[Legal Focus] ⑩ K-Brands Entering China—Advertising Copy Can Trip Them Up

Penalty surcharges possible for using exaggerated or absolute expressions
Understanding local advertising law is the first step to success

Recently, as a growing number of domestic (K) brands enter the Chinese market using short-form platforms such as Xiaohongshu and TikTok and live commerce, there is a point that thorough advance review of local advertising law is necessary. This is because using advertising copy commonly used domestically as-is can result in legal sanctions such as account suspension or heavy fines.

Jang Jin-eol, a foreign attorney (China) at Daeryun LLC, said on the 5th that Chinese advertising law strictly restricts the use of absolutized expressions, so domestic companies need to be especially careful.

Article 9 of China's Advertising Law prohibits, in principle, the use of superlative expressions that can mislead consumers, such as "national-level (國家級)," "top-grade (最高級)," and "best (最佳)." In Korea, expressions such as "the best moisturizing power" and "national item" are used as common marketing phrases, but in China, a violation can result in a fine of 200,000 yuan (about 43 million won) up to a maximum of 1 million yuan (about 210 million won).

Management of online advertising is also being further strengthened. Under the "Live Commerce Supervision and Management Measures (直播電商監督管理辦法)," which took effect in February this year, platform operators have come to bear obligations for real-time monitoring and risk factor management. Accordingly, he explained that an environment has been created in which exaggerated expressions or absolutized terms without objective grounds can be caught more easily than before.

On top of this, the activity of so-called "professional counterfeit-fighters (职业打假人)"—who find false advertising and demand settlement money on the pretext of reporting to the authorities—is also cited as another risk for companies.

Attorney Jang advised that companies preparing to enter the Chinese market should establish a legal review system for advertising copy from the marketing stage.

He explained that using objective figures, presenting the evaluation results, test conditions, and report numbers of an accredited testing institution together, instead of abstract expressions such as "the best" or "the optimal," is a safe method.

He also emphasized that managing contracts with wanghong (influencers) or MCNs during live commerce operation is important. He said that, given the nature of real-time broadcasting, there is a possibility of receiving an administrative disposition due to a host's impromptu remarks or unapproved exaggerated expressions, so it is necessary to use pre-verified scripts and to specify damages-related clauses in the contract.

However, the administrative fine itself cannot be transferred to another party by contract, and a damages clause can only be used as a basis for exercising the right of indemnity in a subsequent civil action.

Attorney Jang said, "Establishing an advance response system—such as thoroughly managing the advertising disclosure obligation of review or review content that includes purchase links—is important for preventing unnecessary legal disputes in the Chinese market."

Reporter Jung Ye-jin yejin0311@inews24.com

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