On August 24, 2022, the Market Regulation Department of Shanghai Pudong New Area issued the decision to fine Abbott Laboratories Trading (Shanghai) Co., Ltd. 200,000 yuan (around USD 29,000) for the company’s illegal advertising. As revealed by the decision, the company claims in a livestream that two of its products (as shown in the picture above) can stimulate kids’ potential to grow taller and relieve constipation for babies.
The above advertising violates Regulations for the Implementation of China’s Food Safety Law, and China’s Advertising Law. In China, only health foods (similar to the concept of food supplements in other countries) are allowed to bear function claims, such as “relaxing the bowels”. Therefore, the competent authority in Shanghai asked the company to stop such advertising and issued a fine of 200,000 yuan based on China’s Advertising Law.
Involved regulations:
Article 38 of Regulations for the Implementation of Food Safety Law — “No food other than health food may claim health functions.”
Article 9 of Advertising Law — “An advertisement shall be prohibited from … (11) falling under any other circumstances as set out by any law or administrative regulation.“
Elements Worth Attention for Livestream Marketing
Livestreaming has become a major marketing method on China’s e-commerce platform while false promotion and substandard product quality are commonplace there. On June 24, 2020, China Advertising Association unveiled the Livestreaming Marketing Code, which came into effect on July 1, 2020. It is the first document specializing the livestream marketing activities, detailing the requirements for merchants, livestreamers, and livestream platforms. On November 6, 2020, State Administration for Market Regulation (SAMR) issued the Opinions on Strengthening the Supervision of Livestreaming Marketing Activities. Later, in 2021, seven departments in China jointly released Administrative Measures for Livestreaming Marketing (Trial). In addition, there are many regulations on the road, for example, the industry standard Specification for Management & Service of Livestreaming E-Commerce Platform has not been released yet after its consultation in 2021.
During livestreaming activities, all parties still need to adhere to relevant laws and regulations. Just like what is emphasized in SAMR's opinions, the marketing of products shall follow E-commerce Law, Food Safety Law, Advertising Law, Anti-unfair Competition Law, Law on the Protection of Consumer Rights and Interests, etc.
Know more about China's livestream industry in the article China’s Livestream Industry: Market Growth, Regulation, Enabling Technology, and Business Strategies.