Article 58 of the Advertising Law stipulates that advertisers, advertising agents and advertisement publishers may be punished when they violate the provisions of this law. Is the eleventh case “in violation of the provisions of the third paragraph of Article 38 of this law, using natural persons, legal persons or other organizations as advertising spokespersons”, that is, “if the administrative penalty is less than three years old, they shall not be used as advertising spokespersons” retroactive?

If a star is determined by administrative penalty to endorse a false advertisement, the provision of “no endorsement for three years” applies, but the star has signed an endorsement agreement with a third party before, the third party advertiser and the advertising content shot by the third party have no violations, and the endorsement advertisement has started to be released. Since the advertiser is not the object of administrative penalty for false advertising, the star was hired before the occurrence of false advertising, and the advertisements put in have been produced and put on the market long before the false advertising event.

In this case, it is questionable whether the provisions of Paragraph 3 of Article 38 of the Advertising Law should be applied:

If we go back in the past, how do we think that other advertisers know or should know that their spokesmen have been recognized as “no spokesmen for three years” because they have endorsed false advertisements for other enterprises?

Is it also calculated from the date when the administrative penalty decision is made?

If an enterprise in South China hires a spokesperson to shoot an advertisement, and one year later the spokesperson endorses a false advertisement that is only broadcast locally in a prefecture level city in the northwest region, and is later punished by the market supervision administration of the prefecture level city, it is very likely that the enterprise in South China will continue to broadcast the endorsement advertisement that has been made before without knowing the administrative penalty. If the enterprise in South China is punished for this, It is obviously unfair to the enterprise.

The administrative penalty decision made by the market supervision and administration department can apply for administrative reconsideration and bring an administrative lawsuit according to law, which may theoretically overturn the original penalty decision of identifying false advertising endorsement. Therefore, if the determination procedure of “no endorsement for three years” is started on the date when the administrative penalty decision is made and goes back to the past, once the administrative penalty decision is overturned, it will bring a series of derivative injuries and economic losses. In addition, the second paragraph of Article 63 of the Provisions on Administrative Penalty Procedures for Market Supervision and Administration clearly stipulates that “if a public administrative penalty decision is changed, revoked, confirmed to be illegal or confirmed to be invalid according to law, the market supervision and administration department shall withdraw the information of the administrative penalty decision within three working days and publicly explain the reasons”, indicating that there is a possibility of being overturned after the completion of the administrative penalty.

Suppose that the administrative penalty of the endorsement advertisement that has been made before is applied to Item 11 of Article 58 of the Advertising Law because it continues to be broadcast, if the administrative penalty that identifies false advertising endorsement is revoked or confirmed to be invalid according to law, for the compliant enterprise that is punished due to Item 11 of Article 58, the consequences include but are not limited to loss of goodwill, loss of business opportunity cost The cost of re producing advertisements and other losses are huge and may be irretrievable.

The author believes that the provision of “no endorsement for three years” is formulated to restrict and punish the false advertising of celebrity endorsement, rather than to extend the punishment to other law-abiding enterprises that cooperate with the spokesperson.

Pan Xiaoting, the Nine Ball Queen, was involved in a dispute over whether it constituted a false advertisement. The court decided in the second trial that although the contested advertisement constituted a false advertisement, Pan Xiaoting did not constitute a false advertisement. This means that whether it constitutes a false endorsement of advertising can also be determined through court proceedings according to law. The administrative penalty imposed by the market supervision and administration department is not the final result or the only final conclusion. It may be inappropriate to directly apply the “no representation for three years” policy from the date of the administrative penalty and go back to the past.

To sum up, it is popular to prohibit and severely crack down on false advertising, as well as to put an end to celebrity artists’ endorsement of false advertising. The author believes that if the relevant legal provisions can be further refined and operable, it will be more conducive to achieving the original intention and maintaining economic order.

Lawyer Gan Guolong

Senior Partner of Shanghai Zhonghua Law Firm

Practice field:Real estate, company law

Lawyer Gan Guolong has more than 20 years of practical experience in the real estate industry since he worked in Golden Horse Group in 1995.

Some real estate legal items served are as follows:

The whole process legal service of Shanghai COSCO Liangwan City project, the whole process legal service of housing delivery of the “Sensheng Shiyang International Center” project of Shanghai Shunfeng Hotel Management Co., Ltd., the whole process legal service of housing delivery of the “Tongji Jiayuan” project of Shanghai Tongheng Real Estate Co., Ltd., the equity transfer of Shanghai Lvfu Real Estate Development and Operation Co., Ltd Full process legal services for the Shanghai Silicon Thin Film Solar Cell R&D and Production Project (Phase I) of Suntech Power Holding Co., Ltd., Lianyungang Vancouver Garden Project Financing and Bank Entrusted Loan Legal Services Project, special legal services entrusted by Vanke Shanghai Regional Head Office to inspect the legal risks of sales, investment promotion and delivery of projects developed by Wuxi Vanke Real Estate Co., Ltd Provide full process legal services for the land purchase and investment cooperation between China Network Software Global Holdings in Nanjing and Chengdu, and provide legal services for Suzhou Poly Real Estate Development Co., Ltd.

Lawyer Jiang Xiaohui

Double Degree in Law and Economics

Shanghai Zhonghua Lawyer

Lawyer Jiang Xiaohui has successively served as a lawyer in a number of domestic and foreign funded enterprises and listed enterprises, and is familiar with the company’s various legal affairs such as document handling and litigation disputes, especially in the field of biological medicine industry.