature has the power to amend laws, though this offers cold comfort to those who have already naively violated such laws (and have been fined). This is a situation that law enforcement officials and citizens should accept. So, perhaps we can only view the story of the Tangchaolizi boss as a cautionary tale and use this example to alert other businesses that advertisements can no longer be made without regard to the law.
With the utmost respect for existing laws, I still want to talk about some technical legal issues. Legislators prior to the development of Article 9, probably knew that a large number of small traders use similar superlatives which probably do not mislead consumers. If lawmakers think that this type of advertising puffery by small traders does not need to be punished, they could substitute the words with in Article 9 with something along the lines of “using words that may mislead consumers,” with and attached purpose statement to aid interpretation. This would give law enforcement a certain degree of interpretation and discretion. If lawmakers think the type of ad behaviour discussed should be punished, a wider range of penalties could be used so that small traders are not so seriously affected.
What we have at present is a very mechanical prohibition clause; there is no scope for interpretation. Lawmakers may consider is multi-layered approach: giving law enforcement some room for interpretation and discretion but not too much. If too much discretion were given the law could be misinterpreted or it could be applied excessively and capriciously. This is indeed a dilemma.
We cannot change the law and can only abide by it. Under the new “Advertising Law”, the taboos greatly increase the risk of advertising. Advertisers and publishers have increased responsibilities. A lawyer can be useful to consult in advance of posting advertisements to avoid legal compliance risks. Once published, advertising is difficult to withdraw and can also easily lead to complaints from competitors. Prevention is better than cure.
Chris Fung & Wang Yu