Business / Industries

Move to clampdown on false ad claims

By Mu Chen ( Updated: 2015-04-27 18:20

National Advertising Data Centers will be set up to regulate the industry

China will clampdown on unlawful and false advertising claims when it launches National Advertising Data Centers on Tuesday in a move to regulate the industry.

Tougher monitoring is being brought in which will cover the traditional media of broadcasting and print. "We have set up sites in 330-plus cities nationwide and at the state levels in order to monitor all traditional media of television, broadcasting and print," Zhang Guohua, head of the Department of Advertising Regulation at the State Administration of Industry and Commerce, said at an industry forum on Monday

The sites will be responsible for 24-hour monitoring of advertising and will compile cases of unlawful advertising claims. These will be submitted on a weekly basis to local regulators for further investigation.

"This system will greatly raise our ability to regulate unlawful advertising and discourage future malpractices," Zhang said.

The announcement came after a revised Advertisement Law was approved on Friday by the Standing Committee of the National People's Congress, the top legislative body, aimed at stricter regulations on the advertising industry.

The revised law also aims to address the chronic problem of unlawful advertising on traditional media platforms by increasing fines on guilty companies and individuals.

Fines of three to five times the value of advertising contracts can be handed out to businesses, media, advertising agencies and brand representatives. Depending on the severity of the case, business operation licenses can be canceled and criminal investigations launched.

According to Zhang, about 30 percent of television advertising is in violation of the law.

China's advertising industry was worth more than 560 billion yuan ($90.32 billion) in 2014, but the sector is going through a transition. Traditional outlets are being challenged by the emergence of Internet advertising.

Increasing numbers of media companies are vying for a share of the market. This is putting pressure on companies to maintain advertising revenue, which can result in unlawful and false practices, said Zhang.

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