On July 4, 2016, the State Administration for Industry and Commerce of the People's Republic of China (“SAIC”) issued the Interim Measures for the Administration of Internet Advertising (“Measures”), which will take effect on September 1, 2016. Composed of 29 articles, the Measures provide the definition for Internet advertisement, specific requirements/prohibitions for Internet advertising activities, and also penalties for non-compliance with the Measures. The Measures appear to apply to both foreign and domestic companies conducting Internet advertising services in China and are subject to local government interpretation. The Measures do not impact Internet advertising in Hong Kong or Macau.
Definition of Internet Advertisements
According to Article 3 of the Measures, internet advertisements refer to commercial advertisements that promote commodities or services, directly or indirectly, via Internet media such as websites, webpages and Internet application programs in the form of texts, pictures, audios, videos or other forms. Internet advertisements include:
1) Advertisements that promote commodities or services in the form of texts, pictures, videos or other forms containing a link or links;
2) E-mail advertisements that promote commodities or services;
3) Paid-search advertisements that promote commodities or services;
4) Advertisements contained in commercial presentations that promote commodities or services; and
5) Other commercial advertisements that promote commodities and services via Internet media.
Certain Requirements for Internet Advertising Activities
The Measures provide specific requirements for Internet advertisement activities. Some examples are cited below:
1) Internet advertisements must be prominently labeled as “advertisement” and the paid-search advertisement should be clearly distinguished from natural search results (Article 7);
2) The advertisements published on webpages in the form of "pop-ups" should be clearly marked with a “Close” sign to ensure a “Click to Close” (Article 8); and
3) An advertisement may not induce users to click on its contents through deception. In addition, an advertisement may not be attached or linked to an email sent to an email user without his/her permission (Article 8).
Relevant Penalties
Articles 21 through 28 provide relevant penalties for violating specific provisions of the Measures. An Internet advertiser will be imposed with a fine of no less than RMB 5,000 and no more than RMB 30,000 if it does label a “Close” sign to ensure a “Click to Close” to the advertisement published on the webpage in the form of pop-up or others.
The Regulation affects any company conducting Internet advertising in the People's Republic of China, including advertising on mobile smartphone platforms.
The above is a brief summary of the Measures for your information. Please feel free to let us know if you have any questions.
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