China Clamping Down on False and Misleading Cosmetic Advertisements

Amidst the backdrop of a recent clampdown on false advertising in which several companies were sanctioned, and public warnings were issued, cosmetic companies have also been reminded of the consequences of using incompliant claims in advertisements and on product labels. According to China’s cosmetic supervision plan, a quantitative rating system will be established for cosmetic companies. Companies with a track record of non-compliance will be the subject of more stringent supervision in the future.

On Nov 15, Chongqing MPA announced that two cosmetic companies were penalized for false advertising, and one of them was levied a heavy fine of 200 thousand RMB. The false advertising mainly involves the use of false efficacy claims e.g., "make skin reborn within eight days regardless of age or skin condition" and inconsistency between the product functions advertised and the product formula, e.g., advertising a cosmetic ingredient, that was not used in the final product.^[1]

In March 2019, a cosmetic brand was fined 20 thousand RMB due to the use of medicinal claims in its advertising. ^[2] In September 2019, two cosmetic companies in Tianjin were punished because of misleading claims. ^[3]

Cosmetic companies are advised to fully comply with Chinese cosmetic regulations concerning claims and advertising to avoid unnecessary financial losses. The following contents in advertisements are prohibited in China:

Functions or efficacy that products do not possess
Direct or implied medicinal or therapeutic efficacy
Misleading wordings
Exaggerated claims

According to the latest version of Cosmetic Supervision and Administration Regulations ^[4], a quantitative rating system will be established whereby companies which violate advertisement requirements will be recorded in a database, and the stringency of compliance requirements will be assigned in proportion to the severity of the violation or an accumulation of several offenses. Basically, companies with a bad record will be critical regulatory targets and subject to strengthened post-market surveillance. China's cosmetic supervision tends to emphasize enterprise responsibility and following from this fundamental principle, in the future, punishments for violations of the advertising law and relevant standards will possibly see the legally accountable person in that company punished individually or as part of a group of company employees.

Reference Links:
[1] A cosmetic company was fined 200 thousand RMB
[2] A False Advertising Case in “Chunlei Activity”
[3] Two Tianjin Companies were fined due to false cosmetic advertising
[4] Cosmetic Supervision and Administration Regulations