Self-Regulation in China

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Self-Regulation in China

• Edward Lehman
• LEHMAN, LEE XU
• 16 November 2007

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Overview of Chinas Advertising Regulatory
Structure
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Before Now
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Business Revenue of ChinasAdvertising from
1990-2006Unit one hundred million Yuan
(RMB)Source State Administration of Industry
Commerce
5
Global Advertising Market Share 2004Source
iReserachGroup
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Functions of Advertising
Administrative Organs
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Administration, Law Execution and
Supervision
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Advertising Administrative Structure

• State Administration for Industry and Commerce
  (SAIC)

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Prior Examination of Ads By Chinese Governmental
Departments
Administration of Radio, Film TV
Ministry of Health
General Admin. of Press Publication
Ministry of Agriculture
Ministry of Info. Industry
Food Drug Administration
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Roles Functions of AICs

• Department of Advertising Regulation of SAIC is
  the competent authority directly under the State
  Council in charge of drafting and enforcing
  regulations and the implementation rules thereof.
  
• AICs are in charge of market supervision/regulatio
  n and related law enforcement through
  administrative means.

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• Any person, either natural or legal, who alleges
  that the advertising operators have infringed
  their legitimate rights and caused damages to
  their properties or other rights may report the
  case to the competent AIC who will grant an
  administrative decision upon the case. Either
  party may appeal to the AIC at the next higher
  level or bring a suit directly to the peoples
  court if they are not happy with the decisions.

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Additional Approvals for Special Products

• Approvals are needed for the advertisements of
  health foods, pharmaceuticals and medical
  equipment from the Administration of Foods and
  Pharmaceuticals.
• Approvals are needed for the advertisements of
  tobaccos and outdoor advertisements from the AIC.
  
• Approvals are needed for the advertisements of
  pesticides and animal drugs from the government
  agencies of agriculture.

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Self-Regulation in China
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China Advertising Association (CAA)

• It is a self-regulatory entity, but to a certain
  extent, supervised by SAIC
• Its main mission is to provide consultation and
  legal opinions to advertising operators and
  agencies set up under supervision of SAIC
• Their opinions are not final but are accepted by
  competent government agencies more often than not
  in view of their experience and connection with
  SAIC

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Advertising Consultation Procedure
Notice of Preliminary Examination comments
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Advantages of Consultation Process

• CAA has close connection with Department of
  Advertising Regulation of SAIC and is abreast of
  legal development and new guidelines
• Consultation process is voluntary
• CAA adopts a two-pronged examination process
• CAA is responsible for rectifying problems that
  arise after consultation authentication

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Ways To Improve Efficiency of Advertising
Self-Regulation

• Entrust more powers and responsibilities to Legal
  Consultative Commission of CAA
• Extend the scope of self-regulation
• Increase transparency and awareness of
  self-regulation
• Establish advertising dispute settlement and
  complaint resolution mechanisms

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Edward E. Lehman Lehman Lee Xu Chinese Law Firm
with a Global Perspective Beijing,
China elehman_at_lehmanlaw.com www.lehmanlaw.com