A fresh set of proposed regulations seeks to tighten control over how pharmaceuticals, medical devices, health foods and foods for special medical purposes can be advertised and how ads are reviewed prior to publication.
Where violations are identified, platforms would be required to issue warnings, restrict traffic, suspend livestreaming activity and maintain records of offending parties.
A live streamer would be considered in violation, for example, if disguising a promotion of health foods, foods for special medical purposes (FSMP), pharmaceuticals and medical devices as health and wellness information or if celebrity endorsements are used in the livestreaming sale. Platforms are also prohibited from offering paid traffic-promotion services for livestreams marketing products in the designated categories.
The draft “Measures for the Administration of Advertisement Review of Drugs, Medical Devices, Health Food and Food for Special Medical Purposes” is currently open for public consultation until June 15. Once implemented, it will replace the temporary measures implemented on March 1, 2020, which do not explicitly regulate livestream commerce.
Platform action against false health and weight-loss advertising
According Douyin’s official E-commerce Security and Trust Center, the livestreaming platform carried out a three-month enforcement campaign—removing or penalizing some 43,000 influencers and 793 sellers for using the platform to push exaggerated or fake weight-loss claims.
Keeping up with changing consumption
The SAMR indicated that the newly draft rules are intended to keep pace with evolving consumer behavior and the associated challenges, particularly those driven by livestream commerce.
“Since its implementation on March 1, 2020, the temporary measure has played an important role in regulating advertising activities for these products and protecting the legitimate rights and interests of consumers,” the regulator stated in the explanatory notes to its proposal.
“However, in practice, some problems of incompatibility and imperfection have also emerged. In particular, the rapid development of new business formats such as online live streaming and short videos has brought many challenges to the review and management of advertising for these products.”
The current draft further stipulates that livestreaming platforms that knowingly fail to prevent or stop unlawful livestreaming activities to a stop may be subject to penalties pursuant to Article 63 of China’s Advertising Law.
Increasing popularity of livestream shopping
Livestreaming has become an increasingly popular channel for purchasing health foods and supplements purchase in recent years. Companies such as GNC China have successfully driven sales growth through livestreaming on Douyin, particularly as foot traffic to offline pharmacies has declined.
Stipulations for advertisement review
The draft regulations also set out circumstances in which advertising review is not required, as well as timelines for regulatory processing.
Review is not needed where companies objectively display product names, packaging, prices, specifications or other information mandated by law on label—whether communicated on their premises or e-commerce sales pages.
For advertisements subject to review, authorities must notify applicants of acceptance or rejection within five working days.
If corrections are required, applicants would have to revise submissions within 10 working days of notification, failing which the application would be deemed abandoned.
