When celebrities endorse, are they ad publishers?

By Yu Rong and Hou Shuai, Hylands Law Firm
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Celebrities generally are involved in traditional advertising activities as advertising endorsers. With the emergence of we-media, a celebrity may use this platform for product popularization in the course of endorsement. They may advertise the brands via Weibo, Taobao Live and other we-media. At this time, the celebrity may be involved in the behaviour of advertisement publishing. In comparison to the identity of advertising endorsers, laws provide special obligations and liabilities of advertisement publishers. Therefore, it is significant to understand whether a celebrity’s behaviour in the course of endorsement justifies him/her as an advertisement publisher.

Identification of an advertisement publisher in the circumstance of brand promotion by we-media. In accordance with article 2 of the Advertising Law and article 11 of the Interim Measures for the Administration of Internet Advertising, a person who meets all of the following four conditions will be identified as an advertisement publisher: (1) an entity other than the advertiser; (2) conducting the activity of advertisement publishing (including push and display); (3) being able to check the contents of the advertisement; and (4) having the right to decide on ad publishing.

Yu Rong Partner Hylands Law Firm
Yu Rong
Partner
Hylands Law Firm

In the course of endorsement, a celebrity may recommend goods or services to the public through his/her we-media accounts, and such behaviour justifies him/her as an advertising endorser. In the meantime, as a celebrity has the right to operate his/her we-media accounts, he/she is able to check the content published by these accounts and decide on publishing of the content or not. These behaviours justify this celebrity as a publisher of internet advertisement.

Under such circumstances, a celebrity has a dual identity of advertising endorser and internet advertisement publisher. He/she should fulfil the obligations and assume corresponding liabilities of these two different identities. Therefore, it is necessary for a celebrity to understand his/her special obligations and liabilities as an advertisement publisher.

Obligations and liabilities

In accordance with the above-mentioned Advertising Law and interim measures, the major obligations and liabilities of an advertisement publisher include:

Obligation of advertisement examination. (1) Check certifications and examine advertisement content. A celebrity, as an advertisement publisher, shall check related certifications and examine advertisement content as per applicable laws and administrative regulations, and should not publish advertisements with inconsistent content or with incomplete certifications.

Hou Shuai Associate Hylands Law Firm
Hou Shuai
Associate
Hylands Law Firm

The celebrity should first check the types, quantities, sources, authenticity, legality, and effectiveness of the certifications, including not only the qualification of the advertiser, but also the qualifications of the good or service concerned (e.g., food business licence, etc.). Second, as an advertisement publisher, the celebrity should check the advertisement content for authenticity and legality, including but not limited to whether the information of the good or service advertised is consistent with the actual conditions, whether the advertisement contains the content or is placed under circumstances that violate the Advertising Law.

If a celebrity violates these obligations as an advertisement publisher, he/she faces the risk of penalties and other administrative punishment. If the advertisement he/she publishes is false, the celebrity may be requested to compensate losses, his/her income from advertisement publishing may be seized, and he/she may be penalized. He/she may even be held criminally liable. In addition to false advertisement, if the celebrity knows that the advertisement published is otherwise illegal (e.g., illegal content), he/she may be subject to administrative punishments including seizure of income from advertisement, penalties, etc.

(2) Build advertisement archives and a system. A celebrity who publishes internet advertisements should, in accordance with applicable rules of the state, establish and improve the management system for the acceptance registration, examination, and archives of advertising transactions (article 34 of the Advertising Law). Otherwise, he/she faces the risk of being ordered to make corrections, penalties, etc.

(3) Designate examination staff or an examination body. Internet advertisement publishers should be equipped with advertisement examination staff who are familiar with laws and regulations on advertisements, or set up a dedicated advertisement examination body (article 12, paragraph 3 of the interim measures). The Advertising Law and the interim measures, however, do not specifically provide corresponding legal responsibilities.

Obligation of identifiability. When a celebrity publishes an internet advertisement as a publisher, he/she should ensure that the advertisement is identifiable and enables consumers to identify it as an advertisement (article 14 of the Advertising Law). Otherwise, he/she may bear the risk of penalties.

Other obligations. In addition to the above-mentioned obligations, a celebrity who publishes an internet advertisement should also fulfil other obligations under the Advertising Law. For example, the advertisement publisher should publish his/her fee rates and fee collection methods (article 35 of the Advertising Law). The advertisement publisher should also ensure that the coverage rate, audience rating, click rate, circulation, and other data provided to his/her advertisers and advertising agents are true (article 36 of the Advertising Law).

Conclusion

To conclude, when a celebrity promotes a brand through we-media in the course of advertisement endorsement, his/her behaviour justifies him/her as an internet advertisement publisher. Celebrities should fulfil the special obligations of advertisement publishers, including the examination obligation, advertisement identifiability obligation, etc. The authors note that, though the applicable laws and regulations provide the obligations of advertisement publishers mainly for non-natural person entities (institutional improvement, manning, publishing of fee rates, etc.), they do not provide the exceptions for publishing of internet advertisement by natural persons through their we-media accounts.

Therefore, when a celebrity uses we-media to promote a brand for an advertiser, he/she should actively fulfil the obligations of advertisement publishers provided by the above-mentioned laws. The specific practice methods and law enforcement standards are yet to be further clarified in combination with practice.

Yu Rong is a partner and Hou Shuai is an associate at Hylands Law Firm

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