False or Misleading Publicity Become the Focus of Crackdown in China’s Cosmetics Industry

With the introduction and implementation of the Cosmetics Supervision and Administration Regulation (hereinafter referred to as “CSAR”) and its supporting regulations and policies, market regulation authorities at all levels in China are gradually strengthening the oversight of the cosmetics industry. According to incomplete statistics, from June to August 2021, more than 20 cosmetic companies were penalized for false or misleading publicity, including international beauty giants, Chinese domestic brands, wholesalers, and even online platforms.

Specific administrative penalties are as follows:

Types of Illegal Acts	Specific Cases	Basis for Punishment
False advertising	The advertising fabricates the product is tested and recommended by a social media influencer.	Anti-Unfair Competition Law
False or misleading claims	The SPF advertised on the webpage of the product is inconsistent with the actual SPF.
	The ingredients in the product advertising are inconsistent with those on the label.
	The product claims efficacies such as "improve acne marks in 4 weeks" and "enhance skin's self-healing power in 12 weeks" but fails to provide relevant evidence, which is suspected of misleading consumers.
	The product exaggerates its efficacy and misleads consumers by claiming "promoting wound healing," "removing wrinkles," etc.
	The product uses different colors, font sizes, and notes in different areas on the package to highlight the claim "eliminate 99% bacteria" to catch consumers’ attention. However, such claim has not been scientifically proven.
	The product improperly compares itself with medical products in efficacy.
Inaccurate and unclear description of the product function	The product equates the efficacy of "repairing the skin barrier" with "repairing the skin."	Advertising Law
Use of absolute terms	The product advertising uses absolute words such as "top" and "best choice."
Use of medical terms	The product claims its "anti-inflammatory" function.
False advertising	The product claims efficacies such as "36 times of water retention capacity" but cannot provide a scientific and effective evifence.
	The product is advertised as "anti-wrinkle" but has no "anti-wrinkle" effect.
	General cosmetics claim the efficacies of special cosmetics, such as "whitening," "freckle-reducing," "sun protection," "reducing hair loss," etc.

In sum, the administrative penalties are primarily based on the Anti-Unfair Competition Law. As for the types of illegal acts, “false or misleading advertising” occupies the majority, among which “lack of efficacy basis or exaggerated efficacy” was the leading cause of punishment.

To better cope with the future supervisions and avoid unnecessary economic losses, ChemLinked suggests cosmetic stakeholders taking the risk control measures below:

Fully comply with China’s new cosmetic regulations concerning claims and advertising, such as CSAR, Standards for Cosmetic Efficacy Claim Evaluation and Administrative Measures on Cosmetics Labeling, carry out self-inspection and rectification, and correct irregular publicity behaviors as soon as possible, to maintain corporate reputation and brand image.
Pay attention to cosmetic efficacy claims. For products in the process of efficacy evaluation, they shall ensure that the evaluation results are scientific, accurate, and reliable. For notified products whose efficacy claims have not been validated, they must conduct efficacy claim evaluation and upload the evaluation abstracts within the given time limit. For the efficacy that cannot be supported by efficacy claims evaluation report, it should not be used in the advertising.
Ensure that the product’s packaging and advertising content comply with the Advertising Law, and avoid the use of fictitious, exaggerated, and absolute terms, as well as medical terms or other expressions that are inconsistent with the actual situation and may be easily misunderstood by consumers; make an internal negative list of advertising terms in the company based on product characteristics combined with the provisions of the Advertising Law, and timely update it.
Ensure that the sales and product promotion behaviors of business operators comply with the relevant provisions of the Anti-Unfair Competition Law; avoid conducting any false or misleading commercial publicity to defraud or mislead consumers in respect of the performance, functions, quality, sales, user comments, and honors of the commodities; and not fabricate or disseminate false or misleading information to damage the goodwill or product reputation of competitors.