Chambers Advertising and Marketing 2022 Advertisingandmarketing2022

CHAMBERS GLOBAL PRACTICE GUIDES
Advertising &
Marketing 2022
Definitive global law guides offering
comparative analysis from top-ranked lawyers
Contributing Editor
Arlan Gates
Baker McKenzie
practiceguides.chambers.com
Global Practice Guides
Advertising & Marketing

Contributing Editor
Arlan Gates
Baker McKenzie
2022
Chambers Global Practice Guides
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and law firms across the world. Chambers now offer clients a new series
of Global Practice Guides, which contain practical guidance on doing
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‘Law & Practice’ sections. In addition, the ‘Trends & Developments’
sections analyse trends and developments in local legal markets.
Disclaimer: The information in this guide is provided for general reference

only, not as specific legal advice. Views expressed by the authors are not
necessarily the views of the law firms in which they practise. For specific
legal advice, a lawyer should be consulted.
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Contents
INTRODUCTION CHINA
Contributed by Arlan Gates and Sarah Mavula, Law and Practice p.119
Baker McKenzie p.4 Contributed by Haiwen & Partners
Trends and Developments p.141
BELGIUM Contributed by Haiwen & Partners
Law and Practice p.9
Contributed by Baker McKenzie JAPAN
BOSNIA & HERZEGOVINA Contributed by Baker McKenzie (Gaikokuho Joint
Law and Practice p.44 Enterprise)
Contributed by bh.legal - Law Office Mirna Milanović- Trends and Developments p.161
Lalić Contributed by Atsumi & Sakai
BRAZIL MEXICO
Law and Practice p.65 Law and Practice p.167
Contributed by Inglez, Werneck, Ramos, Cury e Contributed by Arochi & Lindner
Françolin Advogados
Contributed by Arochi & Lindner
Contributed by Inglez, Werneck, Ramos, Cury e
SWITZERLAND
CANADA
Contributed by MLL Legal
Contributed by Baker McKenzie Trends and Developments p.212
Contributed by MLL Legal
Contributed by Baker McKenzie
3 CHAMBERS.COM
INTRODUCTION
Contributed by: Arlan Gates and Sarah Mavula, Baker McKenzie
Advertising and Marketing: 2022 in Review demic, particularly as advertisers embraced

Although the COVID-19 pandemic continues to NFTs as a new means of increasing brand vis-
affect many parts of the globe, for the most part, ibility and secondary revenue streams. However,
it is gradually being left in the past. As consum- increased use of NFTs has uncovered new legal
ers and advertisers return to pre-pandemic life, challenges. For instance, the pervasive use of
there has been a shift in priorities for advertis- NFTs as prizes in contests and sweepstakes
ing regulators around the world. Where attention brought to light new challenges and considera-
was, for a time, focused on combatting prac- tions, such as the question of how to determine
tices that arose as consequences of COVID-19, the approximate retail value of an NFT, which
regulators have returned their primary attention may significantly increase or decrease during
to broader areas of interest, with the pandemic the contest or sweepstakes period, as a result
only accelerating a renewed focus on the digital of the volatile nature of NFT prices. It has been
economy. common for intellectual property issues to arise
as to whether copyrights and/or trade marks
In the last year, there has been an explosion in associated with an NFT have been adequately
novel uses of advertising through the introduc- transferred.
tion of new technologies like augmented reality,
virtual reality (the precursor to the metaverse), Cryptocurrency
non-fungible tokens (NFTs) and cryptocurrency. Cryptocurrency, digital currency in which trans-
Around the world, advertisers’ interest in the actions are processed through a decentralised
digital economy shows no signs of waning. system rather than by a centralised authority,
gained popularity during the pandemic. In light of
So, while general marketing and advertising con- its potential for astronomical returns, regulators
cepts continue to dominate the contents of this around the world have sought to crack down on
guide as they continue to apply to new tech- false and misleading claims, such as those that
nologies, this year’s guide will also explore new resulted in pyramid schemes that promised large
emerging themes of the digital economy, such returns for a small cryptocurrency payment, as
as the regulation of dark patterns and growth well the promotion of cryptocurrency by influ-
marketing, and how new technologies are fun- encers and celebrities.
damentally changing marketing and advertis-
ing concepts and practices. The guide will also Unlike most other forms of new digital tech-
address developing sub-areas of advertising nologies, non-advertising authorities have been
and marketing law, such as greenwashing regu- heavily involved in trying to regulate the adver-
lation and the restriction of disinformation and tising and marketing of cryptocurrency. Earlier
misinformation. this year, the UK’s Financial Conduct Authority
unveiled plans to regulate the advertising and
NFTs marketing of cryptocurrencies by making them
The prevalence of NFTs – the unique digital subject to the same regulations as marketing
assets that connect ownership to digitalised for other financial products such as shares and
items such as works of art, real estate, music insurance. In Canada, provincial securities regu-
or video ‒ continued to rise throughout the pan- lators have indicated their intention to regulate in
4 CHAMBERS.COM
INTRODUCTION
this space, while the Canadian Securities Admin- sons” brings into question whether transparency
istrators and the Investment Industry Regulatory rules apply, and even whether general advertis-
Organization of Canada (IIROC) have published ing rules apply. In the United States, the Federal
guidance on the application of securities legisla- Trade Commission recently proposed an update
tion and IIROC rules to the advertising, market- to the influencer guidance to expand the defi-
ing and social media activities of crypto trading nition of influencers to expressly include virtual
platforms and cryptocurrency service providers influencers, in order to avoid this ambiguity.
(CSPs).
Big tech regulation
Other jurisdictions have taken an even stricter Big tech organisations, as the creators of some
approach. In early 2022, Singapore’s financial of these new technologies, continue to have
regulator issued guidance prohibiting CSPs strong involvement in the advertising and mar-
from advertising their services through any pub- keting on their platforms. In the recent past,
lic channel, including television, billboards and there has been an increasing trend of regula-
social media, permitting them only to advertise tors seeking to crack down on perceived self-
and market cryptocurrencies through their own preferencing.
social media accounts or corporate websites.
In the EU, lawmakers have passed sweeping
Augmented reality and virtual reality legislation aimed at curbing big tech’s influence
Augmented reality, the integration of digital in the form of the Digital Services Act (DSA) and
information and assets within a user’s environ- the Digital Markets Act (DMA), which would fur-
ment in real time, and virtual reality (home of the ther regulate marketing and advertising, includ-
metaverse), provide new and original opportuni- ing by limiting the industry’s ability to favour its
ties for marketers. While existing legal principles products and services through positive rankings.
continue to apply to these new technologies, Under the reforms, big tech gatekeepers, which
they bring about novel issues. are broadly defined and include large search
engines, social networks and video-sharing plat-
An influx of computer-generated influencers forms, would be subject to various transparency
and avatars in consumers’ augmented reality, obligations (such as making the internal work-
and even more commonly in the metaverse, has ings of their advertising and ranking algorithms
reached prominent levels. Unlike human influ- more transparent), ostensibly to level the playing
encers, these virtual influencers are fully con- field for competitors who also use the platform to
trollable and can subtly but persuasively com- advertise competing products and/or services.
municate an advertiser’s messaging, leading to
challenges in ensuring adequate disclosure of US legislators have made a similar move with
material connections. the introduction of the American Innovation and
Choice Online Act, which would take a similar
As these novel practices become more wide- stance. Although the legislation has cleared the
ly known and used, courts and regulators are Senate Judiciary Committee, the bill continues
beginning to address the resulting legal issues to be highly debated in advance of the country’s
in varying ways. In Europe, the fact that virtual approaching 2022 midterm elections.
influencers are generally not considered “per-
5 CHAMBERS.COM
INTRODUCTION
Dark patterns dynamic and pricing discrimination, and the

Dark patterns refer to user interfaces or design proper presentation and qualification of refer-
elements that have been carefully crafted to a-friend programmes with monetary incentives.
obscure, mislead, coerce and/or deceive users
into making unintended and potentially harmful Disinformation and misinformation
decisions. As these tactics rise in popularity in The use of disinformation and misinformation in
certain areas of marketing and advertising, regu- advertising and marketing grew exponentially
lators across the globe have begun to prioritise during the course of the pandemic, as the world
addressing the potential negative effects of dark shifted online. While the rise of misinformation
patterns. online and on social media was first notably
linked to COVID-19, misinformation has been
In the EU, the DSA will ban dark patterns and tied to all elements of life, such as local politics,
misleading practices aimed at manipulating geo-politics and social injustice. As a result of ris-
users’ choices and capitalising on those choic- ing misinformation, regulators around the world
es through advertising and marketing. In the are trying to tackle this issue. For example, EU
US, the Federal Trade Commission released an legislators, through the DSA, have created rules
enforcement policy statement warning compa- for big tech against manipulation that may result
nies against the deployment of illegal dark pat- in fake news and content. These rules create
terns, and it more recently launched a public new expectations for conventional advertisers
consultation aimed at developing guidance on and marketers, particularly those that leverage
the use of dark patterns. influencers and consumer- or user-generated
materials as part of advertising campaigns.
Growth marketing
While growth marketing as a concept has been Greenwashing and environmental claims
around for more than a decade, it has only As consumers become more sustainability con-
surged in popularity in the past few years with scious, advertisers and marketers have increas-
the rise of the digital economy, and it is now ingly focused on advertising the sustainability of
often referred to as the next frontier of market- their products. While this is not a new phenom-
ing. Although growth marketing can be defined in enon, nor one that is yet to receive enforcement
various ways, it is ultimately a marketing strategy attention from regulators, the environmental
focused on sustainably and profitably growing claims today are increasingly viewed through a
a business line by attracting, engaging, and/or real-time lens of climate change and global con-
retaining customers, typically achieved through sequences of environmental decisions.
merging data analytics with rapid experimenta-
tion across various channels (eg, email, websites The advent of a new level of environmental and
and social media). sustainable claims has increasingly become
the subject of regulators’ renewed scrutiny and
Despite the benefits to marketers and advertis- focus across the globe, with a sharp increase in
ers associated with growth marketing strategies, attention on representations about the environ-
there are various intricate legal risks to consid- mental impacts of products and their life cycle.
er, such as misleading representations, as they
relate to the collection and use of personal data,
6 CHAMBERS.COM
INTRODUCTION
Baker McKenzie provides, through its Canadian media and digital marketing risk management;
advertising and marketing practice, full-service advertising clearance, standards and consum-
Canadian advertising and marketing support er/trade complaints; interface and advocacy
to leading domestic and international compa- with advertising regulators; and marketing-
nies, focused on food, cosmetic, drug, device related commercial agreements. The practice
and consumer product safety, packaging and has a long record of success in serving leading
labelling compliance; misleading advertising clients in the Canadian market, including high-
and deceptive marketing practices compliance; profile domestic and international companies
marketing-related privacy, anti-spam and direct in sectors including food and beverage, fash-
marketing regulation; consumer protection, e- ion and luxury, cosmetics and personal care,
commerce and online sales regulation; complex pharmaceutical and health products, consumer
contests, sweepstakes and promotions; social electronics and retail.
Contributing Editor Assisted by

Arlan Gates heads Baker Sarah Mavula is a senior
McKenzie’s Canadian associate in Baker McKenzie’s
International Commercial International Commercial
practice group and leads the practice group and a member of
Canadian Advertising & the Advertising & Marketing and
Marketing and Antitrust & Antitrust & Competition
Competition practices. Arlan advises practices in Toronto. She advises extensively
extensively on all aspects of advertising, on advertising and marketing law across all
marketing, product compliance, e-commerce, types of media, focusing on deceptive
privacy and consumer regulatory law, including marketing, contests and promotions, consumer
compliance, commercial, and enforcement protection, privacy and anti-spam laws,
matters across a wide range of industries. He technology, communications and online sales
has particular experience assisting regulation, and product regulatory compliance
international businesses with the commercial involving food, cosmetics, drugs, medical
and regulatory aspects of expanding to devices, and other consumer and industrial
Canada, and from Canada to other markets. products.
He frequently co-ordinates regulatory advice in
both corporate transactions and commercial
projects.
7 CHAMBERS.COM
INTRODUCTION
Baker McKenzie
181 Bay Street
Suite 2100
Toronto
ON M5J 2T3
Canada
Tel: +1 416 863 1221

Fax: +1 416 863 6275
Email: Toronto.Reception@bakermckenzie.com
Web: www.bakermckenzie.com
8 CHAMBERS.COM
BELGIUM
Netherlands
Law and Practice
Belgium Germany
Contributed by: Brussels
Geert Bovy, Joost Vynckier, Sebastian Tytgat, Hannah Matthys
and Elisabeth Dehareng France
Luxembourg
Baker McKenzie see p.41
Contents
1. Legal Framework and Regulatory 5. Social Media Influencer Campaigns and
Bodies p.10 Online Reviews p.21
1.1 Primary Laws and Regulation p.10 5.1 Trends in the Use of Influencer Campaigns p.21
1.2 Enforcement and Regulatory Authorities p.11 5.2 Special Rules/Regulations on Influencer
1.3 Liability for Deceptive Advertising p.11 Campaigns p.21
1.4 Self-Regulatory Authorities p.12 5.3 Advertiser Liability for Influencer Content p.22
1.5 Private Right of Action for Consumers p.13 5.4 Misleading/Fake Reviews p.23
1.6 Regulatory and Legal Trends p.13 6. Privacy and Advertising p.23
1.7 COVID-19, Regulation & Enforcement p.13 6.1 Email Marketing p.23
1.8 Politics, Regulation and Enforcement p.14 6.2 Telemarketing p.25
2. Advertising Claims p.14 6.3 Text Messaging p.27
2.1 Deceptive or Misleading Claims p.14 6.4 Targeted/Interest-Based Advertising p.27
2.2 Regulation of Advertising Claims p.16 6.5 Marketing to Children p.28
2.3 Substantiation of Advertising Claims p.16 7. Sweepstakes and Other Consumer
2.4 Testing to Support Advertising Claims p.16 Promotions p.29
2.5 Human Clinical Studies p.17 7.1 Sweepstakes and Contests p.29
2.6 Representation and Stereotypes in Advertising p.17 7.2 Contests of Skill and Games of Chance p.30
2.7 Environmental Claims p.17 7.3 Registration and Approval Requirements p.30
2.8 Other Regulated Claims p.17 7.4 Loyalty Programmes p.31
7.5 Free and Reduced-Price Offers p.31
3. Comparative Advertising p.18
7.6 Automatic Renewal/Continuous Service Offers p.34
3.1 Specific Rules or Restrictions p.18
3.2 Comparative Advertising Standards p.18 8. Sports Betting/Gambling p.35
3.3 Challenging Comparative Claims Made by 8.1 Legality & General Regulatory Framework p.35
Competitors p.19 8.2 Special Rules & Regulations p.35
4. Social/Digital Media p.19 9. Web 3.0 p.36
4.1 Special Rules Applicable to Social Media p.19 9.1 Cryptocurrency and Non-fungible Tokens
4.2 Key Legal Challenges p.20 (NFTs) p.36
4.3 Liability for Third-Party Content p.20 9.2 Metaverse p.37
4.4 Disclosure Requirements p.20 9.3 Digital Platforms p.38
4.5 Requirements for Use of Social Media Platform p.20
10. Product Compliance p.38
4.6 Special Rules for Native Advertising p.21
10.1 Regulated Products p.38
4.7 Misinformation p.21
10.2 Other Products p.39
9 CHAMBERS.COM
BELGIUM Law and Practice
Contributed by: Geert Bovy, Joost Vynckier, Sebastian Tytgat, Hannah Matthys and Elisabeth Dehareng,
Baker McKenzie
1. Legal Framework and Specific Legislation

Regulatory Bodies There is also specific legislation prohibiting,
restricting or dealing with certain types of adver-
1.1 Primary Laws and Regulation tising (amongst others, product-related adver-
General Rules on Advertising tising restrictions and advertising restrictions
The most important instrument containing gen- relating to the means of communication or the
eral rules on advertising practices in Belgium is content of the advertising). Some of these pro-
the Belgian Economic Law Code (ELC). visions are the implementation of international
conventions, EU Regulations or EU Directives.
The following sections of the ELC are particularly By way of example, such provisions can be
relevant with regard to advertising. found in:
• Article I.8, which contains the definitions of • The Act of 24 January 1977 on the protec-
advertising and comparative advertising. tion of the health of users in the field of food
Advertising is broadly defined as “any com- and other products, which prohibits tobacco
munication aimed directly or indirectly at advertising and sponsorship, etc.
promoting the sale of products, regardless of • The Act of 25 March 1964 on medicines for
the place or means of communication used”. human use and the Royal Decree of 7 April
Comparative advertising is defined as “any 1995 on information and advertising on medi-
form of advertising in which a competitor or cines for human use.
goods or services offered by a competitor are • The Royal Decree of 17 April 1980 on adver-
explicitly or implicitly mentioned”. tising for foodstuffs (in addition to the rules
• Book VI of the ELC, which contains various as set out in EU legislation – eg, EU Regu-
general provisions on advertising (Article lation 1169/2011 on the provision of food
VI.6 ff), comparative advertising (Article VI.17 information to consumers and EU Regulation
ff), as well as unfair commercial practices 1924/2006 on nutrition and health claims
(including advertising and marketing practic- made on foods).
es), both in the B2C and B2B context (Article • The Act of 8 June 2006 regulating economic
VI.92 ff). Part of this legislation is the imple- and individual activities with weapons, con-
mentation of the EU Directives on mislead- taining a prohibition on advertising for illegal
ing and comparative advertising (Directive weapons and a restriction for advertising
2006/114/EC) and unfair commercial prac- weapons for which a licence is required.
tices towards consumers (Directive 2005/29/ • The Act of 7 May 1999 on games of chance,
EG). gambling, gaming establishments and the
• Articles 64-68 of the ELC and Articles 123- protection of players and the Royal Decree of
124 of Book VII of the ELC, which contain 25 October 2018 on the conditions for oper-
specific provisions relating to the advertising ating games of chance and betting through
of consumer and mortgage credits. information society instruments, contain-
• Book XII of the ELC and the related Royal ing limitations on advertising for games of
Decree of 4 April 2003 regulating the send- chance, gambling and gaming establish-
ing of advertising by electronic mail, which ments.
contain provisions on online advertising.
10 CHAMBERS.COM
Baker McKenzie
• The Act of 23 May 2013 regulating the quali- administrative fines, or the proposal of settle-
fications required to perform procedures of ment offers.
non-dental aesthetic medicine and aesthetic
surgery and regulating the advertising and With regard to more specific legislation contain-
information concerning such procedures, ing advertising regulations, other authorities may
which prohibits advertising for cosmetic sur- also be charged with enforcement. For instance,
gery (Article 20/1). the contractual personnel of the Federal Public
• The Act of 23 January 2002 concerning the Service Public Health, Food Chain Safety and
advertising of motor vehicles. Environment monitors the implementation of the
• The Flemish primary school Decree of 25 provisions of the Act of 24 January 1977 on the
February 1997, restricting advertisements in protection of the health of users in the field of
primary schools. food and other products (which prohibits, inter
• The Flemish Decree of 29 March 2009 on alia, tobacco advertising and sponsorship) and
radio and television broadcasting, containing its implementing decrees.
advertising and sponsorship restrictions for
broadcasters. Advertising violations may also be subject to
• The French Decree of 4 February 2021 on criminal prosecution by the public prosecutor.
audio-visual media services and video shar-
ing services, containing advertising and spon- 1.3 Liability for Deceptive Advertising
sorship restrictions for broadcasters. General
For violations of restrictions placed on the con-
Self-Regulatory Codes tent of advertising and/or the products adver-
In addition to the legal framework, there are also tised, the advertiser could, in principle, be held
various self-regulatory codes regulating adver- liable.
tising within a specific industry (eg, the Belgian
convention on alcohol marketing), in a certain Conversely, if advertising prohibitions or restric-
context (eg, sport regulations restricting adver- tions relate to the means of communication of
tising in sports) or more generally (eg, the con- the advertising (eg, advertisements close to
solidated ICC Advertising and Marketing Com- highways, online advertisements) or the context
munications Code). surrounding the publication of the advertisement
(eg, advertising in primary schools or in a sports
1.2 Enforcement and Regulatory context), then, in principle, the person publish-
Authorities ing, broadcasting, setting up or maintaining the
The regulatory authority responsible for enforc- advertisement through such means or in such
ing the advertising provisions under the ELC is context will be held accountable. This can also
the Federal Public Service (FPS) Economy (and be the advertiser, but this is not necessarily the
more specifically, the Directorate-General Eco- case.
nomic Inspection (in Dutch: “Algemene Direc-
tie Economische Inspectie”; in French: “Direc- The legislator may, however, deviate from the
tion Générale de l’Inspection Economique”). above-mentioned principles and/or hold other
Enforcement can be done through the initiation persons jointly liable, for example, those who
of cease-and-desist actions, through warnings, assist in the creation of the advertisement. For
11 CHAMBERS.COM
Baker McKenzie
example, Article XV.69 of the ELC expressly stip- regulatory body of the advertising sector in Bel-
ulates that the provisions on criminal complicity gium. The JEP examines whether the content
apply unless expressly excluded. of advertising messages conforms to the rules
of advertising ethics, basing itself on legislation
Cease-and-Desist Actions for Violations of and self-regulatory codes.
Book VI of the ELC
For cease-and-desist actions in response to vio- The following persons can submit a complaint
lations of Articles VI.17, VI.93-VI.95, VI.105 and to the JEP: consumers, consumer organisations,
VI.106 of the ELC (including cease-and-desist sociocultural associations, professional associa-
actions relating to deceptive advertising), the tions/federations, members or representatives of
legislator provided for a specific cascade liability an official body or public authority. In addition,
on the basis of which a cease-and-desist action advertisers, advertising agencies and distribu-
can also be initiated against the following in tors of advertisements (eg, media) may also sub-
order of priority: mit a request to the JEP to obtain an advisory
opinion on an advertising campaign.
• the publisher (written advertisement) or the
producer (audio-visual advertisement); If the JEP considers that the advertising does
• the one printing or creating the advertise- not contain any element that violates the appli-
ment; and cable legislation and/or self-regulatory codes, it
• the distributor of the advertisement, in case will not make any comments. This does, how-
the advertiser, the publisher/producer or ever, not imply that the JEP approves the adver-
printer/creator, respectively, is not domiciled tisement in question. In the event of a dispute,
in Belgium and has not appointed a respon- the courts can still decide that the advertisement
sible person domiciled in Belgium (Article is illegal.
XVII.10, ELC).
If the JEP considers that the advertising mes-
The liability of the aforementioned persons is sage contains editorial and/or visual elements
purely an objective one and does not require the that do not comply with the legislation or codes,
publisher, producer, printer, creator or distribu- it will issue a request to modify or stop the adver-
tor to be at fault. Since the cascade system is tising, depending on the nature and extent of the
only designed for bringing a cease-and-desist violations. This decision will be addressed to the
action, and the application of the system does responsible advertiser. If no action is taken by
not require the publisher/producer, printer/crea- the advertiser or in the absence of a response,
tor or distributor of the advertisement to be at the JEP will address a suspension recommenda-
fault, no civil, criminal or administrative sanction to the media, which supports the JEP’s work
tions can be imposed on them merely on this and has undertaken to comply with its decisions.
basis.
As the JEP is a self-regulatory authority, its deci-
1.4 Self-Regulatory Authorities sions are in principle only binding for its mem-
The “Jury voor Ethische Praktijken inzake Rec- bers. However, if no action is taken by the adver-
lame” or “Jury d’Ethique Publicitaire” (“Jury for tiser or in the absence of a response, the JEP will
Ethical Advertising Practices” ‒ JEP) is the self- address a suspension recommendation to the
12 CHAMBERS.COM
Baker McKenzie
media, which supports the JEP’s work and has An out-of-court dispute settlement may also be
undertaken to comply with its decisions. pursued by the consumer through the Consumer
Ombudsservice (Articles XVI.5-XVI.23, ELC).
Apart from the self-regulatory codes that are
applied by it, the JEP has also issued various Consumers can also file a complaint with the
recommendations on many sub-topics in adver- JEP.
tising such as:
1.6 Regulatory and Legal Trends
• depictions of persons; Implementation of Omnibus Directive
• use of humour; The most important legal trend in the past 12
• advertising for children’s holidays; months regarding (deceptive) advertising is the
• advertising for isolation, fuel and heating; implementation of the Omnibus Directive (Direc-
• non-commercial advertising; tive (EU) 2019/216 on the better enforcement
• advertising for weight loss products; and and modernisation of Union consumer protec-
• influencer marketing. tion rules).
1.5 Private Right of Action for The Belgian transposition of the Omnibus Direc-
Consumers tive (EU) 2019/2161 entered into force on 28 May
Any interested party may bring a cease-and- 2022.
desist action before the court. Apart from a
cease-and-desist action, injured persons may Expected Regulation on Advertising of
also bring other claims, such as a claim for dam- Cryptocurrencies
ages or for the recall, destruction or removal of On 19 July 2022, the existing Act of 2 August
the infringing advertising material. They can also 2002 on the supervision of the financial sector
demand the publication of the judgment ren- and financial services (Financial Supervision Act)
dered. As an additional (civil) sanction, in case was amended to grant new supervisory powers
an agreement has been concluded with a con- to the Financial Services and Markets Author-
sumer as a result of an unfair market practice, ity (FSMA) regarding the promotion of virtual
a consumer may be entitled to the reimburse- currencies to non-professional investors. The
ment of the amounts paid by it, without having FSMA is currently working on a draft regula-
to return the product supplied to it (Article VI.38, tion to regulate the advertising and marketing of
ELC). virtual currencies (see 9.1 Cryptocurrency and
Non-fungible Tokens (NFTs)).
Damaged parties may also file a complaint to
bring/initiate a criminal action in the criminal 1.7 COVID-19, Regulation & Enforcement
courts, to the extent the violation in question is Partly in response to the fact that the number of
subject to punishment by criminal sanctions. gamblers has dramatically increased during the
COVID-19 pandemic, the Belgian government is
The FPS Economy has a consumer “Contact preparing a new Royal Decree to ban all adver-
Point” to report (alleged) violations of advertising tising for games of chance and gambling by the
regulations and other consumer protection laws. end of 2022. Also, sport sponsoring by gambling
13 CHAMBERS.COM
Baker McKenzie
operators would be prohibited (albeit subject to Misleading Commercial Practices towards

a transition period). Consumers (Articles VI.97 - VI.100, ELC)
Black list
Another noticeable development since the Article VI.100 of the ELC provides for a “black
pandemic is that the authorities have gener- list” of commercial practices that are irrefuta-
ally become more active in enforcing regulatory bly considered misleading towards consumers
requirements (including advertising regulations). under all circumstances. This black list includes
practices such as:
1.8 Politics, Regulation and Enforcement
No changes in the political climate or administra- • claiming to have signed a code of conduct
tion have impacted the regulation of advertising when this is not the case;
and/or the enforcement of advertising regula- • falsely claiming that a product will only be
tions. available (under certain conditions) for a very
limited time, in order to make the consumer
decide immediately, giving them no time or
2. Advertising Claims insufficient time to make an informed deci-
sion;
2.1 Deceptive or Misleading Claims • claiming or otherwise giving the impression
General Principles that a product can be legally sold when it
As a general rule that applies both in a B2C and cannot;
in a B2B context, commercial practices (includ- • making factually incorrect claims concern-
ing advertising and the claims contained therein) ing the nature and extent of the danger that
may not be unfair. would threaten the personal safety of the
consumer or their family if the consumer does
Pursuant to the general rule of Article VI.93 of not purchase the product;
the ELC, a commercial practice is unfair if it is • falsely claiming that a product can cure dis-
contrary to the requirements of professional eases, defects or malformations;
diligence and materially distorts or is likely to • describing a product as “free” or “at no
materially distort the economic behaviour of the charge” if the consumer has to pay some-
average consumer whom it reaches or targets, thing other than the unavoidable cost of
with regard to the underlying product. accepting the offer and collecting the product
or having it delivered; and
In B2B relations, it is prohibited for a company • claiming that product reviews have been sub-
to take any action that would violate fair market mitted by consumers who have actually used
practices as a result of which the professional or purchased the product, without taking rea-
interests of one or more other companies are sonable and proportionate steps to verify that
harmed or may be harmed (Article VI.104, ELC). these reviews are from such consumers.
In addition to the general “unfairness” prohi- Grey list

bition, a commercial practice will in any event Articles VI.97-VI.99 of the ELC furthermore lay
be considered unfair if it is either misleading or out a “grey list” of misleading commercial prac-
aggressive. tices, which should only be regarded as mis-
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leading if they contain inaccurate information, • the rights of the consumer, including the right
or, where the information it contains is factually to replacement or reimbursement of a prod-
correct, if they deceive or are likely to deceive uct under Belgian law.
the average consumer in any way, including by
their overall presentation, as to one or more of The law also explicitly states that the following
the following elements. In either case, the adver- marketing practices are to be considered mis-
tising must cause or be likely to cause the aver- leading if they cause or are likely to cause the
age consumer to make a decision on a transac- average consumer to make a transactional deci-
tion that they would not otherwise have made. sion that they would not otherwise have made:
The following is the list of elements in relation to
which the average consumer must be deceived • marketing a product, including through
(or be likely to be deceived) to constitute a mis- comparative advertising, in such a way as to
leading practice: create confusion with products, trade marks,
trade names and other distinguishing features
• the existence or nature of the advertised of a competitor; and
product; • marketing products across EU member states
• the main characteristics of the product, eg, as being identical when, in reality, they have a
availability, advantages, risks, execution, significantly different composition or different
composition, accessories, customer service characteristics.
and complaints handling, production process,
manufacturing date, delivery, suitability and Advertising can also be considered misleading
possibilities for use, quantity, specification, if, taking into account the full context, it omits or
geographical or commercial origin, results to conceals essential information that the average
be expected from use, or characteristics and consumer needs to make an informed decision
results of tests carried out on the product; on a transaction and that causes or is likely to
• the scope of the advertiser’s obligations, the cause the average consumer to make a decision
motives behind the advertisement, the nature on a transaction which they would not otherwise
of the sales process, any statement or symbol have made.
suggesting sponsorship or direct or indirect
support for the advertiser or the product; Aggressive Commercial Practices towards
• the price or the manner in which the price is Consumers (VI.101 - VI.103, ELC)
calculated, or the existence of a specific price Similar to the rules on misleading commercial
advantage; practices, the ELC also includes a black and
• the need for a service, part, replacement or grey list of aggressive commercial practices.
repair;
• the capacity, characteristics and rights of the Black list
advertiser or its intermediary, such as its iden- The black list of aggressive commercial prac-
tity, assets, qualifications, status, recognition, tices in Article VI.103 of the ELC includes:
affiliation, connections, industrial, commercial
or intellectual property rights or its awards • directly inciting children to buy the advertised
and distinctions; and products or to persuade their parents or other
adults to buy such products for them;
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• persistent and unwanted solicitation by tising claims, whether they relate to objectively
telephone, fax, email or other remote media; measurable elements or not. For each claim, an
and individual assessment should be made by the
• giving the false impression that the consumer competent authorities or courts.
has already won or will win a prize upon com-
pletion of a formality, when in fact, either: 2.3 Substantiation of Advertising Claims
Advertising should always be truthful and honest
(a) there is no prize or other equivalent ben- and should not mislead the recipient.
efit; or
(b) the entering in/qualification for the pool of Article XV.16 of the ELC provides for a specific
potential winners of the prize or equiva- obligation for the advertiser to provide evidence
lent benefit is subject to a stake require- of the accuracy of the factual elements it has
ment. communicated as part of its commercial prac-
tices if requested by the authorities. If such evi-
Grey list dence is not provided by the advertiser within
Articles VI.101 and VI.102 of the ELC furthermore one month or appears insufficient, the claim may
include a more general prohibition on aggressive be regarded as an unfair or misleading commer-
commercial practices, under which a commercial practice. In principle, the substantiation of a
cial practice should be regarded as aggressive claim should not be included in the advertise-
towards consumers if, in its factual context, tak- ment itself.
ing into account all its features and circumstanc-
es, it distorts or is likely to significantly distort the 2.4 Testing to Support Advertising
average consumer’s freedom of choice or con- Claims
duct with regard to the product, by harassment, No general standard for testing applies in Bel-
coercion, including the use of physical force, or gium. However, factual claims should be accu-
undue influence, and thereby causes or is likely rate and advertisers may be required to provide
to cause them to make a decision on a transac- evidence of the material accuracy of any objec-
tion that they would not otherwise have made. In tively verifiable claims they make.
order to assess whether a commercial practice
can be considered aggressive, the time, place, There may, however, be specific testing stand-
nature and persistence of the practice, as well ards or requirements that apply to the adver-
as the use of threatening and abusive language tising of particular products. For instance, the
or conduct, are taken into account. self-regulatory Advertising Code for Cosmetic
Products states that any advertisement for cos-
Misleading and Aggressive Practices towards metic products referring to testing should explic-
Other Companies (B2B) itly state the nature of such testing, make sure
Similar rules apply in B2B context (Article VI.105 that the tests are statistically valid, and clearly
ff, ELC). differentiate between tests relating to customer
satisfaction and scientific effects.
2.2 Regulation of Advertising Claims
The prohibition of unfair (ie, misleading or aggres-
sive) commercial practices applies to all adver-
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2.5 Human Clinical Studies Self-Regulation

There is no specific requirement to conduct The ICC Advertising and Marketing Communica-
human clinical studies in order to be allowed to tions Code includes several recommendations
make certain advertising claims. on (the substantiation of) environmental claims.
2.6 Representation and Stereotypes in In addition, a governmental commission on envi-

Advertising ronmental labelling and environmental adver-
Legal Framework tising issued a self-regulatory Environmental
The general principles of non-discrimination, Advertising Code.
diversity and equality are governed by the Anti-
Racism Act of 30 July 1981, the Anti-Discrimi- 2.8 Other Regulated Claims
nation Act of 10 May 2007, the Gender Act of Some products are subject to specific claim reg-
10 May 2007, as well as the non-discrimination ulations under Belgian and/or EU law. The below
prohibition that is included in the Belgian Con- overview is merely intended to give some exam-
stitution. ples and should not be considered exhaustive.
Self-Regulation Cosmetic Products

The ICC Advertising and Marketing Communi- EU Regulation 1223/2009 provides that in the
cations Code also provides that all marketing labelling, making available on the market and
communications must respect human dignity advertising of cosmetic products, text, names,
and must not involve, encourage or incite any trade marks, pictures and figurative or other
form of discrimination on the basis of ethnic or signs may not be used to imply that these prod-
national origin, religion, gender, age, disability ucts have characteristics or functions that they
or orientation. do not have. The responsible person may refer,
on the product packaging or in any document,
In addition, the JEP has issued a separate rec- notice, label, ring or collar accompanying or
ommendation for the depiction of persons in referring to the cosmetic product, to the fact
advertising, which states that advertisers should that no animal tests have been carried out only
take into account the evolution of moral stand- if the manufacturer and its suppliers have not
ards and avoid contributing to the perpetuation carried out or commissioned any animal tests
of social prejudices or stereotypes that are con- on the finished cosmetic product, or its proto-
trary to social evolution or to prevailing morals type, or any of the ingredients contained in it, or
within the population. used any ingredients that have been tested on
animals by others for the purpose of developing
2.7 Environmental Claims new cosmetic products.
Legal Framework
There are currently no specific Belgian laws The Annex to Commission Regulation (EU)
dealing specifically with environmental claims 655/2013 furthermore lays down common cri-
in general. Of course, the general rules on unfair teria to justify the use of a claim in relation to
and misleading commercial practices continue cosmetic products. Also the self-regulatory
to apply. Advertising Code on Cosmetic Products sets
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out different recommendations for advertising • It compares goods or services that meet the
claims in relation to cosmetic products. same needs or are intended for the same
purpose.
Food • It objectively compares one or more material,
At EU level, health claims and nutrition claims relevant, verifiable and representative charac-
can only be used if the products meet the con- teristics of those goods and services, which
ditions for such claims (as set out in the Annex may include price. Subjective characteristics,
to Regulation (EC) 1924/2006 and the related such as taste or smell may also be included
regulations). to the extent that they are based on relevant
statistical research conducted according to
The Belgian Royal Decree of 17 April 1980 fur- best practices.
thermore provides that it is prohibited to attribute • It does not result in the advertiser being con-
properties regarding the composition of a food fused with a competitor, or in the advertiser’s
that cannot be demonstrated through objective brands, trade names, other distinguishing
or measurable criteria. marks, goods or services being confused with
those of a competitor.
• It does not discredit or denigrate the good
3. Comparative Advertising name of the brands, trade names, other dis-
tinguishing characteristics, goods, services,
3.1 Specific Rules or Restrictions activities or circumstances of a competitor,
The rules on comparative advertising can be or use any derogatory language with regard
found in Book VI of the ELC, as an implementa- thereto.
tion of EU Directive 2006/114/EC on mislead- • For goods bearing a designation of origin,
ing and comparative advertising. Comparative it should relate to goods bearing the same
advertising is defined as “any form of advertising designation;
that explicitly or implicitly mentions a competitor, • It does not take unfair advantage of the repu-
or goods or services offered by a competitor” tation of a trade mark, trade name or other
(Article I.8, 14°, ELC). distinguishing marks of a competitor or of the
designations of origin of competing goods.
Comparative advertising is permissible under • It does not present goods or services as imi-
Belgian law, subject to the following restrictions tations or replicas of goods or services bear-
(Article VI.17, ELC). ing a protected trade mark or trade name.
• It is not misleading (this refers to the situation 3.2 Comparative Advertising Standards
in which the advertising in any way, includ- In addition to the standards for general adver-
ing by its presentation, deceives or is likely to tising claims, comparative advertising should
deceive the persons to whom it is addressed in any event comply with the conditions listed
or whom it reaches and which, by reason of in Article VI.17, ELC (see 3.1 Specific Rules or
its deceptive nature, is likely to affect their Restrictions).
economic behaviour or which, for those rea-
sons, injures or is likely to injure a competi-
tor).
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3.3 Challenging Comparative Claims advertisements that are part of an information

Made by Competitors society service or that constitute such service.
An advertiser can challenge a claim made by a
competitor before a Belgian court. To success- Commercial Communication as (Part of)
fully do so, the advertiser would need to prove Information Society Services
that: Information society services are services that
are usually provided in exchange for considera-
• the claim has a comparative character in the tion, by electronic means from a distance and
sense of Article I.8, 14° of the ELC; at the individual request of a service recipient.
• the two companies can be considered com- The consideration does not necessarily have to
petitors; and come from the recipient of the service, but may
• the claim does not comply with any of the also be derived from sponsorship and advertis-
general rules applicable to advertising prac- ing income.
tices, and/or does not meet all the specific
requirements set forth in Article VI.17 of the Article XII.12 of the ELC specifies that online
ELC. advertisements should meet the following con-
ditions.
The court may grant an injunction (ie, a prohi-
bition on the advertiser from using or distribut- • The advertisement, given its overall impres-
ing the concerned advertisement in the future), sion, including its presentation, must be
award damages (eg, reputational) incurred by the clearly identifiable as such. Otherwise, it shall
competitor, or take other remedial actions. For bear the word “advertising” in a legible, vis-
a more detailed overview of the various actions ible and unambiguous manner.
available, see 1.3 Liability for Deceptive Adver- • The natural or legal person on whose behalf
tising, 1.4 Self-Regulatory Authorities and 1.5 the advertising is made must be clearly identi-
Private Right of Action for Consumers. fiable.
• Promotional offers, such as reduced-price
offer announcements and combined offers,
4. Social/Digital Media must be clearly identifiable as such and the
conditions for benefiting from them must be
4.1 Special Rules Applicable to Social easily accessible and presented in a clear and
Media unambiguous manner.
General • Promotional contests or games must be
In Belgium, there are no specific rules for adver- clearly identifiable as such, the conditions of
tising on social media. participation should be easy to fulfil and such
conditions should be indicated in a clear and
Such advertising remains, however, subject to all unambiguous manner.
general rules applicable to advertising practices,
as well as the specific provisions of Book XII
of the ELC, which originate from EU Directives
2000/31/EC and 2009/136/EG and lay out the
principles of identification and transparency for
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4.2 Key Legal Challenges who play a part in the marketing of the post on
Protection Measures and Disclosure social media).
Requirements
At both EU and Belgian levels, there seems to 4.4 Disclosure Requirements
be a tendency to impose additional protection Social and digital media advertising are sub-
measures and disclosure requirements with ject to all general rules applicable to advertising
regard to online advertising, and to label cam- practices (including, for example, the prohibition
paigns as such. When sharing content on social on unfair or misleading practices set out in the
media, brands should furthermore be careful ELC), as well as the specific provisions of Book
not to infringe on privacy rights (including image XII of the ELC (see 4.1 Special Rules Applicable
rights), IP rights and local advertising law. to Social Media).
Quality Control As mentioned under 4.2 Key Legal Requirement

When sponsoring or associating themselves with s, in order not to mislead, it must be made clear
social media posts or videos without conducting that the advertisement constitutes paid advertis-
a quality control of the message it is sponsoring ing/sponsoring.
(eg, sponsoring of YouTube videos, without the
advertisers being aware of the content they are Article XII.12, 2° of the ELC furthermore requires
sponsoring), there is a risk that companies see that the natural or legal person on whose behalf
themselves associated with morally objection- the advertisement is made should be clearly
able films, sites or other messages. As in the identifiable.
case of online sponsorship, the quality check is
often automated. This leads to errors slipping For the sake of completeness, it should be noted
into the algorithm more quickly. that stricter disclosure requirements may apply
to influencers (see 5.2 Special Rules/Regula-
For other, more influencer-related challenges on tions on Influencer Campaigns).
social media, see 5.1 Trends in the Use of Influ-
encer Campaigns. 4.5 Requirements for Use of Social
Media Platform
4.3 Liability for Third-Party Content There are no unique rules or regulations that
Whether an individual/company whose products apply to the use of social media platforms.
are advertised can be held responsible for con-
tent posted by others on its site or social media Obviously, compliance is required with all appli-
channels will depend on whether the advertiser cable rules contained in the ELC and any other
has commissioned such posts or the networks, relevant legislation, as well as with Regulation
advertising agencies, platforms and other parties (EU) 2016/679 of the European Parliament and
who intervene in the marketing of the products. of the Council of 27 April 2016 on the protection
of natural persons with regard to the process-
If so, the advertiser could, in principle, be held ing of personal data and on the free movement
liable (together with the persons placing the of such data, and repealing Directive 95/46/EC
advertisement and, as the case may be, any (GDPR).
networks, agencies, platforms and other parties
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4.6 Special Rules for Native Advertising 5.2 Special Rules/Regulations on

Article XII.12, 1° of the ELC provides that an Influencer Campaigns
advertisement, given its overall impression, General
including its presentation, must be clearly iden- All rules applicable to digital advertising (4.
tifiable as such. If it is not possible to irrevoca- Social/Digital Media) equally apply to influenc-
bly identify it as an advertisement, it shall bear ers. An influencer is subject to the advertising
the word “advertising” in a legible, visible and rules if:
unambiguous manner. In addition, the natural or
legal person on whose behalf the advertisement • they are putting a spotlight on a product, a
is made, should be clearly identifiable (Article company, service or brand (verbally, visually
XII.12, 2°, ELC). or in text); and
• they receive a benefit from the company
4.7 Misinformation behind the brand, product or service.
Under Belgian law, there are no specific regu-
lations relating to misinformation on topics of This is also the case if the influencer:
public importance. Several initiatives, such as
citizen consultation and expert reports, have • shares a discount code they received from
been launched in the past, but so far, no legisla- the brand with their followers;
tion has been adopted in relation to this issue. • gives away products for the brand or runs a
contest; or
• share an affiliate link for a brand;
5. Social Media Influencer
Campaigns and Online Reviews The benefit can be diverse, for example:
5.1 Trends in the Use of Influencer • a free of charge product (even if the influencer
Campaigns did not ask for it);
Being service providers of an information society • a discount;
service, influencers are required to mention their • cash payment;
address and company number on their social • a lend of a product;
media accounts (Article XII.6, ELC). Earlier in • free tickets to a festival;
2022, various influencers in Belgium received a • a free night in a hotel;
warning from the Federal Public Service (FPS) • a free meal at a restaurant;
Economy, establishing their non-compliance • an invitation to an event; and
with this rule. This has raised strong concerns • a percentage of the sale of products through
with regard to the safety and privacy of the per- the affiliate link shared;
sons involved. The federal government therefore
gave them some additional time to come to a Guidelines on Influencer Marketing, Issued by
workable solution that is supported by the entire the FPS Economy
sector. One of the proposals is to unite the sec- Earlier in 2022, the FPS Economy issued addi-
tor and designate a shared physical location. tional guidelines for influencers and content
The address of such location could then be pub- creators, which seem to be more specific and
lished online, instead of the home addresses.
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slightly stricter than the recommendation issued target audience and be easily noticeable by the
by the Belgian Centre for Communication. average consumer.
Influencers must clearly communicate the com- The JEP is responsible for monitoring whether
mercial nature of their advertising messages. In influencers and the companies on whose behalf
principle, the commercial nature must be clear the advertisements are made comply with these
from the context of the message itself. This recommendations, and to handle any complaints
means that it must be immediately clear to their in this regard. Should it decide that a violation
followers that the post constitutes advertising. has occurred, the JEP can request the influencer
The best way to do this is by tagging the post as and/or the brand to amend or delete the con-
an advertisement. This tag must be immediately cerned advertisement(s). All decisions by the
visible to social media users, without them hav- JEP are published on their website.
ing to click or expand the post and is preferably
mentioned at the beginning of the post or placed 5.3 Advertiser Liability for Influencer
directly in the photo or in the video. The “adver- Content
tising” labelling should always be: Whether a person/company whose products are
advertised can be held responsible for content
• made at least in the language of the post; posted by influencers, will depend on whether
• be included in a prominent place, depending the advertiser has commissioned such posts or
on the type of social media (ie, in the picture the networks, advertising agencies, platforms
or video, at the beginning of the post, etc); and other parties who intervene in the market-
and ing of the products.
• be visible regardless of the device used
(desktop, mobile, tablet, in-app, etc). If so, the advertiser has a duty to monitor its
influences and could therefore, in principle, also
It should not be buried in different hashtags, or be held liable for violations of the applicable
put in a colour that contrasts poorly with the advertising regulations (together with the influ-
background. encer and, as the case may be, any networks,
agencies, platforms and other parties who play
Recommendations for Online Influencers, a part in the marketing of the post).
Issued by the Belgian Centre for
Communication The Belgian Centre for Communication further
In October 2018, the Centre for Communication specifies in its (non-binding) recommendations
published recommendations for online influ- that the following persons in any event can be
encers and content creators, which have been held responsible by the JEP for violations of the
updated in 2022. applicable rules:
One of the recommendations is that an influ- • the person publishing the post (ie, the influ-
encer has to add a “tag” to their publication encer);
explicitly identifying its nature, such as “adver- • the company or brand requesting the publish-
tisement”. Such tags should be adapted to the ing of the post; and
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• any networks, agencies, platforms and other 6. Privacy and Advertising

parties who play a part in the marketing of the
post on social media. 6.1 Email Marketing
Legal Framework
5.4 Misleading/Fake Reviews In Belgium, three main sets of regulations apply
Under the Belgian transposition of the Omnibus to marketing by email:
Directive, the following practices have been add-
ed to the “black list” of misleading commercial • Articles XII.12 and XII.13 of the ELC;
practices of Article VI.100 of the ELC (meaning • the Royal Decree of 4 April 2003 regulating
that they are prohibited under all circumstances, advertising by electronic mail; and
without the possibility of rebutting the unfairness • data protection legislation, in particular the
presumption): GDPR and the Belgian Data Protection Act of
30 July 2018.
• providing search results in response to a con-
sumer’s online search query without clearly It is also worth mentioning that the FPS Econ-
disclosing any paid advertisement or payment omy and the Belgian Data Protection Authority
specifically for achieving higher ranking of have both published guidance on spamming and
products within the search results; direct marketing.
• stating that reviews of a product were sub-
mitted by consumers who actually used or Opt-In Principle
purchased that product when no reasonable Under Article XII.13 of the ELC, the use of elec-
and proportionate steps were taken to ensure tronic mail for advertising purposes is prohib-
that they originate from such consumers; and ited without the prior, free, specific and informed
• submitting or commissioning another legal consent of the recipient of the messages (the
or natural person to submit false consumer so-called “opt-in principle”).
reviews or endorsements, or misrepresenting
consumer reviews or social endorsements, in Electronic mail is broadly defined in the ELC as
order to promote products. any message in the form of text, voice, sound or
image sent over a public communications net-
Moreover, when companies provide access work which may be stored in the network or in
to consumer reviews of products, information the recipient’s terminal equipment until retrieved
about whether and how the company ensures by the recipient (Article I.18, 2°, ELC). It accord-
that the published reviews originate from con- ingly covers marketing communications through
sumers who have actually used or purchased email, SMS, MMS, social media postings and
the product shall be regarded as material. Bel- push notifications.
gian law explicitly foresees that omitting this
information shall be considered a misleading Exceptions to the Opt-In Principle (Royal
omission in the sense of Article VI.99 of the ELC. Decree of 4 April 2003)
The applicable Belgian law provides for two
exceptions to prior opt-in.
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Electronic marketing mails sent to legal of charge, to object to the processing of their
entities data for direct marketing purposes.
An organisation may send electronic marketing
mail to a legal entity (even if it is not a customer) Right to Opt-Out (Royal Decree of 4 April
without the prior consent of the recipient if the 2003)
following cumulative conditions are met: The recipient of marketing communications by
electronic mail must be given, in a simple and
• the marketing communication is sent to an unambiguous way, the possibility to object to
impersonal email address (eg, “info@com- such marketing communications:
pany.com”, etc) - if, however, it is sent to a
personal email address of an employee within • at the time of collection of their data; and
the company (eg, “firstname.lastname@com- • in each subsequent message through valid
pany.com”), the opt-in rule remains applica- contact information.
ble; and
• the promoted services or goods are intended The process of unsubscribing must be free of
for the legal entity’s activities (eg, one could charge, simple, direct, without justification and
not send promotional materials about men’s easily accessible. Every commercial email must
or women’s clothing without prior consent to include a link activating the opt-out or referring
a legal entity active in the banking and finan- to an opt-out page, or mention an opt-out email
cial sector). address.
Electronic marketing mails sent to existing Where personal data is processed for direct mar-
customers (“soft-spam” exception) keting purposes, the above is without prejudice
An organisation may send electronic marketing to the data subject’s right to object at any time to
communications to existing customers (legal or processing of personal data concerning them for
natural persons) if the following cumulative con- such marketing, which includes profiling, to the
ditions are met: extent that it is related to such direct marketing
(Article 21.2, GDPR) (see 6.4 Targeted/Interest-
• the recipient’s electronic contact details were Based Advertising).
collected directly from the recipient upon the
selling of goods or services and the data col- Specific Information and Transparency
lection has been done in accordance with the Requirements
Belgian data protection legislation; As per Article XII.13 of the ELC, when sending
• the recipient’s electronic contact details are marketing communications by electronic mail,
used for the exclusive purpose of promoting the provider must:
goods or services similar to those already
sold to the recipient and are offered by the • provide clear and comprehensible information
same entity that has initially collected the concerning the right to object to receiving
data; and advertisements in the future; and
• upon collection of their electronic contact • indicate and make available an appropriate
details, the recipient is able, easily and free means of effectively exercising this right by
electronic means.
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In addition, the information requirements laid ensure the performance of a contractual obliga-
down under Article XII.12 ELC as described in tion or where Article XII.13 of the ELC is com-
4.1 Special Rules Applicable to Social Media plied with.
need to be complied with.
Enforcement and Liability
In accordance with data protection legislation, Non-compliance with the ELC
at the time of data collection, the recipient must See 1.2 Enforcement and Regulatory Authori-
be informed about all aspects of the process- ties.
ing of their data in accordance with Article 13
of the GDPR (purposes and legal bases of the Non-compliance with data protection
processing, recipients of their data, data pro- legislation
tection rights, etc), including about the fact that The provider acting as data controller is respon-
their email address, phone number, etc, may be sible for compliance with the rules laid down in
used for marketing purposes and about the right applicable data protection legislation, in particu-
to object at any time to the processing of their lar the GDPR and the Belgian Data Protection
personal data for marketing purposes. Act. The Belgian Data Protection Authority is the
competent enforcement authority for violations
In addition, when sending marketing commu- of the GDPR and the Belgian Data Protection Act
nications by electronic mail, it is prohibited to in Belgium. Specific rules exist for cross-border
(Article XII.13, ELC): processing of personal data.
• use the electronic mail address or identity of In cases of non-compliance with the rules set
a third party; forth by the GDPR or the Belgian Data Protection
• falsify or hide any information that would Act, administrative fines up to EUR20 million or
allow the identification of the origin of the 4% of the turnover of the company, whichever
electronic mail message or its transmission is higher, could be imposed. The Data Protection
path; and Authority also has the power to issue warnings,
• encourage the recipient of the messages to reprimands and orders, and to impose tempo-
visit websites that contain advertising mes- rary or definitive limitations, including bans on
sages that infringe Article XII.12 of the ELC. the processing, order rectification or erasure of
personal data, etc. A faulty data controller or
The above information requirements in relation processor could also be subject to claims for
to marketing through electronic mail are without damages from data subjects.
prejudice to general information requirements.
Criminal sanctions are also possible for specific
Unfair Commercial Practice violations under the Belgian Data Protection Act.
Pursuant to Article VI.103, 3° of the ELC, mak-
ing persistent and unwanted solicitations by 6.2 Telemarketing
electronic mail or other remote media is consid- Legal Framework
ered an aggressive commercial practice, which. In Belgium, two main sets of regulations apply
in principle, is prohibited, except where legal to telemarketing:
or regulatory provisions authorise it in order to
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• the ELC, in particular Articles VI.110 to Right to Opt-Out

VI.115; and The recipient must be given, in a simple and
• data protection legislation, in particular the unambiguous way, the possibility to object to
GDPR and the Belgian Data Protection Act of marketing communications by phone:
30 July 2018.
• at the time of collection of their data; and
The FPS Economy has recently published guide- • in each subsequent call through valid contact
lines on direct marketing by telephone. information.
As a general remark, Belgian law does not make The process of unsubscribing must be free of
a distinction for telemarketing in the B2C and charge, simple, direct, without justification and
B2B contexts. easily accessible. Unsubscribing can be done
over the phone, by mail or by email.
Automated Calling Systems and Faxes ‒ Opt-
In “Do Not Call Me” List
Under Article VI.110 ELC, the use of automated Recipients who do not want to receive market-
calling systems without human intervention and ing phone calls from any company can register
faxes for direct marketing purposes are prohib- themselves on the “do-not-call-me” (DNCM)
ited without the prior free, specific and informed list maintained by the non-profit association Do
consent of the recipient of the messages. The Not Call Me (which has been appointed by Royal
person who gave their consent can withdraw Decree to manage that list).
it at any time, without justification and free of
charge. Before performing direct marketing by phone
(other than by automated calling systems for
Phone Calls (Except Automated Calling which opt-in is required, see above), all compa-
Systems) ‒ Opt-Out nies have the obligation to check whether the
Without prejudice to Article XII.13 of the ELC, recipient and corresponding phone number is
mentioned under 6.1 Email Marketing, unsolic- included on the DNCM list (Article VI.112, ELC).
ited communications for direct marketing pur-
poses that are carried out by techniques other Pursuant to Article VI.112 of the ELC, it is pro-
than automated calling systems and faxes (eg, hibited to contact persons (whether B2C or B2B)
phone) are authorised provided that the recipi- for direct marketing purposes who are registered
ent, whether a natural or legal person, has not on the DNCM list.
manifestly opposed such communication (the
so-called “opt-out principle”) (Article VI.110, The prohibition does, however, not apply to calls
ELC). to telephone numbers of subscribers who have
given their express consent to use their personal
When carrying out advertisement by such means data for such purposes.
of communication, it is prohibited to conceal the
identity of the company on whose behalf the The provider must obtain a licence to consult the
communication is made (Article VI.110, ELC). list (see https://www.dncm.be/en/home). The
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rule applies to both local and non-local entities 6.4 Targeted/Interest-Based Advertising
that target Belgian residents. Legal Framework
In Belgium, targeted and interest-based adver-
Information Requirements tising are mainly regulated by three main sets of
In addition to the information to be provided to regulations.
data subjects in relation to the processing of
their personal data under the GDPR (see 6.1 • The ELC, and in particular the rules regarding
Email Marketing), the recipient of a marketing market practices and consumer protection
call must be informed of: (Book VI, ELC) as well as the transparency
requirements set out by Articles XII.6 and
• the identity of the caller; XII.12 of the ELC. In the context of targeted
• the commercial nature of the communication; and interest-based advertising, providing
and search results in response to a consumer’s
• the right to opt-out in each call through valid online search query without clearly disclosing
contact information. any paid advertisement or payment specifi-
cally for achieving higher ranking of products
Unfair Commercial Practice within the search results constitutes a prohib-
Pursuant to Article VI.103, 3° of the ELC, mak- ited misleading commercial practice (Article
ing persistent and unwanted solicitations by tel- VI.100, 24°, ELC).
ephone, fax or other remote media is considered • Data protection legislation (GDPR and the
an aggressive commercial practice which is in Belgian Data Protection Act of 30 July 2018),
principle prohibited, except where legal or regu- in particular the lawfulness principle (Article
latory provisions authorise it in order to ensure 6, GDPR), the transparency requirements
the performance of a contractual obligation or (Articles 13 and 14, GDPR), the right to object
where Article VI.110 of the ELC is complied with. (Article 21, GDPR) and specific rules regard-
ing automated individual decision-marking,
Enforcement and Liability including profiling (Article 22, GDPR).
Non-compliance with the ELC • The cookie rules laid down in the Belgian
See 1.2 Enforcement and Regulatory Authori- Data Protection Act of 30 July 2018.
ties.
GDPR Principle of Lawful Processing
Non-compliance with data protection Targeted and interest-based advertising imply
legislation personal data processing operations, which
See 6.1 Email Marketing. need to be based on one of the lawful bases
for data processing laid down in Article 6 of the
6.3 Text Messaging GDPR.
As mentioned in 6.1 Email Marketing, the wide
definition of electronic mail in the ELC (Article As pointed out by the Belgian Data Protection
I.18, 2°) covers marketing communications Authority, in the context of direct marketing,
through text messaging (eg, SMS, MMS and which includes targeted and interest-based
instant messaging). advertising, the legal bases of consent (Article
6.1 (a), GDPR), the necessity for the perfor-
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mance of a contract (Article 6.1 (b), GDPR) and particular with the specific requirements set out
the advertiser’s or a third party’s legitimate inter- under Article 10/2 of the Belgian Data Protection
ests (Article 6.1 (f), GDPR) are usually the most Act. According to this provision, the placing of
appropriate legal bases. A careful assessment is cookies is only allowed provided that:
necessary on a case-by-case basis.
• the user or subscriber concerned receives
GDPR Transparency Requirements clear and detailed information about the
As with any data processing operation, to the purposes of the processing underlying the
extent targeted and interest-based advertising placing of cookies and their rights pursuant to
rely on the processing of personal data, data data protection legislation; and
subjects must be provided with information on • the user or subscriber has given their consent
all aspects of the processing including, inter alia, prior to the placing of the cookies, after hav-
the purpose of the processing, the identity of the ing received the above information, it being
controller/advertiser, the categories of recipients understood that they can withdraw consent
that have access to the data and their right to freely and in an easy manner.
object, to access, to rectify or to delete their data
(as per Articles 13 and 14, GDPR). The above-mentioned rule is, however, subject
to exceptions under strict conditions.
GDPR - Right to Object
Pursuant to Article 21.2 of the GDPR, where The Belgian Data Protection Authority has issued
personal data is processed for direct marketing guidance regarding the use of cookies for mar-
purposes, the data subject shall have the right keting and targeted marketing purposes.
to object at any time to processing of personal
data concerning them for such marketing, which 6.5 Marketing to Children
includes profiling to the extent that it is related In Belgium, the legal framework regulating mar-
to such direct marketing. keting to children is fragmented between differ-
ent sets of regulations. Marketing targeting chil-
GDPR - Automated Individual Decision- dren is also covered by various self-regulation
Making and Profiling initiatives.
Pursuant to Article 22 of the GDPR, subject to
certain exceptions, data subjects have the right The below is not intended to provide an exhaus-
not to be subject to decisions based solely on tive overview of such rules, but merely a brief
automated processing, including profiling, which outline of the most important restrictions.
produce legal effects concerning them or simi-
larly significantly affect them. Legal Framework
ELC provisions
Cookie Rules As per Article VI. 103, 5° of the ELC, including in
In practice, targeted and interest-based adver- an advertisement a direct incitement to children
tising usually relies on the use of cookies or to buy advertised products or persuade their
similar tracking technologies. The use of cook- parents or other adults to buy advertised prod-
ies must in essence comply with the general ucts for them is considered a prohibited aggres-
rules laid down in data protection legislation, in sive commercial practice.
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Data protection legislation with respect to, inter alia, price indications,
In Belgium, the processing of a minor’s personal contests, health, security and psychological
data in relation to the offer of information society effects.
services (eg, services provided on the internet, • The Food Industry Federation has adopted a
including internet advertising) based on their Code of advertising for foodstuffs. It contains
consent is lawful if the child is at least 13 years provisions specifically designed to regulate
old (Article 7, Belgian Data Protection Act). If the food advertising aimed at children.
child is younger the 13, consent must be given • The Code of Advertising and Commercial
by the holder of parental responsibility (accord- Communication for Cosmetic Products pro-
ing to Article 8 (1) of the GDPR). vides specific rules with respect to advertis-
ing for cosmetic products specifically made
Radio and television advertising rules for children.
Both the Flemish Decree of 27 March 2009 on • The covenant on advertising and marketing of
Radio and Television Broadcasting (Articles alcoholic beverages contains specific provi-
70-77) and the French Decree of 4 February sions regarding minors.
2021 on audio-visual media services and vid-
eo sharing services (Article 5.2-5.3) set out, in Food
similar terms, specific conditions for commercial See 10. Product Compliance.
communications targeted at children, including
the following: Cosmetic Products
See 10. Product Compliance.
• such commercial communications can-
not cause any moral or physical damage to Alcoholic Beverages
minors; See 10. Product Compliance.
• such commercial communications can in
principle not represent minors in dangerous
situations; and 7. Sweepstakes and Other
• such commercial communications cannot Consumer Promotions
encourage or condone excessive consump-
tion of foods and beverages that contain 7.1 Sweepstakes and Contests
substances that are not recommended for Under Belgian law, sweepstakes or lotteries are
excessive consumption, such as fats and all operations offered to the public and aiming
sugars. at obtaining a gain/winning by the sole effect
of luck. It is thereby irrelevant whether a stake
Self-Regulation is required to enter into/qualify for the pool of
There are also various self-regulatory codes potential winners. Conversely, a game in which
dealing with advertising targeted to children/ the winners are identified by a combination of
minors. chance and effort is not a lottery. However, this
can still be qualified as a game of chance (see
• The French Speaking Community has a Code 7.2Contests of Skill and Games of Chance).
of Ethics for Children’s Broadcast Advertising,
which lays down broadcast advertising rules
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Lotteries and sweepstakes are in principle pro- According to this definition, three (cumulative)
hibited under Belgian law as per Article 301 of elements are necessary for a game to be con-
the Criminal Code. Exceptions to this prohibition sidered a game of chance:
apply when the organisation of lotteries is sub-
ject to a federal, provincial or, depending on the • the stake, which may consist of paying a
territorial scope, municipal authorisation/per- higher price than the normal price for a prod-
mit and other strict requirements. For instance, uct in order to participate in the contest, or
exceptions are granted to the National Lottery calling or sending a text message to a certain
(Nationale Loterij or Loterie Nationale) and to number, for which more is to be paid than for
non-profit organisations that organise lotteries a “usual” call or text message;
or prize draws for the purposes of charity or the • the win or loss; and
encouragement of industry or arts or another • chance.
public interest and on the basis of a correspond-
ing permit. Therefore, even if a game requires a stake, but
the participant’s skills (rather than coincidence/
When organising a lottery, the general rules of luck) solely determine the outcome of the game,
the ELC, such as those relating to unfair terms it will not be qualified as a game of chance.
and misleading and aggressive commercial
practices, should also be complied with. A game of chance thus differs from a lottery
in that a stake is always required (which is not
7.2 Contests of Skill and Games of the case with a lottery) and luck does not have
Chance to be the sole determining factor. Lotteries are
Belgian law distinguishes lotteries from games expressly excluded from the scope of the Act.
of chance. Unlike games of chance and lotter-
ies, other games (such as games of skill) are not Other Games (Such as Games of Skill)
specifically regulated. Unlike games of chance and lotteries, other
games (such as a game of skill ‒ ie, a game that
Games of Chance involves skill, without luck being the predomi-
The Act of 7 May 1999 on games of chance, nant factor in the determination of the winner or
gambling, gaming establishments and the pro- the prize, and which does not qualify as a game
tection of players defines a game of chance as of chance) are not generally regulated.
“any game, where a stake requirement results
either in the loss of this bet by at least one of They remain subject to the general rules on
the players, or in a win of any kind for at least advertising, such as those included in the ELC
one of the players, or furnishers of the game, relating to unfair terms and misleading and
and where chance is an even incidental element aggressive commercial practices.
in the course of the game, the designation of
the winner or the determination of the size of 7.3 Registration and Approval
the win”. Requirements
Lotteries
The organisation of lotteries is subject to a fed-
eral, provincial or, depending on the territorial
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scope, municipal authorisation/permit and other They remain, however, subject to the general
strict requirements. Commercial lotteries may rules of the ELC and any other applicable gen-
therefore only be organised by non-profit organi- eral legislation (eg, on data protection).
sations with a public interest/charity purpose,
and authorised by Royal Decree. Commercial 7.5 Free and Reduced-Price Offers
companies may not organise lotteries unless Official End-of-Season Sales Periods (Articles
they adhere to duly authorised lottery schemes. VI.25-VI.28, ELC)
Belgian law provides for specific periods dur-
Games of Chance ing which end-of-season sales can be run under
Article 4 of the Act of 7 May 1999 provides that the specific names “opruimingen”, “solden”,
it is prohibited for any person to operate a game “soldes”, “Schlussverkauf” or any other similar
of chance or gaming establishment, under any names.
form, in any place and in any direct or indirect
manner without a prior licence issued by the Winter sales from 3 January to 31 January (it
Gaming Commission in accordance with this law being noted that if 3 January is a Sunday, winter
and subject to the exceptions provided by the sales may begin on Saturday 2 January); and
law. It is furthermore prohibited to participate in summer sales from 1 July to 31 July (it being
a game of chance, to facilitate the operation of noted that if 1 July is a Sunday, summer sales
a game of chance or gaming establishment, to may begin on Saturday 30 June).
advertise a game of chance or gaming establish-
ment, or to recruit players for a game of chance Only products that have been previously offered
or gaming establishment when the person con- for sale by the retailer for at least 30 consecutive
cerned knows that it involves the operation of a or non-consecutive days and are still in the pos-
game of chance or gaming establishment that is session of the retailer at the time of the sale may
not licensed under the Act. be included in an end-of-season sale.
The Gaming Commission can grant seven types During the official end-of-seasons sales periods,
of licences. In the overview on their website, products that are eligible to be included in the
information on how to apply for each type of end-of-seasons sales can even be sold at a loss,
licence can be found. which is otherwise prohibited under Belgian law
(see Articles VI.116-117, ELC).
Other Games
Other games (including games of skill) do not Black-Out Period prior to the Start of the
need registration or approval by any regulatory Official End-of-Season Sales Periods (Article
body nor approval of rules by a regulatory body. VI.29, ELC)
Before each end-of-season sales period, a
7.4 Loyalty Programmes “black-out” or “waiting” period must be respect-
No specific rules apply to loyalty programmes ed. During this “black-out” period, it is prohibited
in Belgium. to announce price reductions (other than those
relating to the upcoming end-of-season sales),
or to provide price reduction vouchers. Also,
price reductions announced before the black-
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out period that have effect during the black-out this is one of the few areas that allows for nation-
period are prohibited. Retailers remain free to al divergences, and that, as such, the Belgian
apply price reductions at check-outs during the legislator has opted to limit the reference period
pre-seasonal sales periods, provided that this to seven days for products that have been on
price reduction has not been announced to the the market for less than 30 days. Deviating rules
consumer. have also been adopted for so-called “progres-
sive discounts” within a period of maximum 30
The black-out period is a period of one month days.
prior to the start of the respective official end-of-
season sales period. The obligation to indicate a “reference price”
does not apply to goods that spoil quickly or
The black-out period only applies to apparel, have a limited shelf life, or general communica-
leather goods and footwear. It does also not tions in which no specifically measurable price
apply to clearance sales (a specific type of sales reduction or conditional offers is announced.
for retailers ceasing their business), nor to com- However, in these cases, companies must still
mercial fairs organised by local groups of enter- comply with the prohibition on unfair commercial
prises (or with their participation) which last for practices as set out in the ELC.
maximum four days per black-out period. The
black-out period does not apply to joint offers. Prohibition on selling at a loss (Articles
Joint offers can be offered to consumers all year VI.116-VI.117, ELC)
long. Belgian law prohibits the sale of products at a
loss. This means that the price offered to the
General Rules Applicable to Announcements customer cannot be lower than the price paid
of Promotions by the seller to their supplier or the price the
Certain names are reserved for the official seller would theoretically have to pay for the
end-of-season sales product if it were to re-order it from the supplier,
The use of the denominations, “S oldes “, “S old- after the deduction of potential (volume) reduc-
en “”O pruiming “, “Schlussverkauf” or another tions. In the case of joint offers, the offer is only
similar denomination, is only allowed for price regarded as a sale at loss if the offer as a whole
reductions applied during the legally defined constitutes a sale at a loss.
end-of-season sales periods.
The prohibition of sales at a loss does not apply
Announcement of price reductions to during the official end-of-season sales for prod-
consumers require indication of reference ucts that are eligible to be included in such
price (Article VI.18, ELC) official end-of-season sales. Other exceptions
As a result of the implementation of the Omni- included goods being offered during clearance
bus Directive in Belgium, traders are required to sales, goods being offered that cannot be stored
indicate a “reference price” when announcing a any longer, goods being offered that the compa-
price reduction to consumers. Such reference ny, due to external circumstances, can no longer
price is, in principle, the lowest price applied reasonably sell against a price equal or higher
during the 30 days prior to the start of the price than the price of acquisition and goods being
reduction in the same sales channel. Note that offered of which the sale price, for compelling
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reasons of competition, is being aligned with the will be made, unless that information is com-
price offered by competing companies for the municated at the same time as the voucher in
same or competing good. a separate document.
Joint offers (Articles I.8, 18°; I.8, 21°; and Value vouchers
VI.80-VI.81, ELC)
Joint offers are in principle allowed in Belgium Specific rules apply regarding vouchers that
and may be offered all year long, provided that were distributed free of charge and that are enti-
they do not amount to unfair market practices tling the holder to an immediate discount upon
and provided that they comply with consumer purchase of one or more goods and/or services
information, sales, price indication and advertis- (“value vouchers”). Any company to whom such
ing rules. voucher is presented must accept the voucher,
so long as the conditions of the offer are fulfilled.
Article VI.81, Section 1 of the ELC, however, It is irrelevant in this regard which company
prohibits joint offers to consumers, if at least issued the voucher (a voucher issued by a third
one element of the offer constitutes a financial party must also be accepted). If the voucher
service, and if such joint offer is made by one was issued to the consumer by a third party, the
company or by different companies acting with a voucher must mention:
common purpose. The second paragraph of this
Article, however, provides for some exceptions • the name, address and, where applicable, the
to this prohibition. form of company and company number of
the issuer;
Cashback and value vouchers (Articles VI.31- • the amount of the discount (this is a nominal
VI.33 ELC) amount; a percentage is not allowed);
Cashback vouchers • the goods or services to which the voucher is
applicable;
Vouchers entitling the holder to a later reim- • the establishments where the voucher can be
bursement of (part of) the price (“cashback- used, unless it may be used in any establish-
vouchers”), offered by a company at the time of ment offering the relevant goods or services;
the purchase of a good or service, must mention and
the following: • the term of validity of the voucher, unless it is
unlimited.
• the name, address and, where applicable, the
form of company and company number of No unfair or misleading practices
the issuer; Announcements of promotions (including price
• the amount reimbursed; reductions, joint offers and the offering of vouch-
• the ultimate date of validity of the voucher (if ers) must not be unfair or misleading. Whether
any); and a given announcement is misleading is to be
• the terms and conditions of reimbursement, assessed on a case-by-case basis. In order not
including the steps that the holder of the to be misleading, promotions must, amongst
voucher must take to obtain reimbursement other things, be effective, meaning that the
and the period within which reimbursement customer must benefit from a real advantage.
33 CHAMBERS.COM
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Promotions should therefore also generally be Unfair Terms in Consumer Contracts (Articles
limited in terms of time. VI.83, 18°, 19° and 20°, ELC)
The following terms are furthermore considered
7.6 Automatic Renewal/Continuous unfair, and therefore null and void, when includ-
Service Offers ed in agreements with consumers:
Obligation to Inform (Articles VI.2, 6° and
VI.45, 15°, ELC) • terms that are intended to bind the consumer
Prior to consumers being bound by an agree- for an indefinite period, without clearly men-
ment, the company must provide the consumer tioning a reasonable notice period;
with, inter alia, information regarding the dura- • terms that are intended to extend a fixed-
tion of the agreement or, if the agreement is term contract for the successive delivery of
indefinite-term or is automatically renewed, the goods for an unreasonable period of time if
conditions for termination of the agreement by the consumer does not give notice of termi-
the consumer. This information must be pro- nation in due time; and
vided by the company, unless it is already clear • terms that are intended to automatically
from the context, in a clear and understandable renew a fixed-term contract in the absence of
manner. any contrary notice from the consumer, when
the deadline for the consumer to express its
Specific Obligation to Inform for Service intent not to renew the agreement is “too far”
Agreements with a Fixed Term, Providing for away from the end date of the agreement.
a Tacit Renewal (Article VI.91, ELC)
Tacit renewal provisions in fixed-term service Similar terms are presumed to be unfair (and
agreements (or agreements relating to both the therefore to be null and void) if included in B2B
sale of a product and the provision of services) agreements (Article VI.91/5, ELC), unless such
concluded between a company and a consumer presumption is rebutted:
must be printed in bold in a frame separated
from the text of the agreement and on the front • terms that are intended to tacitly prolong or
side of the first page of the agreement. renew a fixed-term contract with an unrea-
sonable term, without specifying an exit pos-
The term must also describe the consequences sibility with a reasonable notice period; and
of the automatic renewal, including: • terms that are intended to bind the parties for
a considerable period of time without specify-
• the consumer’s right to terminate the agree- ing an exit option with a reasonable notice
ment at all times following the automatic period.
renewal by providing prior notice as provided
in the agreement (with such notice period not
exceeding two months); and
• the deadline by which the consumer may
object to the tacit renewal and the manner in
which such objection must be notified to the
company.
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8. Sports Betting/Gambling • with newsagents, as a secondary activity; and

• within the enclosure of a racecourse.
8.1 Legality & General Regulatory
Framework Required Licences
General Framework In order to organise bets, an F1 licence is need-
Sports betting and any other forms of gambling ed from the Gaming Commission. An F2 licence
are considered a “game of chance”, and there- is used to take bets on behalf of an F1 licence
fore fall within the scope of the Act of 7 May 1999 holder. There is a maximum number of F1 and F2
on games of chance, gambling, gaming estab- licence holders. As is the case for casinos and
lishments and the protection of players (see 7.2 slot machine arcades, the staff in a betting shop
Contests of Skill and Games of Chance). must have a D licence.
According to the Act, a bet is a game of chance Participant Protection

where each player makes a stake, and the game Various obligations are imposed on organisers
results in gain or loss that is not dependent on with the aim of protecting participants in games
the acts of the one placing the bet but on the of chance. Furthermore, the minimum age of
occurrence of uncertain events that transpire participants in betting/gambling games must be
without the intervention of the players. A dis- at least 18 years old.
tinction is made between mutual betting and
fixed-odds betting. Gaming Commission
The Gaming Commission is the licensing and
Types of Betting supervising body. When a licensee violates regu-
There are three types of betting, all of which fall latory provisions, the Gaming Commission may
under the competence of the Gaming Commis- impose administrative sanctions consisting of
sion: a warning, the suspension of the operation of
some machines for a specified period of time,
• betting on events or occurrences; or the withdrawal of the licence. Infringements
• betting on sports events; and of the Act of 7 May 1999 may also be subject to
• betting on horse racing. criminal prosecution.
Locations to Place Bets 8.2 Special Rules & Regulations

Bets can in principle only be placed in betting Legal Framework
shops (class IV gaming establishments). There is The Act of 7 May 1999 on games of chance,
a distinction between fixed betting shops (class gambling, gaming establishments and the pro-
IV gaming establishments) and temporary bet- tection of players contains limitations on adver-
ting shops on the occasion of a (sports) event tising for games of chance, gambling and gam-
(class IV mobile gaming establishments): the ing establishments.
bookmakers.
Limitations for Advertising (Online) Games of
Outside these fixed and mobile betting shops, Chance
bets can also be taken: Limitations have also been imposed on adver-
tisements for online games of chance (including
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online betting/gambling). These can be found tion of Money Laundering and Terrorist Financ-
in the Royal Decree of 25 October 2018 on the ing and Limiting the Use of Cash (“AML Act”),
conditions for operating games of chance and defining virtual currencies as digital representa-
betting through information society instruments. tions of value that:
Self-Regulatory Code • are not issued or guaranteed by a central

In 2016, the Belgian Association of Gaming bank or a public authority;
Operators (BAGO) also drew up a self-regulatory • are not necessarily linked to a legally estab-
covenant for ethical and responsible advertising lished currency; and
and marketing of games of chance. • do not have the legal status of money or
currency, but are accepted as a medium of
However, the covenant is not sector-wide and exchange by natural or legal persons and can
currently only binds the six major private gaming be transferred, stored and traded electroni-
and betting companies in Belgium. cally.
Future Legal Developments Registration obligation for cryptocurrency

Partly in response to the fact that the number service providers
of gamblers has dramatically increased during Under the AML Act and the Belgian Royal Decree
the COVID-19 pandemic, the Belgian govern- of 8 February 2022 on the status and supervision
ment is preparing a new Royal Decree to ban all of service providers for the exchange of virtual
advertising for games of chance and gambling currency and fiat currency and custodian wallet
by the end of 2022. Sport sponsoring by gam- providers (“Virtual Currency Royal Decree”), as
bling operators would also be prohibited (albeit of 1 May 2022, persons established in Belgium
subject to a transition period). whose regular professional activity consists of
providing crypto-exchange services and offer-
General Advertising Rules ing custodian wallets on Belgian territory will be
Apart from the prohibitions and limitations set required to register with the FSMA. The regis-
out in the above-mentioned instruments, adver- tration requirement only applies to virtual cur-
tising for games of chance (including gambling/ rency service providers with a physical presence
betting) remains subject to the general rules on or permanent establishment in Belgium. Auto-
advertising as included in, for instance, the ELC. mated teller machines (ATMs) located on Belgian
territory allowing for the exchange between vir-
tual currency and fiat currency will be considered
9. Web 3.0 an establishment in Belgium and will trigger the
requirement to register with the FSMA. The obli-
9.1 Cryptocurrency and Non-fungible gation to register with the FSMA also applies to
Tokens (NFTs) regulated financial institutions (eg, credit insti-
Cryptocurrencies tutions, payment institutions, investment firms,
Definition etc) that provide or offer, in addition to their
In Belgium, cryptocurrencies are referred to as core services, crypto exchange services and/or
“virtual currencies”. A definition can be found in custodian wallet services. However, they will be
the Act of 18 September 2017 on the Preven- exempt from those registration conditions that
36 CHAMBERS.COM
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already apply to them as a result of their other sional clients. Virtual currency has been defined
regulated status. To obtain registration with the here as “any form of unregulated digital money
FSMA, virtual currency service providers must without legal payment capacity”.
comply with various registration conditions,
such as the requirement to possess professional Regulation on advertising for
reliability and appropriate expertise. In addition, cryptocurrencies
minimum capital and anti-money laundering On 19 July 2022, the existing Act of 2 August
(AML) requirements apply. Shareholders must 2002 on the supervision of the financial sector
also be fit to ensure sound and prudent man- and financial services (the “Financial Supervision
agement of the company. Act”) was amended to grant new supervisory
powers to the FSMA regarding the promotion of
Ban on third-country service providers who virtual currencies to non-professional investors.
provide services for the exchange between The FSMA is currently working on a draft regula-
virtual currencies and fiat currencies or offer tion to regulate the advertising and marketing of
custodian wallet services virtual currencies.
Under the AML Act and the Virtual Currency
Royal Decree, it is furthermore prohibited for Apart from the prohibitions and limitations set
natural or legal persons governed by the law out in the above-mentioned instruments, adver-
of a third country (non-EEA) to provide or offer tising for cryptocurrency remains in any event
on Belgian territory, as an ordinary professional subject to the general rules on advertising as
activity or even as an additional or complemen- included in, for instance, the ELC.
tary activity, services for the exchange between
virtual currencies and fiat currencies, or to offer Non-Fungible Tokens (NFTs)
custodian wallet services. EEA virtual currency There are currently no particular regulations in
providers can, on the other hand, freely provide Belgium concerning the advertising, marketing,
their services in Belgium on a cross-border basis or sale of non-fungible tokens (NFTs). However,
without being required to register with the FSMA advertising and marketing of NFTs should in any
(provided that they do not have a physical pres- event comply with general advertising and online
ence in Belgium). commercial communications regulations appli-
cable in Belgium.
Ban on the commercialisation of financial
products with financial return solely based 9.2 Metaverse
on a virtual currency to non-professional There are currently no particular regulations in
customers Belgium concerning the advertising of goods
As of 1 July 2014, the marketing of products that and/or services within the metaverse. However,
consist essentially of derivatives based on virtual advertising and marketing of such assets should,
currencies, such as Bitcoin, to retail clients in in any event, comply with general advertising
Belgium is also banned. The FSMA regulation to and online commercial communications regula-
this effect was approved by the Royal Decree of tions applicable in Belgium.
24 April 2014 for the approval of the regulation of
the FSMA on the prohibition of commercialisa-
tion of certain financial products to non-profes-
37 CHAMBERS.COM
Baker McKenzie
9.3 Digital Platforms Self-regulation

There are currently no Belgium-specific regula- Within the Belgian alcohol sector, a number of
tions that deal with digital advertising platforms companies and professional associations signed
and the use of adtech. However, advertising and a covenant regarding advertising and market-
marketing through such means should comply ing of alcoholic beverages. Under this covenant,
with general advertising and online commercial advertising may, for instance, not encourage
communications regulations applicable in Bel- irresponsible, excessive or illegal consumption,
gium. or be specifically aimed at minors. The covenant
furthermore requires advertising for alcoholic
beverages to be accompanied by an educational
10. Product Compliance slogan, such as “beer brewed with love is to be
drunk responsibly”.
10.1 Regulated Products
As mentioned in 1.1 Primary Laws and Regula- On an international level, the ICC issued a
tion, there are various specific rules and restric- Framework for Responsible Alcohol Marketing
tions in Belgium that apply to advertisements Communications.
of regulated products such as alcohol, tobacco,
food, medicines/medical devices and cannabis. Tobacco
The below is not intended to provide an exhaus- The Belgian Act of 24 January 1977 on the pro-
tive overview of such rules, but merely a brief tection of the health of users in the field of food
outline of the most important restrictions for and other products explicitly prohibits advertis-
each of these regulated products. ing for and sponsorship of tobacco products and
similar products (including electronic cigarettes)
Alcohol in Belgium. Advertising for non-tobacco-related
Legal framework products that are traded under a similar brand as
Under Belgian law, there is no general prohi- a tobacco product is in principle also prohibited,
bition on advertising for alcoholic beverages. subject to a few limited exceptions.
However, there are limitations on the broadcast-
ing of alcohol advertising by television broad- Food
casters and/or radio broadcasters. These limita- Legal framework
tions are included in the Flemish Decree of 29 Through EU Regulation 1169/2011 on the pro-
March 2009 on radio and television broadcasting vision of food information to consumers, the
and the French Decree of 4 February 2021 on EU legislator imposed a number of restrictions
audio-visual media services and video sharing on the advertising of foodstuffs. EU Regulation
services, both containing alcohol advertising 1924/2006 of 20 December 2006 on nutrition
and sponsorship restrictions for broadcasters. and health claims made on foods furthermore
For instance, broadcasted advertising for alco- imposes restrictions on the use of nutrition and
holic beverages may not be directed to minors, health claims. Additional food advertising rules
nor may it make an association between alcohol can also be found in other EU food law instru-
consumption and better physical performance ments.
or driving behaviour.
38 CHAMBERS.COM
Baker McKenzie
Self-regulation Associations (EFPIA) have issued such soft-

Self-regulating advertising codes regarding the law instruments, which often restate and clarify
advertising of foods include, for example, the pre-existing rules. In Belgium, there are several
EU Pledge and the Fevia Code on the Advertis- self-regulatory codes, such as the one issued
ing of Foodstuffs. At ICC level, there is also the by Pharma.be.
Framework for Responsible Food and Beverage
Marketing Communications. Cannabis
Cannabis (extracts) are not subject to the provi-
Medicines (Drugs) and Medical Devices sions of the Royal Decree of 6 September 2017
Legal framework regulating narcotic drugs and psychotropic sub-
The legal restrictions on the advertising of med- stances and therefore are not prohibited when
icines applicable in Belgium (ie, the Act of 25 the total tetrahydrocannabinol (THC) content is
March 1964 on medicines for human use and less than 0.2%. However, even if a product’s
the implementing Royal Decree of 7 April 1995 THC content is less than 0.2%, the use and
on the information and advertising in relation advertising of such product and its derivatives
to medicines for human use) are based on EU are subject to other rules. For example, prod-
Directive 2001/83/EC of 6 November 2001 on ucts bearing prophylactic or therapeutic indica-
the community code relating to medicines for tions are subject to the legislative framework on
human use. These rules require that promotional medicines. Advertising for products containing
statements relating to medicines be correct, and cannabidiol (CBD) intended for smoking is fur-
they prohibit the promotion of a medicine that thermore prohibited under the Act of 24 January
has not been registered, for which no market- 1977 on the protection of consumer health with
ing licence has been provided or that is subject regard to food and other products. More infor-
to a suspension or prohibition. There are also a mation can be found here.
number of restrictions that depend on the target
audience of the advertiser (ie, medical profes- 10.2 Other Products
sionals or consumers). Any form of advertising In addition to regulations described in 10.1 Reg-
targeted at consumers is in principle prohibit- ulated Products, other products may also be
ed when the advertising relates to prescription subject to advertising regulations. Some exam-
drugs, implantable medical devices, or drugs ples are listed below.
containing psychotropic substances or narcotics
within the meaning of the relevant international Weapons
conventions. Permitted advertising for over the Under Belgian law, companies may not adver-
counter medicines must also comply with a tise prohibited or licensed weapons without vis-
range of strict conditions. ibly indicating that the possession of a licence
is required (Article 19 of the Act of 8 June 2006
Self-regulation regulating economic and individual activities
Various self-regulatory codes are also in place to with weapons).
deal with advertising for medicines and medical
devices. At the international level, for example, Lotteries and Games of Chance
both Medicines for Europe and the European See 7. Sweepstakes and Other Consumer Pro-
Federation of Pharmaceutical Industries and motions and 8. Sports Betting/Gambling.
39 CHAMBERS.COM
Baker McKenzie
Motor Vehicles
Legal framework
Under Belgian law, advertisements for motor
vehicles should include a warning about the driv-
er’s responsibility to drive safely. In addition, in
Belgium, any printed ‒ or printable ‒ advertising
material must contain information about the fuel
consumption and CO₂ emissions of passenger
cars (Articles 7 and 8 of the Royal Decree of 5
September 2001 concerning the availability of
consumer information on fuel consumption and
CO₂ emissions upon the placing on the market
of new passenger cars).
Self-regulation
In Belgium, the advertising of motor vehicles is
also subject to self-regulation (Code on Adver-
tising of Motor Vehicles, their Parts and Acces-
sories).
Regulated Professions
In Belgium, the advertising of regulated profes-
sions is also strictly regulated, be it by specific
legal provisions (eg, dentists and some eco-
nomic professions) or deontological codes (ie,
on the basis of a mandate expressly obtained
by the legislative (eg, lawyers or notaries) or the
executive branch (eg, physicians, pharmacists))
in order to protect the honour, modesty, honesty
and dignity of the relevant professions.
40 CHAMBERS.COM
Baker McKenzie
Baker McKenzie is one of the few truly global fice provides a full range of legal services, with
law firms, with 77 offices in 46 countries. Baker particular expertise in corporate finance, bank-
McKenzie provides first-class legal and coming and finance (including regulatory financial
mercial advice to some of the largest national services), tax, real estate and construction, em-
and multinational corporations, international in- ployment, IT, commercial, trade, environmental,
vestment banks, private equity firms and other intellectual property, dispute resolution, food
financial institutions. With over 50 years of ex- and healthcare law.
perience in the local market, the Brussels of-
Authors
Geert Bovy is a partner in the Joost Vynckier is a senior
Brussels office of Baker associate in the Brussels office
McKenzie and heads the of Baker McKenzie. Joost
International Commercial & obtained a PhD in the field of
Trade practice group in Europe, commercial, sports and
the Middle East, and Africa marketing law at the University
(EMEA) and Belgium. Geert advises clients on of Leuven. He joined Baker McKenzie in 2018.
all aspects of commercial and consumer Joost advises clients on all aspects of
protection law. He also advises clients on International Commercial & Trade, covering
regulatory issues, marketing, promotion, domestic and cross border agreements and
labelling and advertising of consumer transactions. He has particular experience with
products, particularly food products, drafting and negotiating a wide range of
pharmaceuticals and medical devices. He commercial agreements (including distribution,
often works on pan-European projects, agency and franchising). He is also active in
assisting clients in managing the differences the fields of business, trade, marketing,
between EU member states’ local laws in a advertising and sports law. His practice
co-ordinated manner. His practice also furthermore includes commercial litigation and
includes commercial litigation, including settlement negotiations.
pre-litigation assistance, litigation and
settlement negotiations.
41 CHAMBERS.COM
Baker McKenzie
Sebastian Tytgat is a senior Elisabeth Dehareng is a partner

associate in the Baker McKenzie in Baker McKenzie’s Brussels
International Commercial & office. Elisabeth and her team
Trade practice group in the advise clients in all fields of IT, IP
Brussels office. Sebastian has and new technology law, with a
also been a teaching assistant in special focus on data and tech
civil procedure at the University of Leuven regulations, in the field of which they provide
since 2018. Sebastian most notably advises strategic advice on cross-border data
national and international clients in contentious transfers, digital media and online applications.
matters before judicial courts (including Elisabeth focuses on providing strategic data
assistance in pre-litigation management and privacy and security advice in a multinational
settlement negotiations). He also advises and digital environment, addressing trends
clients in various legal aspects of civil such as e-marketing, cybersecurity, big data,
procedure, business, commercial, antitrust and machine learning and AI, data governance and
consumer protection law as well as drafting ethics. Privacy enforcement and litigation is
and negotiating a wide range of commercial also within her expertise. Elisabeth is
agreements. International Association of Accessibility
Professionals (IAPP) certified.
Hannah Matthys is a junior

associate in the Brussels office
of Baker McKenzie. She joined
the firm in 2021. Hannah
graduated from Ghent
University, after completing an
exchange programme at American University
Washington College of Law in the United
States (2021). As a member of the International
Commercial & Trade department, Hannah
assists in the drafting of various commercial
agreements and the provision of (pre-)litigation
services. She also advises clients on an array
of commercial matters, such as product
labelling requirements, product liability and
recalls, sales promotion and marketing rules.
42 CHAMBERS.COM
Baker McKenzie
Baker McKenzie
Manhattan
Bolwerklaan 21 Avenue du Boulevard
BE - 1210 Brussels
Belgium
Tel: +32 2 639 36 11

Fax: +32 2 639 36 99
43 CHAMBERS.COM
BOSNIA & HERZEGOVINA
Slovenia
Law and Practice

Croatia
Bosnia & Serbia
Contributed by: Herzegovina

Mirna Milanović-Lalić and Robert Vrdoljak Sarajevo
bh.legal - Law Office Mirna Milanović-Lalić see p.64 Italy Montenegro
Contents
44 CHAMBERS.COM
BOSNIA & HERZEGOVINA Law and Practice
Contributed by: Mirna Milanović-Lalić and Robert Vrdoljak, bh.legal - Law Office Mirna Milanović-Lalić
1. Legal Framework and • Electronic Legal and Commercial Transac-

Regulatory Bodies tions Law of the BiH (general principles of
electronic communications);
1.1 Primary Laws and Regulation • the Medicinal Products and Medical Devices
Bosnia and Herzegovina (BiH) is composed of Law of the BiH and its by-laws (specific rules
the Federation of Bosnia and Herzegovina (FBiH) regarding advertising medicinal products and
and Republika Srpska (RS) – two entities with medical devices);
their own legislation – and the Brčko District (BD) • the Food Act of the BiH and its by-laws
– a special administrative unit. Applicable adver- (specific rules regarding labelling/advertising
tising rules may be adopted on: food);
• the Food Act of the RS and its by-laws
• the state level – the BiH, in which case they (entity-specific rules regarding labelling/
apply in both the FBiH and the RS, as well as advertising food);
in the BD; or • the Internal Trade Act of the FBiH (entity-spe-
• the entity or the administrative unit-specific cific unfair competition principles);
level, in which case the rules apply only in the • the Trade Act of the RS (entity-specific unfair
entity (the FBiH or the RS) or the unit (the BD). competition principles);
• the Trade Act of the BD (administrative unit
In general, advertising in the BiH is not regulated specific unfair competition principles);
by a specific act; instead, the advertising rules • the Law on Games of Chance of the FBiH
are found in numerous general and sector spe- and its by-laws (entity-specific rules regarding
cific laws and regulations. The most important advertising games of chance);
ones include: • the Law on Games of Chance of the RS and
its by-laws (entity-specific rules regarding
• the Consumer Protection Law of the BiH advertising games of chance);
(general advertising rules and commercial • the Law on Games of Chance of the BD and
practices); its by-laws (administrative unit-specific rules
• the Consumer Protection Law of the RS (gen- regarding advertising games of chance);
eral entity-specific general advertising rules • the Law on Copyright and Related Rights of
and commercial practices); the BiH (intellectual property specific);
• the Law on Prohibited Advertising of the FBiH • the Trademark Act of the BiH (trade mark
(general entity-specific prohibited advertising specific);
rules); • the Competition Law of the BiH (competition
• the Law on Prohibited Advertising of the RS principles);
(general entity-specific prohibited advertising • the Data Protection Law of the BiH (personal
rules); data protection); and
• the Communications Law of the BiH (general • the Law on Contracts and Torts of the FBiH
communications principles) and its by-laws and the Law on Contracts and Torts of the RS
specifically including the Code of Commercial which apply as general acts (lex generalis).
Communications of the BiH (specific rules
regarding audio-visual and radio services Apart from those noted above, there are other
commercial communications); laws and regulations that contain advertising
45 CHAMBERS.COM
rules - please see 10.1 Regulated Products and • to refund the unjustified enrichment.
10.2 Other Products.
The parties to the court proceedings may seek a
Additionally, self-regulation is present in the legal remedy against the decisions of the courts
media sector (for more information please see as there are both ordinary and extraordinary
1.4 Self-Regulatory Authorities) and there are legal remedies available.
special public and electoral rules.
Sector specific laws and regulations are also
Although it is not a member state of the Europe- enforced by administrative bodies (regulatory
an Union, the BiH intends to join the EU and has agencies, ministries, inspection authorities and
entered into the Stabilisation and Association other bodies). For example:
Agreement. Consequently, the BiH is continu-
ously (although slowly) harmonising its laws and • the communications-specific laws and regu-
regulations with the EU regulations and direc- lations are enforced by the Communications
tives. As a result, most of the above-mentioned Regulatory Agency of the BiH;
laws and regulations are partly harmonised with • the food-specific laws and regulations are
the older generation of EU legislation. enforced by the Food Agency of the BiH;
• the medicinal products and medical devices
1.2 Enforcement and Regulatory laws and regulations are enforced by the
Authorities Agency for the Medicinal Products and Medi-
Due to the specific distribution of the advertis- cal Devices of the BiH; and
ing rules in the BiH (see 1.1 Primary Laws and • the games of chance laws and regulations are
Regulation), compliance with the advertising enforced by subject government bodies in the
rules is enforced in different ways. entities and the special administrative unit of
the BiH.
In principle, the laws and regulations (especially
with respect to unfair competition principles Specifically for B2C relationships, the most
and misleading/prohibited/prohibited compara- important factors are the supervision of the
tive advertising) are enforced by the competent inspection authorities and consumers’ ability to
courts in the BiH; the laws on prohibited adver- file a petition with the inspection authorities.
tising (both in the FBiH and in the RS) stipulate
special proceeding rules for such cases. In rela- On a case-by-case basis, the administrative
tion to unlawful advertising, consumers, the bodies may act ex officio or based on a com-
relevant organisations and authorised entities plaint filed by an interested party. Sanctions and
in general can file a claim against an advertiser remedies in administrative proceedings may
and seek an injunction measure. Remedies in include:
court proceedings include:
• financial penalties (fines);
• a court order to refrain from unlawful conduct; • an order to withdraw/ban the unlawful adver-
• an obligation to remedy the negative conse- tisement from the market, even without proof
quences of the unlawful conduct; of actual loss, damage, intent or negligence
• to compensate the damages; and/or from the advertiser’s side;
46 CHAMBERS.COM
• an order to issue a corrective statement to their owners/shareholders may also be respon-

the public (regarding unlawful advertise- sible and have liabilities.
ments); and
• an order to refrain from further unlawful In other types of business entities, the owners/
actions. shareholders may have personal liability and
responsibility.
In general, the parties (subjects) to the adminis-
trative proceedings may seek a remedy against Together with the advertisers, advertising agen-
the decisions of the first-instance administra- cies are also responsible and liable for breach of
tive bodies with second-instance administrative laws and regulations.
bodies. Against the final administrative deci-
sions, the subjects may initiate an administrative 1.4 Self-Regulatory Authorities
dispute before the competent court. The only self-regulatory authority (body) in the
BiH with ties to advertising practices is the Press
In addition to the above, in certain cases, an Council in the BiH, which operates in the print
advertiser that breached the advertising rules and online media sectors.
may become subject to criminal proceedings.
Also, self-regulatory bodies may also have com- The Press Code of the BiH states the following.
petence to enforce the advertising rules (see 1.4
Self-Regulatory Authorities). “It is unethical to present covert advertisements
as well as ordered and paid for texts as original
1.3 Liability for Deceptive Advertising journalistic ones.”
Both natural and legal persons may be held
liable for deceptive advertising; sanctions may An interested party may file an appeal against
be imposed on both. However, some violations the media subject with the Press Council of the
can only be made by legal persons because of BiH if the Press Code of the BiH has been (alleg-
their nature. edly) breached. However, in the procedure, the
Press Council of the BiH is limited to suggest-
In general, advertisers (typically business enti- ing text corrections and denials to the media
ties) are primarily responsible and can be held subject. Consequently, in practice, the Press
liable for deceptive advertising. Council of the BiH has very limited authority on
advertising practices in the BiH.
In the BiH, most business entities are incorpo-
rated as either limited liability companies (local 1.5 Private Right of Action for
“doo” companies) or joint-stock companies Consumers
(local “dd” companies). These companies and Advertising rules in the BiH are found in numer-
their corporate bodies are, in general, solely and ous general and sector specific laws and regu-
directly responsible for breaches of laws and lations (see 1.1 Primary Laws and Regulation).
regulations. However, the companies’ author- Depending on which law and/or regulation has
ised persons may also be fined in their private been allegedly breached, consumers may either
capacity; also, in extraordinary circumstances, take actions with public authorities (administra-
tive bodies) or the competent courts.
47 CHAMBERS.COM
If consumers consider any advertising as breach- 1.7 COVID-19, Regulation & Enforcement
ing (consumer-related) advertising laws and The pandemic has not had a long-term effect
regulations, they may file a complaint with the on the regulation of advertising and the enforce-
administrative body, which may initiate admin- ment of advertising laws and regulations. During
istrative proceedings and eventually issue sanc- the peak of the pandemic, the authorities made
tions and/or remedies. The authority may issue a some decisions that had a temporary impact on
financial penalty (fine) to the advertiser and/or its the dissemination of information.
advertising agency. For a list of other sanctions
and remedies, please see 1.2 Enforcement and For example, in 2020, the RS and the BD
Regulatory Authorities. Consumer protection authorities issued acts/commands to prohibit
associations may also take these actions in the the spread of false information, with sanctions
name of the consumers. included. This was a consequence of informa-
tion spreading in media during the peak of the
Consumers may also take private right of action pandemic, and its role was to stop the spread-
(file a claim) with the competent court where an ing of misinformation. The text of the acts was
advertiser breaches laws and regulations that formulated generally: any publicly presented
contain advertising rules. They may claim an and transmitted false news and information in
adequate financial redress as well as compen- any way related to COVID-19 that may cause
sation for damages. For a list of other remedies fear and panic or otherwise negatively affect the
available in court proceedings, see 1.2 Enforce- implementation of measures to protect the pop-
ment and Regulatory Authorities. ulation from the pandemic was encompassed by
the acts. Their interpretation was left to compe-
1.6 Regulatory and Legal Trends tent authorities and courts.
There have been no specific (publicly known)
legal/regulatory trends nor cases regarding Specifically for advertising, during the peak of
deceptive advertising in the BiH in the past 12 the pandemic, the media was reporting heav-
months. ily on cases of deceptive advertising and other
types of unlawful advertising related to fake
The BiH has committed to joining the EU and medicines, fake medicinal properties, misinfor-
is in the process of harmonising its legislation mation, etc, but there are no known outcomes. If
(including advertising rules) with the acquis com- anything, although there have been no important
munautaire. However, due to political climate, developments in the long-term, as a result, the
the harmonisation has been at a standstill in the advertising rules and practices have gathered
last 12 months. attention from the public. Also, the responsibility
of the media and online platforms for dissemi-
Several cases of (alleged) deceptive advertising nation of unlawful advertising began to be dis-
practices have been mentioned in the media, cussed more frequently among professionals.
with no known outcomes. One of the cases
involves a youth football team that advertises 1.8 Politics, Regulation and Enforcement
gambling services on their equipment. In 1.6 Regulatory and Legal Trends it is not-
ed that legal/regulatory trends have been at a
standstill due to political climate in the BiH. Con-
48 CHAMBERS.COM
sequently, there have been no recent changes in contains an almost identical definition of mis-
jurisdiction that have impacted the regulation of leading advertising.
advertising and/or the enforcement of advertis-
ing regulations. Both the definitions (deceiving and misleading
advertising) are very broad and general. There-
fore, in theory, the mere potential to mislead a
2. Advertising Claims consumer and affect their economic behaviour
may be enough to constitute a breach of the
2.1 Deceptive or Misleading Claims laws.
The Consumer Protection Law of the BiH defines
deceptive advertising as advertising messages 2.2 Regulation of Advertising Claims
and actions that: The laws and regulations in the BiH which con-
tain advertising rules (please see 1.1 Primary
• deceive or may deceive consumers and Laws and Regulation) stipulate general and
therefore affect their economic behaviour; or broad definitions of unlawful advertising (see
• harm or may harm other participants in the also 2.1 Deceptive or Misleading Claims). So,
market, which includes using small letters, both express and implied advertising claims are
numbers, pictures and signs to deceive the subject to regulation.
consumer on important elements of the offer/
placement, especially regarding the price of a The laws and regulations contain a general pro-
product or service. vision which allows consumers’ associations
and authorised persons to, at any time, seek an
The law further stipulates that deceptive adver- expert opinion from the competent informing
tising exploits or may exploit inexperience or body on the lawfulness of an advertising mes-
ignorance, or divert the attention of consum- sage. The opinions are provided on a case-by-
ers from important elements of the offer/place- case basis.
ment, for profit-making purposes. Advertising
messages and actions that contain ambiguities, Furthermore, in the administrative proceedings,
untruths, exaggerations or other similar ele- administrative bodies may ask advertisers to
ments that deceive or may deceive consumers submit evidence of claims made in the adver-
are also included in the definition. tisement. The bodies may deem such claims to
be false if the required evidence is not provided
The Law on Prohibited Advertising of the FBiH or if the provided evidence is deemed insuffi-
defines misleading advertising as advertising cient in accordance with the applicable admin-
that, in any way (including by its presentation), istrative proceedings’ rules.
misleads or may mislead the persons to whom
it is directed or whom it reaches, and therefore In civil proceedings, generally, the courts decide
may affect their economic behaviour, in other within the limits of the requests made in a claim
words, advertising that for the reasons stated and based on the evidence submitted by the
harms or may harm other market participants. parties. According to the applicable principle of
The Law on Prohibited Advertising of the RS free evaluation of evidence, the court will decide
which facts will be considered as proved, based
49 CHAMBERS.COM
on free evaluation of evidence. The competent • advertising of medical devices must be in

court will conscientiously and meticulously eval- accordance with the approved instructions;
uate each individual piece of evidence and all and
evidence as a whole. • it is prohibited to advertise pharmaceutical
products and medical devices that are avail-
2.3 Substantiation of Advertising Claims able on medical prescription only.
The market requires fluidity and a high speed
of action; therefore, substantiation is generally The food, supplements and infants formula sec-
not specifically required for making advertising tors also have similar special advertising rules
claims, meaning there is no regulatory body in (good information practices). According to the
charge of pre-clearing the conformity of adver- food acts and their by-laws, information about
tising. food, supplements, etc:
However, one of the main principles of the con- • must not mislead the consumer/customer as
sumer protection laws states that “advertising of to characteristics, effects or properties; and
products and services must not contradict laws • must not hint at special characteristics when
and other regulations, must not offend human in fact all similar foods have such characteris-
dignity, and must not violate basic human, eco- tics and similar
nomic, social and cultural rights”. So, consum-
ers generally have the right to receive true and These also apply to advertising claims.
accurate information on advertised products
or services. Advertisers should, therefore, be 2.4 Testing to Support Advertising Claims
ready to prove the accuracy of their claims if a There are no general testing standards to support
competitor and/or a consumer challenges them the advertising claims. However, it is in an adver-
or if government bodies ask for evidence that tiser’s best interest to support its claim about
supports the advertising claims (please see 2.2 products or services with sufficient evidence in
Regulation of Advertising Claims). case it is challenged by the authorised entities
(see 2.3 Substantiation of Advertising Claims),
Substantiation is particularly important for com- especially because the definitions of unlawful
parative advertising claims and advertising advertising are general and broad (please see
claims made in regulated industries. To some 2.1 Deceptive or Misleading Claims).
regulated industry products, the substantiation
correlates to their market authorisation (authori- Additionally, the laws on prohibited advertising
sation to place the product on the BiH market). also provide additional considerations when
For example, in line with the Medicinal Products assessing misleading advertising claims, includ-
and Medical Devices Law of the BiH and its by- ing the following.
laws:
• Characteristics of goods and services such
• advertising of medicinal products must be in as:
accordance with the approved instructions (a) their nature;
and summarise the main characteristics of (b) their composition;
the medicinal product; (c) method and date of production/service
50 CHAMBERS.COM
provision; 2.6 Representation and Stereotypes in

(d) availability; Advertising
(e) quantity. There are no special laws or regulations that
• The price or the method of price formation, as address stereotyping in advertising, but inclu-
well as the conditions under which goods are sion, diversity and equity take a special place in
sold or services provided. the BiH legislation due to its specific organisa-
• The nature, properties and rights of the tion (please see 1.1 Primary Laws and Regula-
advertiser, such as its identity, assets, qualifi- tion), history and general political climate.
cations, etc.
The Law on Prohibition of Discrimination of the
Therefore, subject testing may include any of BiH designs a framework for implementation of
the considerations above. For regulated indus- equal rights and opportunities to all persons in
tries (such as medicinal products and medical the BiH and defines a system of protection from
devices, and food/supplements) which are under discrimination.
special advertising industry rules (see 2.3 Sub-
stantiation of Advertising Claims), the testing The law defines discrimination as any different
may also be, in addition to general standards, treatment including any exclusion, limitation or
connected with such special rules. preference based on real or perceived grounds
towards any person or group of persons, their
2.5 Human Clinical Studies relatives, or persons otherwise associated with
Only registered medicinal products and medical them, on the grounds of:
devices (with the BiH market authorisation) can
be placed on the local market. As noted in 2.3 • race;
Substantiation of Advertising Claims, advertis- • skin colour;
ing of medicinal products and medical devices • language;
must be in line with the instructions, ie, data • religion;
approved by the BiH regulatory body. • ethnic affiliation;
• disability;
The registration process is formal, costly and • age;
long. The competent regulatory body rigorously • national or social background;
examines and reviews clinical studies and other • connection to a national minority;
documentation, in line with the Law on Medicinal • political or other persuasion;
Products and Medical Devices of the BiH and its • property;
by-laws, which are sector specific rules. • membership in trade union or any other asso-
ciation;
If certain data has not been approved by the • education;
competent regulatory body, it must not be • social status and sex;
claimed in an advertisement. Specifically, if • sexual orientation;
clinical study data has not been approved, the • gender identity;
advertiser must not claim it in an advertisement. • sexual characteristics; and
• any other circumstance serving the purpose
of or resulting in prevention or restriction of
51 CHAMBERS.COM
any individual from enjoyment or realisation, ket competitor, or goods or services offered by
on equal footing, of rights and freedoms in all the market competitor.
areas of life.
Generally, comparative advertising in the BiH
The prohibition applies to all public bodies, and is allowed in the interest of public and healthy
all natural and legal persons in the public and competition, provided that the principle of fair
private sectors, in all spheres. It directly and indi- competition is conformed with. The Consum-
rectly effects advertising and marketing. er Protection Law of the BiH goes into detail
and stipulates that comparative advertising is
2.7 Environmental Claims allowed if it:
The applicable laws and regulations forbid
advertisements that contain statements or vis- • compares goods and services that meet the
ible representations that, directly or indirectly, by same needs or are intended for the same
omission, vagueness, or exaggeration, mislead purpose,
consumers in relation to impact on the envi- • compares one or more material, relevant,
ronment of product or service. Generally, any confirmed and representative characteristics
harmful behaviour towards the environment is of goods and services,
forbidden. • does not create confusion on the market
between promoters and market competitors;
2.8 Other Regulated Claims • does not discredit or degrade trade marks,
All advertising claims must comply with the gen- trade names, or other recognisable marks,
eral advertising rules, and regulated industry goods, or services of market competitors;
advertising claims must also comply with any • does not abuse the reputation of a trade
applicable industry specific rules. As noted in 2.3 mark, trade name, or other recognisable
Substantiation of Advertising Claims, consum- marks of a market competitor or the indicated
ers generally have the right to receive true and origin of the competitor’s products;
accurate information on advertised products or • does not represent goods or services as
services. imitations or replicas of goods and services
bearing trade marks or trade names.
Aside from specific regulated claims, there are
also special rules regarding trade marks. Name- Argumentum a contrario, everything that is not
ly, a trade mark owner may forbid the use of their allowed by the above rules constitutes unlawful
trade mark in an advertisement. comparative advertising for which advertisers
may be fined/liable for damages in general.
3. Comparative Advertising Other laws and regulations (please see 1.1 Pri-
mary Laws and Regulation) also contain defini-
3.1 Specific Rules or Restrictions tions of comparative advertising and additional
The Consumer Protection Law of the BiH sets provisions on this type of advertising. For exam-
forth that comparative advertising is any adver- ple, the laws on prohibited advertising specify
tising that explicitly or implicitly identifies a mar- when comparative advertising is unlawful, as
opposed to the Consumer Protection Law which
52 CHAMBERS.COM
specifies the circumstances in which it is permis- face the same challenges as other industries.
sible; however, the essence of the rules (provi- As such, scattered advertising laws and regula-
sions) is the same. tions (see 1.1 Primary Laws and Regulation),
generality of advertising-related provisions (see
Comparative advertising may also be consid- 2.1 Deceptive or Misleading Claims) and lack
ered a misleading commercial practice, from the of publicly known practices of authorities and
perspective of the consumer laws. courts in regard to the application of advertising
rules lead to further uncertainty and legal inse-
3.2 Comparative Advertising Standards curity.
Generally, comparative advertising claims are
subject to the same standards as other types There are other challenges arising from social
of advertising. For special rules regarding com- media advertising, both for regulators and mar-
parative advertising, see 3.1 Specific Rules or keters. For example, it is difficult to secure evi-
Restrictions. dence about breaches of advertising laws and
regulations. Also, the marketers’ responsibilities
3.3 Challenging Comparative Claims can be unclear: in some cases, marketers can-
Made by Competitors not stop dissemination via social media even if
The advertiser may challenge claims made by they have removed the content/claim. Further-
a competitor in the civil law proceedings before more, it may be hard for advertisers/marketers
the competent court and obtain remedies to research and comply with both:
(please see 1.2 Enforcement and Regulatory
Authorities). • local laws and regulations; and
• social media platforms’ specific advertising
rules.
4. Social/Digital Media
4.3 Liability for Third-Party Content
4.1 Special Rules Applicable to Social The liability of advertisers for third-party content
Media on their social media channels is generally limit-
The BiH laws and regulations do not differen- ed, in line with the Electronic Legal and Commer-
tiate social media advertising from other types cial Transactions Law of the BiH, which is partly
of advertising. Therefore, the (general) advertis- harmonised with the E-commerce Directive of
ing rules found in various laws and regulations the EU. Therefore, damage claims are generally
(see 1.1 Primary Laws and Regulation), includ- not available against advertisers. However, this
ing those covering specific sectors and prac- does not necessarily exclude advertisers from
tices (eg, unfair commercial practices) related to injunction and/or deletion claims issued by the
advertising, also apply to social media advertis- competent courts/authorities.
ing.
Also, if an advertiser is notified about illicit con-
4.2 Key Legal Challenges tent and does not remove it, the advertiser could
As noted in 4.1 Special Rules Applicable to become culpable (jointly with the main infringer)
Social Media, there are no advertising rules spe- for the illicit post. In such a case, a damage claim
cific to social media in the BiH, so marketers might be possible.
53 CHAMBERS.COM
4.4 Disclosure Requirements must not encourage potentially harmful behav-

The same disclosure requirements that apply to iour.
advertising in general also apply to social media
advertising. As noted in 2.3 Substantiation of The COVID-19 pandemic had an impact on the
Advertising Claims, consumers generally have treatment misinformation (see 1.7 COVID-19,
the right to receive true and accurate information Regulation & Enforcement).
on advertised products or services, and the laws
and regulations in the BiH that contain advertis-
ing rules (see 1.1 Primary Laws and Regulation) 5. Social Media Influencer
stipulate general and broad definitions of unlaw- Campaigns and Online Reviews
ful advertising (see 2.1 Deceptive or Misleading
Claims), so not making appropriate disclosure 5.1 Trends in the Use of Influencer
may be considered unlawful, although this it Campaigns
would be considered on a case-by-case basis. The use of influencers in advertising campaigns
has significantly increased in recent years. Many
Radio and television broadcasting sectors have business subjects in the BiH now consider using
special advertising disclosure requirements, and local (or regional) influencers as a part, or in the
these do not explicitly apply to social media. spotlight, of their marketing campaigns. The
Also, in the RS, the consumer law explicitly growth and importance of influencers is obvious.
stipulates the need to disclose the advertising
content as “paid promotion” or similar, otherwise Instagram and YouTube have created an entire
it is considered a breach of commercial practice new wave of local and regional influencers. As
rules. more and more advertisers prefer targeting spe-
cific audiences, this has made influencers per-
4.5 Requirements for Use of Social fect “tools” to disseminate content.
Media Platform
Please see 4.1 Special Rules Applicable to The absence of a language barrier between
Social Media. some ex-Yugoslavian countries, (eg, the BiH,
Croatia, Serbia and Montenegro) and the “dias-
4.6 Special Rules for Native Advertising pora”, BiH citizens or ex-citizens living abroad
There are no special rules that apply to “native (especially in Germany and Austria), result in
advertising” on social media. However, general the size of the market for local influencers being
principles apply (see 4.1 Special Rules Applica- raised to more than 20 million. For this reason,
ble to Social Media and 4.4 Disclosure Require- a company operating, for example, in the BiH,
ments). Croatia, Montenegro and Serbia may engage
the same influencer to promote their products/
4.7 Misinformation services across all those countries. Alternatively,
There are no specific rules for misinformation on they may start the marketing campaign in one
topics of public importance. However, advertis- of the countries, but it is still likely to have an
ing must not in any way abuse and/or manipu- impact in other countries via the online platforms
late with superstition, the fears or credulity of or other disseminating tools. This offers numer-
individuals or the public. Likewise, advertising
54 CHAMBERS.COM
ous possibilities for influencers and those inter- Notwithstanding, if there is a causal connection
ested in using them. between “fake reviews” and consequent dam-
ages, the damaged party may file a claim for
5.2 Special Rules/Regulations on compensation of damages with the competent
Influencer Campaigns court. Such a claim would be considered based
Even though influencer-related advertising has on the applicable laws of contracts and torts.
become important in recent years (see 5.1 However, it is often hard to identify the person
Trends in the Use of Influencer Campaigns), who made the “fake reviews” and civil claims
there are no special rules or regulations that cannot be filed against non-identified persons.
apply to it exclusively.
If such damages were caused by employees of
However, the (general) advertising rules found a company, then their employer could also be
in various laws and regulations (see 1.1 Primary liable, as per the following rules:
Laws and Regulations), including those cover-
ing specific sectors and practices connected to • if the employer is responsible for the dam-
advertising, also apply to influencer campaigns. age that the employee caused to a third party
in the course of work or in connection with
5.3 Advertiser Liability for Influencer the work, unless it proves that the employee
Content acted as they should have in the given cir-
Generally, advertisers are not liable for content cumstances;
posted by their influencers because persons in • the damaged party has the right to demand
the BiH have personal liability for their actions compensation directly from the employee if
and/or omissions. However, if the advertiser has the employee caused the damage intention-
control over an influencer’s unlawful actions, ally; and
then they both may be held (jointly) liable for • the employer who compensated the dam-
breach of laws and regulations. aged party for the damage caused by the
employee, intentionally or in gross negli-
Laws and regulations in the BiH containing gence, has the right to demand compensa-
advertising rules (see 1.1Primary Laws and tion from the employee for the amount paid.
Regulation) stipulate general and broad defini-
tions of unlawful advertising (see 2.1 Deceptive
or Misleading Claims), and also broadly define 6. Privacy and Advertising
the responsibility of both advertisers and their
agencies (see 1.5 Private Right of Action for 6.1 Email Marketing
Consumers), so each situation should be exam- The general advertising rules apply to email mar-
ined on a case-by-case basis. keting (see 1.1 Primary Laws and Regulation).
In addition, there are specific rules stipulated by
5.4 Misleading/Fake Reviews the Electronic Legal and Commercial Transac-
The topic of “fake reviews” has not been tions Law of the BiH and the Data Protection
addressed by the authorities in the BiH, even Law of the BiH.
though it is widely discussed in public.
55 CHAMBERS.COM
The consumer protection laws set forth the gen- • oppose the data controller’s further use or
eral principle that, without the consumer’s prior transfer of their personal data for the purpose
consent, the trader may not use means of dis- of direct marketing; and
tant communication with the consumer, such as • be notified before their personal data is
telephone, fax, email, etc. Also, the Consumer transferred for the first time to a third party for
Protection Law of the RS stipulates that continu- direct marketing purposes.
ously addressing the consumer via telephone,
fax, email, etc, represents an unlawful aggres- For breaching the above rules, the advertisers
sive commercial practice. may be sanctioned primarily:
As for the specific rules, the Electronic Legal and • under the consumer protection laws (general
Commercial Transactions Law of the BiH defines rules), with a fine up to (about) EUR4,000;
“commercial communications” as advertising • under the Electronic Legal and Commercial
and other forms of communication that promote, Transactions Law of the BiH, with a fine up
directly or indirectly, goods and services, or the (about) EUR3,000; and
reputation of a company (entrepreneur), organi- • under the Data Protection Law of the BiH,
sation or person engaged in commercial, indus- with a fine up to (about) EUR25,000.
trial or craft activity. That said, email marketing
is considered as “dissemination of commercial 6.2 Telemarketing
communications” and according to the law, the The general advertising rules apply to telemar-
commercial communications must clearly and keting (see 1.1 Primary Laws and Regulation
unambiguously: and 6.1 Email Marketing), as well as specific
regulations stipulated by the Data Protection
• be recognisable as such; Law of the BiH, which are the same as for email
• indicate at whose request it has been made; marketing (please see 6.1 Email Marketing).
• indicate promotional offers, such as price
reductions, premiums, and prizes, as such, as Notwithstanding the above, please note that
well as the conditions that must be fulfilled to unsolicited telemarketing is not explicitly pro-
use them; and hibited in itself and that the authorities in the
• indicate promotional contests or games as BiH have not established a “no-call” register, as
such, as well as the conditions that must be exists in the EU countries.
met to participate in them.
6.3 Text Messaging
The Communications Regulatory Agency of the Please see 6.1 Email Marketing, as the same
BiH should keep an opt-out register for email applies to text messaging.
communications.
Please note that the “no-call” (including SMS/
Additionally, the Data Protection Law of the BiH MMS) register has not been established in the
specifies a general opt-out regime for direct mar- BiH.
keting. The law does not differentiate between
different forms of marketing and stipulates that
data subjects have the right to:
56 CHAMBERS.COM
6.4 Targeted/Interest-Based Advertising ing minors; therefore, advertising messages

The Data Protection Law of the BiH specifies must not be unethical, act unworthy, or fraudu-
a general opt-out regime for direct marketing lent, or contain elements that cause or could
(including if connected with targeted/interest- cause physical, mental or other harm to chil-
based advertising). The law does not differen- dren, or contain elements that exploit or abuse,
tiate between different forms of marketing and or could abuse, their gullibility or inexperience.
stipulates that data subjects have the right to: Further, the RS laws consider encouragement of
children through advertisements to buy or influ-
• oppose the data controller’s further use or ence parents or other adults to buy for them as
transfer of their personal data for the purpose (unlawful) aggressive business practices.
of direct marketing; and
• be notified before their personal data is Aside from the general principles, special rules
transferred for the first time to a third party for related to advertising to children are found
direct marketing purposes. throughout various sector-specific laws and
regulations (see 1.1 Primary Laws and Regu-
For breaching the above rules, the advertiser lation). For example, regarding television and
may be fined up to (about) EUR25,000. radio broadcasting, the Communications Law
of the BiH and its by-laws (Code of Commercial
As targeted/interest-based advertising is now Communications of the BiH) set forth general
mostly connected with “cookies” (tracking tech- principles:
nologies), it is worth pointing out that tracking
technologies have not yet been regulated in • commercial communications that encourage
the BiH, but the general data protection prin- behaviour that could endanger the health,
ciples from the Data Protection Law of the BiH psychological and/or moral development of
also apply to them. In practice, this means that children are prohibited; and
potential subjects of tracking technologies must • commercial communications intended for
give consent for their use and be informed on all children or involving children will avoid any-
aspects of processing of their personal data in thing that could endanger their interests and
connection with the technologies. shall be considerate of their special sensitiv-
ity.
6.5 Marketing to Children
In BiH, a child is defined as any person under Code of Commercial Communications of the
the age of 18 and, generally, acting in the best BiH goes further into specifics and, among
interest of children is one of the core principles other limitations related to children, establishes
of the BiH legislation. Both the rules from the the “no-broadcast” rules at around children’s
general rules and special rules apply to market- programmes – 15 minutes before, during, and
ing to children. 15 minutes after a children’s programme – for
alcoholic beverages, beer, medicines, medical
The consumer protection laws and the laws on treatments, aids, and devices, including dietary
prohibited advertising (see 1.1 Primary Laws supplements, medical institutions, means of reg-
and Regulation) in general provide that every ulating body weight, ignition devices, inflamma-
advertisement must respect principles protect- ble and other hazardous substances, religious
57 CHAMBERS.COM
messages, and games of chance. Other special also be other administrative costs connected
rules are found in other sector-specific laws and with the procedure, such as costs for publish-
regulations (please see 8.Sports Betting/Gam- ing the rules of the promotional chance-based
bling and 10.1 Regulated Products). game in a local newspaper.
Organisers must not conduct promotional

7. Sweepstakes and Other chance-based games without prior approval,
Consumer Promotions and there are no specific timescales within which
the competent authorities must give approvals; it
7.1 Sweepstakes and Contests is decided on a case-by-case basis, taking into
Sweepstakes (promotional chance-based consideration the specifics of each filing.
games) and contests are generally permissible in
the BiH, as long as the games do not qualify as a 7.2 Contests of Skill and Games of
“gambling game” or “classic games of chance” Chance
(eg, games in which the participants are specifi- Skill-based games are not specifically regu-
cally charged for entry), in which case there are lated in the BiH; therefore, whether they are
other requirements to consider in accordance distinguished from games of chance depends
with applicable laws and regulations. on several factors, such as the specifics of the
skill-based game, contractual or other relations
Registration/filing with the competent authori- between the organiser and the participants, etc.
ties is required to offer a chance-based game
and their approvals are mandatory to conduct The applicable laws and regulations do however
the game. The procedure differs depending on define games of chance as games in which the
where in the BiH the game is being organised, participant is given an opportunity to win money,
as all three entities/units in the BiH (the FBiH, the goods or services for a fee, in which the win or
RS, and the BD) have individual laws on games loss does not depend on the knowledge or skill
of chance, which cover the promotional games of the player, but on chance or some uncertain
as well. The procedures in the entities/units are event.
separate, and games (including the rules of each
individual game) need to be approved in each The question of whether a skill-based game falls
entity/unit in which they are organised. into the category of games of chance would
have to be considered on a case-by-case basis.
There are associated administrative costs: If it does, then the applicable laws on games of
chance apply and the game has to be organ-
• in the FBiH and the BD, the organiser must ised according to special rules and requirements
pay 6% of the total prize fund for charitable (please see 7.3 Registration and Approval
purposes; and Requirements); if not, it is not necessary to get
• in the RS, the organiser must pay 10% of the prior approval/register the game and, in general,
total prize fund to the competent authority. the civil codes apply.
The documentation to prove such payment has

to be delivered alongside the filing. There may
58 CHAMBERS.COM
7.3 Registration and Approval • the companies may need to have appropri-
Requirements ate share capital in order to get the approval/
Games of chance must be registered and licence for some of the games;
approved by the competent authorities (the • technical, security and other similar require-
organiser must get a licence), while registration ments may be assessed by the competent
and approval are not required for contests of skill authorities during the registration procedure;
in principle (please see 7.2 Contests of Skill and • issued bank guarantees may be one of the
Games of Chance). requirements for getting approvals/licences
for individual games of chance;
As all the three entities/units in the BiH (the FBiH, • the approval/licence may be denied if the
the RS, and the BD) have individual laws on market/particular game of chance is “over-
games of chance, and as the registration proce- crowded”;
dures in the entities/unit are separate, approval(s) • the approvals/licences are issued for a limited
need to be obtained separately in each of the time and the organisers undergo inspections
entities/units where games of chance are to be during their operations; and
offered. In the FBiH, the registration procedure is • companies can lose the approvals if they
operated by the Ministry of Finance of the FBiH; fail to comply with general requirements and
in the RS by the Ministry of Finance of the RS specific requirements for individual games of
– Special Games of Chance Department; and in chance.
the BD by the Tax Authority of the BD.
Please note that the procedures and require-
Games of chance sectors are highly regulated ments may also differ for each individual game
areas and the registration procedures (with the of chance.
above identified authorities) are slightly different
in the FBiH, the RS and the BD, and primarily 7.4 Loyalty Programmes
depend on the type of games of chance that are There are no loyalty programme-specific laws
intended to be organised. Also, the term “games and regulation, but the general rules apply –
of chance” includes a wide range of games, commercial practices, consumer rights and
such as lotteries, raffles, sports forecast, gam- advertising rules (see 1.1 Primary Laws and
bling, electronic gambling games, etc. Regulation).
Notwithstanding the above, the registration pro- General personal data protection rules are very
cedures can be summarised as follows: important when considering loyalty programmes.
The Personal Data Protection Law of the BiH,
• organisers need to be local companies (lim- and its connected by-laws, contain the key gen-
ited liability companies or joint stock compa- eral rules applicable to loyalty programmes in
nies), and the companies may be examined the BiH. The application of the law is further-
by the authorities regarding their current and more shaped by the opinions and decisions of
prior business activities, creditworthiness, tax the Data Protection Agency of the BiH, and the
and other obligations and similar; decisions of the courts of the BiH issued in the
• the approvals/licences are given for each indi- legal remedy proceedings against the agency’s
vidual game of chance; decisions. However, the opinions and decisions
59 CHAMBERS.COM
of the agency and the court should not be taken • in case of a doubt, consumer contract provi-
as definitive and final, but rather each situation sions are always applied in the consumers’
should be examined on a case-by-case basis. favour; and
• unfair contractual provisions (eg, significant
7.5 Free and Reduced-Price Offers inequality between the parties, unjustified
The BiH laws and regulations contain special expectations, breach of the principle of good
rules that apply to free or reduced-price offers. commercial practices) or provisions that may
cause damage to the consumer are null and
Firstly, the trader/seller must announce the sale void.
of the product as considered regular for the
place of sale and the product in question and Therefore, any unfair automatic renewal/continu-
there must be correlation between general sale ous offers could be null and void if against the
announcement and average sale percentage (if general contract rules above. Notwithstanding,
there are several/many products on sale). The the consumer laws also go into specifics of auto-
product must be clearly and visibly marked with matic renewals/continuous services. The Con-
the price before and after the discount. Further- sumer Protection Law of the BiH stipulates that,
more, if a short expiration date of the product is regarding standard form contracts, automatic
the cause of the discount, the expiration date renewals for a one-year period or above are
must be marked in a visible way. automatically considered as unfair contractual
provisions. The Consumer Protection Law of the
7.6 Automatic Renewal/Continuous RS also goes into specifics of automatic renew-
Service Offers als/continuous services: it is considered that a
Automatic renewal/continuous service offers are contractual provision is unfair if it establishes
regulated by: automatic extension of the contract in case the
consumer does not declare they are terminating
• the consumer protection laws - general the contract a certain period after the contract
consumer contracts and distance consumer has expired if that period is reasonably consid-
contracts (the BH and the RS); and ered as short.
• the laws on contracts and torts (the FBiH and
the RS). Aside from the consumer laws, laws on con-
tracts and torts contain general provisions that
General consumer contract rules can be sum- apply to all contracts and contractual relation-
marised as follows: ship, unless explicitly stipulated otherwise. The
general rule is that silence of the person receiv-
• the content of the contract must be made ing the offer does not mean the acceptance of
available to the consumer; the contract is that offer, unless the persons are in a permanent
not binding for the consumer if they were not business relationship considering goods from
familiar with it; the offer, which would be assessed on a case-
• consumer contract provisions must be com- by-case basis.
prehensible;
60 CHAMBERS.COM
8. Sports Betting/Gambling 9. Web 3.0
8.1 Legality & General Regulatory 9.1 Cryptocurrency and Non-fungible

Framework Tokens (NFTs)
Sports betting and other forms of gambling are Currently, there is no specific regulation govern-
generally permissible in the BiH but are highly ing the sale or advertising of cryptocurrencies
regulated. They are considered as “games of and/or NFTs.
chance” and laws on games of chance and their
connected by-laws are applicable. Please see Consequently, advertising of these products is
7.3 Registration and Approval Requirements. not prohibited and must comply with the general
The same applies to sports betting and other advertising rules and consumer protection laws
forms of gambling. (see 1.1 Primary Laws and Regulation).
8.2 Special Rules & Regulations Also, generally, there is no legislation (even out-
There are special rules that apply to the adver- side of advertising) specifically directed at cryp-
tising and marketing of sports betting and gam- tocurrencies and/or NFTs. The Central Bank of
bling, aside from the general rules that apply (see Bosnia and Herzegovina, however, issued an
1.1 Primary Laws and Regulation). opinion that cryptocurrencies should be viewed
as assets (ie, financial instrument) and not as
Generally, the special rules apply to children – money, until the BiH legislation reaches the point
persons under the age of 18 (see 6.5 Marketing of upgrading its laws and regulations specifically
to Children). Advertisements related to games for the subject matter.
of chance may not be broadcast on radio and
television shows, nor may they be published in 9.2 Metaverse
printed material and internet platforms intended Currently, there are no special laws and regu-
for children and young people. Also worth not- lations that apply to advertising within the
ing is that foreign games of chance may not be metaverse.
advertised in the BiH.
Consequently, such advertising is not prohibited
The BD has gone a step further, indicating social and must comply with the general advertising
responsibility in connection with sports betting rules and consumer protection laws (see 1.1 Pri-
and gambling advertisements. Advertisements mary Laws and Regulation).
must underline the prevention of gambling
addictions and state that gambling is not a rea- The authorities in the BiH have not yet publicly
sonable strategy to acquire financial benefits. considered any issues regarding advertising in
the metaverse.
9.3 Digital Platforms

There are no specific laws and regulations that
apply to digital advertising platform and the use
of adtech, in relation to advertising.
61 CHAMBERS.COM
For general rules applicable to digital platforms drinks. Commercial communications related to
and adtech, see 1.1 Primary Laws and Regula- alcoholic beverages must not:
tion.
• be aimed specifically at minors;
Please see 6.4 Targeted/Interest-Based Adver- • link the consumption of alcohol with improved
tising for personal data protection rules. Also, physical abilities or driving a motor vehicle;
please see 4.3 Liability for Third Party Content. • claim that alcohol has medicinal properties or
similar;
• encourage immoderate consumption of alco-
10. Product Compliance hol or present abstinence or moderation in a
negative light;
10.1 Regulated Products • put emphasis on the high alcohol content as
Besides the general rules, the BiH has particular a positive quality of alcoholic beverages; and/
regulations that apply to regulated products (see or
1.1 Primary Laws and Regulation). • create the impression that consumption of
alcohol contributes to social or sexual suc-
Food cess.
The Food Act of the BiH and its connected by-
laws, as well as the Food Act of the RS and its See also 6.5 Marketing to Children for details
connected by-laws, provide special advertising on restrictions in relation to children.
rules regarding food. In general, food advertise-
ments must not: Additionally in the food sector, there are special
advertising rules for infant formulas, food for
• mislead the consumer/customer about char- special nutritional uses, food supplements, etc.
acteristics, effects or properties;
• attribute medicinal and/or preventive proper- Tobacco
ties; Tobacco advertising (tobacco, cigarettes, and
• hint at special characteristics when in fact all similar products) is also specifically regulated
similar foods have the same or similar char- in tobacco-related laws (the FBiH, the RS and
acteristics the BD). Generally, advertising of tobacco and
related products is prohibited. Parties are pro-
These provisions also apply to advertising claims. hibited from engaging in any form of advertising,
Please note that the food sector has many by- promotion and other forms prescribed by law
laws for specific types of food that further may that can be considered providing information or
contain special advertising rules. For example, suggestions of use in favour of tobacco prod-
alcohol advertising is specifically regulated from ucts. There are several very limited and clearly
the advertising perspective, in additional to gen- defined exceptions.
eral rules and special rules for food advertising
which also apply. The by-laws relating to alcohol Cannabis
contain a set of highly complex rules that are In the BiH, cannabis is illegal and possession of
different for different types of alcohol/alcoholic even a small amount may be punished by fines,
arrest, and even imprisonment.
62 CHAMBERS.COM
Drugs, Medical Equipment, Medicines, etc Weapons, ammunitions, and similar products
Drugs and medical devices are also specifically cannot generally be advertised.
regulated in the BiH, from the advertising per-
spective. The specific rules can be summarised Regulatory authorities overseeing the banking
as follows: sector have extensive powers and can intervene
in advertising practices. The same applies to the
• advertising of medicinal products must be in insurance sector and brokerage. All of these are
accordance with the approved instructions considered on a case-by-case basis.
and summarise the main characteristics of
the medicinal product; Special advertising practices may also be found
• advertising of medical devices must be in in “regulated” professions such as attorneys-at-
accordance with the approved instructions; law (practicing lawyers) and public notaries. For
and example, public notaries may not advertise at
• it is prohibited to advertise pharmaceutical all. Attorneys-at-law, on the other hand, must
products and medical devices that are avail- be members of bar associations, which have the
able by medical prescription only. authority to self-regulate the advertising prac-
tices for their members.
See also 2.5 Human Clinical Studies related to
drugs and medical devices.
10.2 Other Products

In addition to those mentioned in 1.1 Primary
Laws and Regulation and 10.1 Regulated Prod-
ucts and other sections, there are several prod-
ucts and/or services that are subject to special
advertising rules.
63 CHAMBERS.COM
bh.legal - Law Office Mirna Milanović-Lalić advertising and marketing law. The firm’s clients
is a full-service commercial law practice with include several technology market leaders, for
market-leading expertise in advising and repre- which they provide guidance and representa-
senting both multinational and local companies tion in complex deals involving financing, priva-
in all aspects of commercial law. Lawyers are cy, and regulatory. Specifically, regarding adver-
experienced in the following practices: M&A, tising and marketing law, the firm is a member
banking and finance, projects and infrastruc- of Global Advertising Lawyers Alliance (GALA),
ture, corporate, commercial, employment, tax, through which the firm has gained significant
real estate and non-profits. The firm specialises experience and built a reputation in the subject
in intellectual property, technology, media and area.
Authors
Mirna Milanović-Lalić is Robert Vrdoljak is an attorney at
bh.legal’s founding partner, with law who has been with bh.legal
nearly 20 years of experience – Law Office Mirna Milanović-
focusing on intellectual property Lalić since 2017. He works on a
protection and enforcement in wide range of commercial
addition to general commercial issues, specialising in the
and corporate expertise. She continues to technology, media and telecom (TMT) industry
advise market leaders in both regulated and grouping. He has also been extensively
non-regulated industries. She served two involved in advertising & marketing law,
consecutive terms as board president of the primarily through the law firm’s membership to
American Chamber of Commerce in Bosnia Global Advertising Lawyers’ Alliance (GALA).
and Herzegovina.
bh.legal – Law Office Mirna

Milanović-Lalić
Gabelina 2
71000
Sarajevo
Bosnia and Herzegovina
Tel: + 387 33 558 565

Fax: + 387 33 558 566
Email: info@bh.legal
Web: www.bh.legal
64 CHAMBERS.COM
BRAZIL
Colombia
Law and Practice Ecuador
Peru Brazil
Contributed by:
Bolivia Brasilia
Luiz Werneck and Talita Sabatini Garcia Rio de Jeneiro
Inglez, Werneck, Ramos, Cury e Françolin Chile
Paraguay
São Paulo
Advogados see p.79 Argentina
Contents
65 CHAMBERS.COM
BRAZIL Law and Practice
Contributed by: Luiz Werneck and Talita Sabatini Garcia, Inglez, Werneck, Ramos, Cury e Françolin Advogados
1. Legal Framework and Ethics (CFM Resolution No 2,145/2016) and

Regulatory Bodies regulations;
• Resolution RCD No 96/08 of the National
1.1 Primary Laws and Regulation Health Surveillance Agency (ANVISA), which
The principal statutes regulating advertising in establishes guidelines for advertising, public-
Brazil are: ity, information and other practices related to
the commercial dissemination or promotion of
• the Brazilian Federal Constitution; medicines;
• the Consumer Defence Code (CDC) (Federal • Resolution RDC No 429/2020 and Normative
Law No 8,078/90); Instruction (IN) No 75/2020, which regulates
• the Statute of the Child and Adolescents the new standard on nutritional labelling of
(ECA) (Federal Law No 8,069/90); packaged foods;
• Federal Law No 14,181/21, which amends the • Federal Law No 11,265/06, which regulates
CDC and the Elderly Statute, to improve the the marketing of food for young children and
discipline of consumer credit and provide for also related childcare products;
the prevention and treatment of over-indebt- • the Ministry of Agriculture, Livestock and
edness; Supply (MAPA), which regulates specific
• Federal Law No 5,768/71 and Decree No regulatory rules for label claims; and
70,951/1972, which regulate commercial • Copyright Law No 9,610/98, which amends,
promotions and sweepstakes; updates and consolidates copyright legisla-
• Federal Law No 10,826/03 and its Decrees tion.
No 9,845/19 and No 9,847/19, which regulate
firearms; 1.2 Enforcement and Regulatory
• Federal Law No 9,294/1996, which regulates Authorities
medicine, tobacco, pesticides and alcoholic The bodies responsible for issuing advertising
beverage advertising; regulations in Brazil are CONAR and the govern-
• Federal Law No 11,265/2006 and Decree No ment itself, represented by the House of Repre-
9,579/2018, which both set forth the rules sentatives and the Senate, besides federal, state
concerning advertising for childcare products or local administrative bodies.
(ie, pacifiers and bottles);
• Federal Law No 13,874 /2019 (the “Economic CONAR is a self-regulatory agency formed by the
Freedom Act”), which reinforces the constitu- associations that represent advertisers, broad-
tional guarantees of free initiative and free- casters, advertising agencies and other sectors
dom of commercial expression, and aims to that participate in advertising. As CONAR is a
prevent the abuse of advertising restrictions self-regulatory body, it has a limited authority
in any economic sector; and must base its decisions only on its Code.
• the Brazilian Advertising Self-Regulation
Code (CBAP) of the National Advertising Self- Some administrative consumer protection agen-
Regulation Council (CONAR); cies, as well as the public prosecutor, also have
• Federal Law No 12,842/13, which provides the authority to enforce advertising rules through
for the practice of medicine, the Code of administrative or judicial procedures.
66 CHAMBERS.COM
The judiciary is the ultimate body responsible for 1.4 Self-Regulatory Authorities
enforcing advertising rules. Although the other CONAR is a self-regulatory agency created by
bodies have the authority to enforce these rules, representatives of the private sector to regulate,
the judiciary has a broader authority, and can, monitor and decide on matters related to adver-
therefore, review the other bodies’ decisions and tising.
apply penalties such as fines and injunctions.
To conduct its activities and to guide the market,
1.3 Liability for Deceptive Advertising CONAR published the Brazilian Advertising Self-
By law in Brazil, companies are responsible for Regulation Code (CBAP), which sets the rules
the actions of their owners, shareholders, direc- and principles that should guide ethical advertis-
tors, managers and agents (“representatives”). ing in Brazil.
However, in the event of an abuse of power or
misuse of purpose, the administrators them- The proceedings before CONAR may be filed
selves may also be held liable for the damages based on consumers’ complaints, on a repre-
caused by their actions or decisions. sentation brought by a competitor (the company
must be an associate member of CONAR) and
That said, with regard to liability for advertising by CONAR itself.
content, the CDC establishes that the burden
of proof regarding the veracity and correctness CONAR’s trial process is composed of three
of advertising rests with those who sponsor it. instances and its decisions are rendered in a
CONAR, on the other hand, establishes that the short period of time, usually 60 days. The first
liability for advertising rests with the advertiser, instance is responsible for receiving and judg-
the agency and the vehicle (in the final case with ing the case. The court of appeal is responsible
reservations, depending on the circumstances). for reviewing the decision of the first instance
and, if the formal requirements are met, the third
There is a current doctrine under which the and final instance is responsible for solving any
advertiser is solely liable for the damage caused conflict of understanding of the second-instance
by advertising. A second doctrine provides that judges or errors contained in the decision.
agencies and broadcasters/platforms can also
be held liable in the case of misconduct or fault. It is worth mentioning that similarly to judicial
There is also a minority viewpoint that contends procedures, CONAR may grant injunctions to
that actors/influencers should also be held suspend advertising. Notwithstanding this, they
responsible. are not commonly granted.
As a rule, the Superior Tribunal of Justice (STJ) Since CONAR is a self-regulatory body, it does
understands that the liability lies with the adver- not have the authority to impose fines or deter-
tiser; however, there are specific precedents mine the payment of any indemnifications. The
where the agency and even the broadcaster penalties available to CONAR are:
were also held liable by the STJ.
• a warning to the advertiser and its agency, or
to an influencer or celebrity who was hired for
advertising/marketing purposes;
67 CHAMBERS.COM
• a recommendation to modify or correct the erages” (16.8%) and “Drugs, Cosmetics and
advertisement; Health, other Products and Services” (16.1%).
• a recommendation to broadcasters to sus-
pend the displaying of the advertisement; CONAR also disclosed that 50.4% of the com-
and/or plaints made by consumers were due to non-
• a public notice to the broadcasters announc- compliance of the advertisements with the obli-
ing CONAR’s position regarding the non- gation of “True Presentation”, while 22.8% were
compliance with the steps and measures due to failure to comply with the obligation of
determined by it. “Advertising Identification”.
1.5 Private Right of Action for Discussions related to advertising of products

Consumers and services aimed at children and adolescents
Advertising practices can be challenged by any are frequent; recently, the Bahia State Prosecu-
consumer before the judiciary or CONAR. tor’s Office (MP-BA) initiated an inquiry into nine
companies to investigate possible illegal adver-
If the consumer is interested in repairing the tising aimed at children on YouTube. According
damage caused by the misleading or abusive to the inquiry, it was verified that these advertis-
advertising, the claim must be filed with the ers violated children’s rights and the national leg-
judiciary. In cases where the consumer only has islation, by strategically and systematically tar-
an interest in suspending the advertising (not geting marketing messages directly to children.
having damages repaired), they can file a sim-
ple complaint on the CONAR portal. If CONAR Another topic in vogue is the advertising and
believes that the claim has merit, an investiga- sponsorship of betting sites. Recently, a law
tion will be initiated to examine the irregularity was enacted authorising sport’s betting in Brazil.
of the advertising questioned by the consumer. Since such law is still pending regulation, there
is a recurring discussion about the legality of
Consumer Protection Bodies advertising promoted by the betting websites.
Besides consumers (the general public), adver-
tising can be challenged by consumer defence 1.7 COVID-19, Regulation & Enforcement
bodies (eg, the Public Attorney’s Office, PRO- CONAR has published a Technical Note in order
CON, SENACON and CONAR) on behalf of soci- to regulate advertising of products and services
ety or individual consumers. that make reference to the COVID-19 pandemic.
The Technical Note was aimed at advertising of
1.6 Regulatory and Legal Trends pharmaceutical products, food supplements
The relevant legal and regulatory trends and and cleaning products.
cases in Brazilian advertising and marketing in
the past 12 months are as set out below. Due to the uncertainties related to COVID-19,
in summary, the Technical Note recommended
According to the statistics published annually companies in the pharmaceutical and food sup-
on the CONAR website, in 2021, most of the plement segment not use claims of cure, treat-
complaints filed were related to “Alcoholic Bev- ment or prevention until scientifically validated
68 CHAMBERS.COM
procedures for such claims had been presented 2.2 Regulation of Advertising Claims
by the authorities. Not all claims are subject to regulation or
empirical evidence. As an example, the con-
For cleaning products, the Technical Note estab- cept of puffery is recognised in Brazil: proof is
lishes that all claims must have technical proof not required for claims that are unquestionably
and be aligned with the indications and warnings absurd or cannot be proved or measured.
recommended by the health authorities.
However, due to the considerable quantity of
1.8 Politics, Regulation and Enforcement laws and regulations applicable to advertising in
CONAR and the consumer protection bodies Brazil, claims must be always be analysed on a
(see 1.5 Private Right of Action) were quite dili- case-by-case basis, considering the whole con-
gent in combating abusive or misleading adver- text of the campaign in order to confirm whether
tising that exploited the COVID-19 pandemic, empirical evidence is required.
in particular advertisements that exploited the
fragility or lack of knowledge of consumers. 2.3 Substantiation of Advertising Claims
Advertising claims can be substantiated as fol-
lows:
2. Advertising Claims
• tests conducted by specialised companies
2.1 Deceptive or Misleading Claims or laboratories (ie, lab tests and consumer
Abusive and misleading advertising are regu- perception tests);
lated by the Consumer Defence Code. • performance surveys carried out by special-
ised companies (ie, sales volume, points of
Abuse advertising is that which: sale, consumer preference, delivery speed,
etc);
• has a discriminatory nature; • analyses and articles published by maga-
• incites violence, explores fear or superstition; zines, websites, newspapers or specialised
• takes advantage of a child’s lack of judgment media; and
or experience; • public information published by competitors.
• disrespects environmental values; or
• may cause the consumer to behave in a way Tests performed directly by advertisers are valid.
that will bring harm to their health or safety. However, these tests are often questioned or
disregarded by competitors and even by CON-
Misleading advertising is any information or pub- AR and judges.
lic communication that, expressly or by omis-
sion, is entirely or partially false or is in any way 2.4 Testing to Support Advertising
capable of inducing the consumer to make a Claims
mistake regarding the nature, characteristics, With rare exceptions, there is no pre-established
quality, quantity, properties, origin, price or any standard for performing tests that support
other information about the advertised products advertisements.
and/or services.
69 CHAMBERS.COM
Therefore, it is recommended that advertisers • they must correspond to actual practices

request an expert to confirm, in advance, the adopted by the advertiser;
substantiation of its claims, as measured against • the broadcast information must be true, verifi-
best market practices. able and possible to corroborate;
• the claim must be accurate and precise; and
2.5 Human Clinical Studies • the claim shall be provided with supporting
There is no specific Brazilian Law that requires data and an external source endorsement.
human clinical studies for certain types of adver-
tising. Nevertheless, considering that by law 2.8 Other Regulated Claims
every claim must be duly substantiated, in cas- The use of words such as “free” and “free trial”,
es where advertising promotes health benefits, or other expressions with the same meaning, in
the advertiser must have the necessary stud- marketing campaigns is permitted only when
ies to prove the result highlighted in its cam- there is no actual cost to the consumer concern-
paign, which may involve testing human beings, ing the promised free product or service.
depending on the case and the sector involved.
In campaigns involving the payment of expens-
2.6 Representation and Stereotypes in es to be paid by the consumer, such as postal
Advertising charges, freight, delivery charges, data con-
There are no laws or regulations that address sumption or taxes, it is necessary to specify
stereotyping in advertising or inclusion, diversity to the consumer, in a prominent way, all the
and equity more generally in Brazil. expenses involved, so that the consumer eas-
ily understands the scope and limitations of the
However, CONAR has been constantly tested in announced benefit.
disputes that question the regularity of adver-
tisements whose content promotes inclusion In addition, regarding special price or saving
and diversity. CONAR’s decisions have been to claims, it is important to highlight that it is very
support advertising that promotes inclusion and common in Brazil to sell products in instalments
diversity, as long as the advertising content is with or without interest. In these sorts of trans-
not offensive or illegal. actions, the advertiser must inform the consum-
ers of the original price, the quantity of instal-
2.7 Environmental Claims ments and the final price. If applicable, it is also
A claim related to the environment should always necessary to provide information regarding the
respect the requirements and obligations provid- interest, bank fees and expenses (total effective
ed by the law and regulations so as not to con- cost), as well as the “original” cost.
stitute a misleading or abusive advertisement.
On the other hand, according to the applicable 3. Comparative Advertising

regulation, claims regarding sustainability must
respect some specific rules, such as, among 3.1 Specific Rules or Restrictions
others: The Comparative advertising is regulated by
CONAR (Article 32 of the CBAP) and the Intel-
lectual Property Law.
70 CHAMBERS.COM
There is an important debate regarding the right Disputes before CONAR are faster; however, it is
to use a competitor’s brand or products in com- not possible to seek indemnification through its
parative publicity, both protected by the Indus- procedure. The penalties applied by CONAR are
trial Property Law. warning, modification of publicity, suspension
of publicity or the disclosure of a public notice
The Supreme Court recently issued two impor- announcing that the company does not respect
tant decisions in which the use of a competitor’s the rules of ethics in advertising.
brand and products in comparative advertising,
restricted to cases where the publicity brings A lawsuit through the courts is more time-con-
relevant information to the consumer, was consuming and more costly. However, it also allows
sidered legal. indemnification and/or recognition of the prac-
tice of unfair competition to be sought (Federal
Such precedents allow companies to compare Law No 9279/96).
their products/services with their competitors’
products/services, even identifying the competi- In both jurisdictions, it is possible to request an
tors’ brands. injunction for the immediate suspension of the
advertising in question.
3.2 Comparative Advertising Standards
Comparative advertising is accepted in Brazil
provided its main objective is the dissemination 4. Social/Digital Media
of relevant information to the consumer.
4.1 Special Rules Applicable to Social
Specific conditions must be met for advertising Media
to be ethical and regular: among other require- At the end of 2020, CONAR launched the Digital
ments, it must be objective and supported by Influencer Advertising Guidelines, which consist
technical data. Subjective or emotional data are in practical guidelines with best practices for
not valid to support comparative advertising. digital influencers on social media.
The comparison must be made between prod-
ucts that are comparable to each other, of similar The Guidelines contain instructions on how to
value and from the same period of manufacture. apply the rules of the CBAP to commercial con-
tent on social media, in particular, content gen-
Advertising must also comply with the Intellec- erated by users known as digital influencers or
tual Property Law, especially when it explores influencers or even reposts (for more information
competitors’ products and brands, and it cannot related to the Guidelines, see 5. Social Media
denigrate the competitor’s brand or image. Influencer Campaigns and Online Reviews).
3.3 Challenging Comparative Claims Also, CONAR has issued a Technical Note
Made by Competitors establishing that influencers’ advertisements
A comparative advertisement can be challenged must indicate the use of filters in images. The
through both CONAR and the courts. following disclaimer must be inserted, if this is
the case: “retouched photograph to modify the
physical appearance of a person”.
71 CHAMBERS.COM
4.2 Key Legal Challenges where all applicable disclosures must be duly
By law, the content of any advertising binds the included for the consumer’s consultation.
advertiser. Therefore, if the influencer makes an
offer with an error – for example, with a price 4.5 Requirements for Use of Social
lower than the one actually available in practice Media Platform
– the advertiser will have to comply with the offer. The use of social media must comply with the
rules and laws in force in Brazil.
In this regard, one of the biggest challenges for
advertisers is not only to instruct influencers to The main laws that have an impact on social
comply with the applicable law and CONAR’s networks are the Civil Rights Framework for
guides and regulations but also to monitor and the Internet (Federal Law No 12,965/2014), the
timely correct any misleading or abusive posts General Personal Data Protection Law or LGPD
made by contracted influencers, including those (Federal Law No 13,709/2018), the Civil Code
made spontaneously (out of scope) during the (Federal Law No 10,406/2002), the Penal Code
broadcast of the contracted campaign. (for crimes of libel, defamation and insult), and
the Intellectual Property Law (Federal Law No
4.3 Liability for Third-Party Content 9,279/96).
If an advertiser’s platform is an open channel for
dialogue with consumers, considering the con- 4.6 Special Rules for Native Advertising
stitutional right to freedom of expression, there Native advertising must comply with the CDC
are strong arguments to maintain that the adver- and CONAR’s rules. Both regulations establish
tiser is not responsible for third-party content. that “publicity must be shown in a way that the
consumer will easily and immediately identify it
However, the advertiser must monitor and as such”.
exclude any illegal content or content that may
constitute misleading or abusive information Therefore, native advertising shall have a dis-
(these limits must be established in the terms claimer or hashtag indicating that the content
and conditions of the platform). is publicity.
If an advertiser’s platform is aimed at advertising 4.7 Misinformation

its products or services, the third-party content The CDC disciplines abusive and misleading
posted there will be interpreted as advertising, advertising.
making the advertiser liable for the content.
Therefore, any advertising that promotes abu-
4.4 Disclosure Requirements sive or misleading content may be classified as
The disclosure requirements applied to advertis- illegal and trigger one of the various penalties
ing in traditional platforms also apply to all digital provided for by law, such as the imposition of
platforms. large fines.
If there are space limitations or constraints on Also, there are bills of law in progress that aim to
the platform, a shortcut must be inserted to characterise certain conduct as producing fake
direct the consumer to the advertiser’s website,
72 CHAMBERS.COM
news, imposing severe penalties on those who characteristic because of a connection or non-
commit such a practice. compensatory benefit offered by the advertiser
and/or agency, and without that advertiser’s or
agency’s editorial control. For instance, appre-
5. Social Media Influencer ciation posts, thanks for products/services
Campaigns and Online Reviews (“gifted”/”received”), trips, accommodation,
experiences or invitations.
5.1 Trends in the Use of Influencer
Campaigns In order to configure a correct and Guidelines-
Following the best practices worldwide, CON- following digital influencer advertisement, and
AR has published Digital Influencer Advertising to respect the principle of transparency, it is
Guidelines in 2020. fundamental to clarify the situation that applies
in the relevant posts. The Guidelines set forth
After the release of the new rules, there was a the expressions that are recommended (clear
significant increase in cases questioning influ- expression).
encers’ advertisements. Currently, the influencer
has assimilated the rules and the main advertis- • Influencer advertising: #advertising, #adver-
ers have adopted the necessary precautions to tisement, #sponsored, #paid content and
ensure compliance with the current rules. #paid partnership.
• Activated messages: #gifted/#received (trip/
5.2 Special Rules/Regulations on show/event), invited by (brand), thanks to
Influencer Campaigns (brand) for (product, trip, invitation), #promo-
In accordance with the Digital Influencer Adver- tion, #promo (activations upon gifts or prize).
tising Guidelines published by CONAR, there is
a difference between advertising by influencers CONAR’s guide specifies, in Portuguese, the
and activated messages. proper hashtag to be applied.
Advertising by influencer occurs when the fol- 5.3 Advertiser Liability for Influencer
lowing cumulative elements, which are neces- Content
sary to characterise an advertisement, exist: An advertiser may be held liable for the con-
tent posted by the influencer when there is a
• promotion of the product, service, cause, or relationship between the parties (influencer and
other associated sign; advertiser).
• compensation or a commercial relationship,
even if non-financial, with the advertiser and/ Regarding the duty to monitor, the advertiser
or agency; and does not have an obligation established in law
• the advertiser or agency’s interference in the or regulation. However, CONAR and consumer
content of the message (editorial control of protection bodies have demanded that adver-
the influencer’s post). tisers proactively inspect content published by
contracted influencers and in cases of activated
Activated messaging occurs when a user refers message.
to a product, service, cause, or other associated
73 CHAMBERS.COM
5.4 Misleading/Fake Reviews 6.2 Telemarketing

Freedom of communication and expression Regarding the laws and regulations applicable to
without any censorship is a constitutional right advertising, it is legal to perform telemarketing
guaranteed to all Brazilians. to promote a company’s products and services.
However, if employees or contracted third par- It should be borne in mind, however, that
ties post fake news on behalf of the company, the National Telecommunications Agency
the company may be held responsible for the (ANATEL)’s Resolution No 632/2014 (General
irregular content published. Regulation of Consumer Rights of Telecom-
munications Services) gives telephone, pay TV
In this case, if it is proven that the employee or and internet services consumers the right not to
third party exceeded their competence or acted receive advertising messages on their mobiles.
contrary to company policies, the company may
seek compensation for the damage caused. Furthermore, some Brazilian states have enact-
ed local laws whereby the consumer protection
bodies have implemented a platform to inform
6. Privacy and Advertising advertisers that a consumer has registered their
telephone number to not receive marketing calls.
6.1 Email Marketing Any call to promote a product or service to a
With regard to the laws and regulations applica- registered consumer will lead to a fine.
ble to advertising, it is legal to send marketing
emails to promote a company’s products and Advertisers must also comply with the LGPD,
services. The CDC, however, establishes general providing the proper channels and tools for the
consumer protection rules that prohibit abusive consumer to consult, change or even cancel the
marketing. use of their data for advertising purposes.
Furthermore, such activity shall comply with the Non-compliance with the applicable laws and
Self-Regulatory Code for Email Marketing Prac- regulations may lead to the application of sub-
tices (CAPEM). stantial fines or indemnifications, in addition to
the other penalties provided for in the CDC.
It is worth emphasising that the advertiser must
also comply with the LGPD, providing the proper 6.3 Text Messaging
channels and tools for the consumer to consult, Following the same line of reasoning that applies
change or even cancel the use of their personal to telemarketing (see 6.2 Telemarketing), text
data for advertising purposes. messaging for marketing purposes is legal,
but must comply with ANATEL’s Resolution No
Non-compliance with the applicable laws and 632/2014 (General Regulation of Consumer
regulations may lead to the application of sub- Rights of Telecommunications Services), which
stantial fines or indemnifications. requires the consumer’s previous consent.
The advertiser must also comply with the LGPD,

providing the proper channels and tools for the
74 CHAMBERS.COM
consumer to consult, change or even cancel the The LGPD has a specific chapter dealing with
use of their data for advertising purposes. the treatment of data of children and adoles-
cents. According to the law, data processing
Non-compliance with the applicable laws and may be carried out with the consent of a parent
regulations may lead to the application of sub- or legal guardian.
stantial fines or indemnifications, in addition to
the other penalties provided for in the CDC. Failure to comply with the laws applicable to
children’s advertising or the LGPD may lead to
6.4 Targeted/Interest-Based Advertising significant fines and compensation, in addition
As discussed throughout 6. Privacy and Adver- to the other penalties provided for in the CDC.
tising, it is legal for advertisers to send advertis-
ing material through different formats (principle
of legitimate interest). 7. Sweepstakes and Other
Consumer Promotions
However, the right to send advertising is differ-
ent from the right to process consumer data. In 7.1 Sweepstakes and Contests
order to process data for advertising, it is neces- At the end of 2018, Federal Law No 13,756/2018
sary to obtain the consumer’s express consent, was issued, granting exclusive powers to the
as a rule, through an opt-in on the advertiser’s Ministry of Finance (now known as the Ministry of
platform or by opting into the cookie policies. Economy), specifically to the Brazilian Secretary
of Economic Monitoring (SEAE, formerly known
The advertiser must provide the appropriate as SECAP) to analyse, authorise and supervise
channels and tools to consumers to consult, commercial promotions (ie, raffles or raffle-like
change or even cancel the use of their data for contests, instant win contests and contest-like
advertising purposes (LGPD requirements). games), including philanthropic sweepstakes,
which powers were previously shared with the
Failure to obtain express consent to process Brazilian Central Bank (BACEN).
the consumer data or to comply with the other
LGPD provisions may lead to substantial fines, In terms of commercial promotions, it is man-
in addition to the other penalties provided for in datory to include the following legal text in all
the CDC. broadcast and non-broadcast advertising of
such commercial promotions:
The CDC, the Child and Adolescent Statute • the term “promotional contest” with the title
(ECA) and CONAR have specific provisions for of the contest and the authorising entity (usu-
advertising products to children and adoles- ally SEAE or the Superintendence of Private
cents. Insurance);
• a certificate authorisation number; and
The ECA establishes that children are consid- • the promoter’s website address, if applicable.
ered to be persons under the age of 12, and
an adolescent is a person between 12 and 18 In addition, sweepstakes authorised by SEAE
years of age. can require or request the making of a purchase
75 CHAMBERS.COM
in order to participate, depending on the intend- Authorisation must be requested at least ten
ed mechanism. business days before the sweepstakes starts
and the supervisory fee must be collected,
7.2 Contests of Skill and Games of according to the value of the promotion prizes.
Chance
Under Federal Law No 5,768/71, Decree No After the appointed day for announcing the win-
70,951/72, the Ordinance of the Ministry of ner set forth in the sweepstakes terms and con-
Treasure No 41/2008 (which regulates the free ditions, income tax (upon the total value of the
distribution of prizes as advertising) and the Ordi- prizes at a rate of 20%) must be collected.
nance of the Ministry of Treasure No 422/2013
(which identifies which elements could qualify a Finally, the statement of account must be report-
promotion as a skill or game contest – without ed to SEAE, in accordance with the following
registration) there is a distinction between con- terms:
tests of skill and games of chance.
• delivery of prizes – 30 days after the appoint-
However, contests of skill – as well as solely cul- ed day for announcing the winner; or
tural, artistic, sporting or recreational contests – • non-delivery of prizes – 255 days after the
are an exception by law and it is not necessary appointed day for announcing the winner and,
to obtain authorisation from SEAE for them, in in such cases, it is necessary to hand over
accordance with the Ordinance of the Ministry the value of the prizes to the Federal Union.
of Treasure No 422/2013.
7.4 Loyalty Programmes
In this situation, the cultural contest must not There is no specific law nor regulation applicable
promote the sponsor’s brand, goods or services to loyalty programmes. This type of programme,
in any way, and must fulfil 12 further require- however, does not need SEAE’s authorisation.
ments set forth in applicable regulation. For this
reason, it is currently difficult to implement these 7.5 Free and Reduced-Price Offers
kinds of contests and it is extremely important to Regulation of free or reduced-price offers, such
analyse them on a case-by-case basis. as “buy one, get one free”, are set forth in the
Informative Note No 11/2018, which establishes
Finally, if a cultural contest does not meet the that prior registration with SEAE is mandatory
requirements established by law, it must be pre- when there is a free distribution of prizes with
ceded by authorisation from SEAE and be con- product’s stock limitation or a fixed amount of
verted into a sweepstake. prizes.
7.3 Registration and Approval 7.6 Automatic Renewal/Continuous

Requirements Service Offers
All sweepstakes that involve luck, raffles, instant The CDC establishes that sending or delivering
wins with limited stock, contests, or similar oper- products or providing services to consumers,
ations must be authorised in advance by SEAE without prior request, is an abusive practice
through its web portal. (Article 39, III, CDC).
76 CHAMBERS.COM
Nevertheless, as long as this situation – automat- 9. Web 3.0

ic renewal – is contractually set forth between
the parties and there is a possibility for the con- 9.1 Cryptocurrency and Non-fungible
sumer to waive this obligation, it is allowed. Tokens (NFTs)
There is no specific regulation of the advertis-
ing and marketing of cryptocurrency or NFTs in
8. Sports Betting/Gambling Brazil.
8.1 Legality & General Regulatory Advertisers must comply with general advertis-
Framework ing laws and Securities and Exchange Commis-
Gambling and betting activities are generally sion regulations, if applicable.
prohibited in Brazil, except for state-run lotter-
ies and horse races. Likewise, games of chance 9.2 Metaverse
are legally defined as a criminal offence in Brazil There is no law or regulation applied to the
(eg, roulette, jackpot and bingo). metaverse in Brazil yet.
Poker, however, is considered to be a sport, not So far, the authorities and CONAR have inter-
a game of chance, and is therefore legal. preted the metaverse as a new communication
channel, demanding that all advertisements pro-
The Federal government has enacted Decree- moted in this new environment respect the laws
Law 13,756/2018, with the objective of legalising and regulations applicable to advertising in force
sports betting. The Decree is still awaiting regu- in Brazil.
lation to establish the rights and obligations of
companies that will explore this activity. 9.3 Digital Platforms
There is not yet any applicable law to account
8.2 Special Rules & Regulations for the rise of digital advertising platforms and
There is no specific regulation of the advertising the use of adtech.
and marketing of sports betting or gambling.
Advertisers must comply with general advertis-
As mentioned in 8.1 Legality & General Regula- ing laws and Federal Law No 12,965/14, which
tory Framework, the Federal government has establishes principles, guarantees, rights and
enacted Decree-Law 13,756/2018, with the duties for the use of the internet in Brazil.
objective of legalising sports betting. The Decree
is still awaiting regulation to establish the rights
and obligations of companies that will explore 10. Product Compliance
this activity.
There are many laws applied to the advertise-
ments of regulated products. Federal Law No
9,294/96 refers to the advertising of medicine,
tobacco, therapies, pesticides and alcoholic
beverages. This law establishes how the adver-
77 CHAMBERS.COM
tising of these products should be done, includ- 10.2 Other Products

ing the use of warnings and restrictions on loca- CONAR also has special regulations for differ-
tions and events where they may be displayed, ent category of products, such as, Education,
besides establishing specific penalties. Courses, Teaching; Employment and Opportu-
nities; Real Property: Sale and Lease; Invest-
CONAR also has special regulations for regulat- ments, Loans and Securities Market; Stores
ed products, such as: alcoholic beverages; food and Sales Retail; Independent Workers; Tour-
and beverages; physicians, veterinarians, mas- ism, Trips, Tours, Hotels; Automotive Vehicles,
seuse, nurses’ activities; medicine; and others. among others.
There are also several resolutions issued by

ANVISA to regulate advertising, publicity, infor-
mation and other practices whose objective is
the commercial dissemination or promotion of
medicines; advertisements and communica-
tion related to lactose, gluten and dietary sup-
plements; and the labelling of products, among
others.
78 CHAMBERS.COM
Inglez, Werneck, Ramos, Cury e Françolin Ad- in general marketing actions (print and digital
vogados (IWRCF) is a full-service law firm with media, TV and radio); review of advertisement
the necessary resources to serve clients in com- materials, according to applicable laws and
plex projects and cases, which require profes- regulations; support in the development of loy-
sionals with business vision, broad experience alties programmes; defence of clients’ interests
and multidisciplinary expertise. At the same before the National Advertising Self-Regulation
time, the firm offers a boutique-style service in Council (CONAR) and other competent bodies;
order to guarantee personal relationships with review of aspects of comparative advertise-
clients and high-quality outcomes. IWRCF’s ments, children’s advertisements, merchandis-
Marketing and Advertising practice assists cli- ing, brand use and other forms of advertising
ents in several matters involving advertisement modalities; support in the development and car-
and marketing in Brazil, including supporting rying out of commercial campaigns and sweep-
the relationship between agencies and advertis- stakes (SEAE and SUSEP); offering training and
ers, with the drafting and negotiation of the rele- workshops for employees; and providing legal
vant contracts; advisory and preventive support opinions on legal marketing matters.
Authors
Luiz Werneck is the head of the Talita Sabatini Garcia is the
Legal Marketing & Advertising co-ordinator of the Legal
and contractual practices at Marketing & Advertising practice
Inglez, Werneck, Ramos, Cury e at Inglez, Werneck, Ramos, Cury
Françolin Advogados. He has e Françolin Advogados. She has
solid and successful experience a solid knowledge in her
of almost 20 years representing clients in practice area, especially in the regulatory
claims before the Brazilian National Advertising approval of sweepstakes, representation of
Self-Regulation Council (CONAR), acting in clients in cases before the Brazilian National
emblematic cases. Luiz is sought by clients for Advertising Self-Regulation Council (CONAR)
his valuable advice in defining marketing, and advice regarding the use of influencers in
media and propaganda strategies in various advertising. She has over ten years’ experience
segments (ie, alcoholic beverages; infant acquired during her intensive career in the
advertising; medicines; medical devices; field, including experience in legal departments
vehicles; online betting; cosmetics; video of important national and international
games), and he acts in commercial promotions companies. She is praised for uniting her
and sweepstakes. Luiz has worked as legal academic and practical skills, presenting
manager of a multinational company, been a innovative solutions to clients. Talita is currently
member of the Brazilian Association of a Councillor at the Brazilian Licensing
Advertisers, and a Councillor at CONAR. Association (ABRAL).
79 CHAMBERS.COM
Inglez, Werneck, Ramos, Cury e

Av. Eng. Luís Carlos Berrini, 105
17th floor
Berrini One Bldg
São Paulo/SP
04571-010
Brazil
Tel: +55 11 4550 5002

Web: www.iwrcf.com.br
80 CHAMBERS.COM
BRAZIL Trends and Developments
Trends and Developments

Contributed by:
Luiz Werneck and Talita Sabatini Garcia
Inglez, Werneck, Ramos, Cury e Françolin
Advogados see p.84
Children and Teenagers on Social Networks – basic conditions for their natural, balanced and
What Are the Best Practices? continuous development, in order for them to
When it comes to protecting minors, Brazil is not enjoy full conditions in adult life. According to
a lawless land. Quite the opposite. Following the Eliana Araque dos Santos (2006), this integral
most modern trends in large markets, in addition protection is not only aimed at the person, at the
to important provisions of the Federal Constitu- preservation of their dignity, but also at society
tion and the Consumer Defence Code, Brazil has and at the preservation of the quality of life.
a highly evolved self-regulatory system for regu-
lating children’s advertising, the National Council Despite all the existing protections, it is common
for Advertising Self-regulation (CONAR). knowledge that with the advent of the internet
and advancing technology, information and con-
There is also the Statute of the Child and Ado- tent started to spread with greater facility and
lescents (ECA), which very properly regulates speed. Information that used to be filtered by
the full protection of children and teenagers, borders and censorship controls imposed on
establishing the fundamental rights inherent to communication vehicles now reaches all audi-
the human person. ences simultaneously and in real time.
The ECA has as its principle the full protection or This is such a relevant concern that it has mobi-
the absolute priority of the child (person under lised 23 associations, one of which is the Bra-
the age of 12) and of the adolescent (person zilian Association of Licensing of Brands and
between 12 and 18 years of age), recognising Characters (ABRAL). From this union came
them as subjects with rights and duties. campaigns that have as their central theme the
responsible communication of products and ser-
The ECA recognises that it is the “duty of the vices aimed at children and teenagers. The focus
family, the community, the society in general, on digital content was inspired by the CBAP and
and the government to ensure, with absolute by the Advertising Guide for Digital Influencers,
priority, the enforcement of the rights to life, to recently published by CONAR.
health, to food, to education, to sports, to lei-
sure, to professionalisation, to culture, to dig- This initiative intended to promote dialogue
nity, to respect, to freedom, and to family and between various audiences, but one in particular:
community life...” (Santos, Elaine Araque dos. A the communication professional. Nowadays, the
naturalização do trabalho infantil. Revista TST, digital environment increasingly requires look-
Brasília, v. 72, n. 3, p. 105-122, set./dez. 2006). ing beyond the creation of content, demanding
its respect for healthy speech practices, ethics
The goal of this legal provision is to preserve and responsibility. For example, if an advertising
the potential of children and teenagers, offering content is being disseminated by an influencer
81 CHAMBERS.COM
in a structured way, this must be clear when it responsible for violating the ECA by publishing
is disseminated. There are some rules for this, videos with sensitive content for children and
and the material constructed by the local enti- teens (SANTIAGO, Abinoan. Pai acusa Tiktok
ties, such as ABA, ABIA and ABRAL, among oth- na Justiça por burlar o ECA; ação pode afetar
ers, highlights the main ones. outras redes. Tilt Uol).
This immense and tempting offer of content – According to news reports, the lawsuit aims to
combined with current conditions in society, increase the enforcement policy of TikTok, forc-
where parents work long hours and the streets ing it to display, in all posted content, the indica-
are no longer safe – is available to children and tive rating, as well as to require the verification of
teenagers, who used to interact with each other identity of users as a way to prohibit access to
and play games, but now spend time indoors videos without a registration and login approval,
consuming digital content on social networks, preventing inappropriate content reaching the
electronic games and the internet. child audience.
A survey from the Brazilian Internet Steering Evaluation of the documents and information
Committee points out that 93% of Brazilians posted on the TikTok platform reveals its so-
aged 9 to 17 years old are internet users, of called Community Guidelines, which contain a
which 78% accessed social networks in 2021 specific chapter addressing the safety of minors.
(an increase of 10 percentage points over 2019). According to the guidelines, users of the plat-
Among the platforms used, the proportion of form must meet minimum age requirements and
internet users in the same age group who have the platform can remove accounts of minors
a profile on Instagram increased from 45% in under the age of thirteen if and when identified.
2018 to 62% in 2021. In addition, for the first
time, the study investigated the existence of a The platform’s guidelines also provide that:
profile on TikTok and found that 58% of users in “account holders under sixteen years old can-
this age group are on the platform. not use direct messages or make lives and their
content is not eligible to be displayed in the ‘For
This new reality leads us to important reflec- You’ newsfeed (age limits may be higher in some
tions about what childhood means nowadays. regions). Account holders under eighteen years
What role does digital content play in the lives of old cannot send or receive gifts through our vir-
minors? What precautions are necessary when tual gift sending features...”.
using social networks?
According to the father’s complaint, despite
The problem of this rampant access to content is the fact that the provisions of the Community
already being challenged. It was recently report- Guidelines provide for rules and restrictions on
ed that the father of a child has filed a lawsuit content, in practice, children and teenagers have
against a social network widely used in Brazil easy access to all kinds of content on the plat-
and abroad, whose activity is to make available form, especially if we consider that it is possible
several types of content through videos created to access such content without even having an
by its users. According to the articles on the sub- account on the platform, which contradicts the
ject, the father claims that the social network is Community Guidelines themselves.
82 CHAMBERS.COM
The plaintiff granted an interview to Tilt Uol, inserting robust access control mechanisms
claiming that, as a father of two underage chil- that allow the correct targeting of content to the
dren, he has a duty to express his concern about appropriate audience.
inappropriate content, since there is no effec-
tive policy to protect children and teens. He also Despite this current moment in history, child-
raised the point that the social network does not hood is and always will be a phase in which
completely prevent the search for inappropriate human beings are still developing psychologi-
content because, although the platform prohibits cally, which is why, in line with the provisions of
the search for some terms such as “sex”, it is the Brazilian Federal Constitution (Art. 227 of the
possible to access such content when searched Brazilian Federal Constitution of 1988) and Arti-
by synonyms or in code format, such as “s3xo”. cle 6 of the ECA, members of this audience must
be regarded as vulnerable beings, regardless of
Despite the fact that the lawsuit is under secrecy, their reasoning capacity or natural evolution in
it is reported in news that the Public Prosecutor’s comparison to previous generations.
Office of São Paulo has been following the case
with great interest. This care for the minor does not require more
restrictive laws or radical changes to the laws in
It is not being questioned whether the access to force. Although the role of educating is primarily
information is important and salutary to the dem- up to the parents and, secondarily, to the state,
ocratic process of law and even to the develop- which should guarantee access to quality edu-
ment of minors. It is no wonder that freedom of cation, the simple commitment of digital content
communication and thought is one of our most providers to adopt stricter and more effective
important constitutional principles. control of access to their content, a commitment
sought by the father in the lawsuit filed against
What is proposed is a pause to reflect on the fact TikTok, would be sufficient to protect the vul-
that abuses may exist and, therefore, content nerability of the minor and ensure a richer and
providers should be more careful and responsi- healthier childhood.
ble when relating or offering content to minors,
83 CHAMBERS.COM
Inglez, Werneck, Ramos, Cury e Françolin preventive support in general marketing actions
Advogados (IWRCF) is a full-service law firm (print and digital media, TV and radio); review
with the necessary resources to serve clients of advertisement materials, according to ap-
in complex projects and cases, which require plicable laws and regulations; support in the
professionals with business vision, broad ex- development of loyalties programmes; defence
perience and multidisciplinary expertise. At of clients’ interests before the National Adver-
the same time, the firm offers a boutique-style tising Self-Regulation Council (CONAR) and
service in order to guarantee personal relation- other competent bodies; review of aspects of
ships with clients and high-quality outcomes. comparative advertisements, children’s adver-
IWRCF’s Marketing and Advertising practice tisements, merchandising, brand use and other
assists clients in several matters involving ad- forms of advertising modalities; support in the
vertisement and marketing in Brazil, including development and carrying out of commercial
supporting the relationship between agencies campaigns (SEAE and SUSEP); offering training
and advertisers, with the drafting and nego- and workshops for employees; and providing
tiation of the relevant contracts; advisory and legal opinions on legal marketing matters.
Authors
Luiz Werneck is the head of the Talita Sabatini Garcia is the
Legal Marketing & Advertising co-ordinator of the Legal
and contractual practices at Marketing & Advertising practice
Inglez, Werneck, Ramos, Cury e at Inglez, Werneck, Ramos, Cury
Françolin Advogados. He has e Françolin Advogados. She has
solid and successful experience a solid knowledge in her
of almost 20 years representing clients in practice area, especially in the regulatory
claims before the Brazilian National Advertising approval of sweepstakes, representation of
Self-Regulation Council (CONAR), acting in clients in cases before the Brazilian Advertising
emblematic cases. Luiz is sought by clients for Self-Regulation Council (CONAR) and advice
his valuable advice in defining marketing, regarding the use of influencers in advertising.
media and propaganda strategies, strategies in She has over ten years’ experience acquired
various segments (ie, alcoholic beverages; during her intensive career in the field,
infant advertising; medicines; medical devices; including experience in legal departments of
vehicles; online betting; cosmetics; video important national and international
games), and he acts in commercial promotions companies. She is praised for uniting her
and sweepstakes. Luiz has worked as legal academic and practical skills, presenting
manager of a multinational company, been a innovative solutions to clients. Talita is currently
member of the Brazilian Association of a Councillor at the Brazilian Licensing
Advertisers (ABA), and a Councillor at CONAR. Association (ABRAL).
84 CHAMBERS.COM
Inglez, Werneck, Ramos, Cury e

Av. Eng. Luís Carlos Berrini, 105
17th floor
Berrini One Bldg
São Paulo/SP
04571-010
Brazil
Tel: +55 11 4550 5002

Email: legalmkt@iwrcf.com.br
Web: www.iwrcf.com.br
85 CHAMBERS.COM
CANADA
Law and Practice
Greenland
Contributed by:
Arlan Gates, Sarah Mavula and Jacqueline Rotondi Canada
Ottawa
USA
Contents
7.6 Automatic Renewal/Continuous Service
Offers p.105
3.2 Comparative Advertising Standards p.96
3.3 Challenging Comparative Claims Made by 8. Sports Betting/Gambling p.105
Competitors p.96 8.1 Legality & General Regulatory Framework p.105
8.2 Special Rules & Regulations p.106
4. Social/Digital Media p.96
4.1 Special Rules Applicable to Social Media p.96 9. Web 3.0 p.106
4.2 Key Legal Challenges p.96 9.1 Cryptocurrency and Non-fungible Tokens
4.3 Liability for Third-Party Content p.97 (NFTs) p.106
4.4 Disclosure Requirements p.97 9.2 Metaverse p.107
4.5 Requirements for Use of Social Media Platform p.97 9.3 Digital Platforms p.107
4.6 Special Rules for Native Advertising p.97 10. Product Compliance p.107
4.7 Misinformation p.97 10.1 Regulated Products p.107
86 CHAMBERS.COM
CANADA Law and Practice
Contributed by: Arlan Gates, Sarah Mavula and Jacqueline Rotondi, Baker McKenzie
1. Legal Framework and sumer protection legislation differs in a number

Regulatory Bodies of areas, including:
1.1 Primary Laws and Regulation • advertising to children;

Advertising in Canada is regulated both federally • promotional contests;
and provincially/territorially. • credit advertising;
• advertising of premiums; and
Federal Regulation • French language requirements for advertising
The primary source of regulation is the federal materials.
Competition Act, which contains criminal and
civil prohibitions on materially false or misleading 1.2 Enforcement and Regulatory
advertising in any medium. Criminal prosecution Authorities
is reserved for the most egregious offences (eg, Federal Regulatory Authorities
fraud-like conduct or deliberate breaches), with The Deceptive Marketing Practices Directorate
the civil regime used to deal with all other con- within the Competition Bureau is charged with
duct. enforcing the false or misleading advertising pro-
visions of the Competition Act. The Competition
In addition to the general prohibitions against Bureau has broad investigative and enforcement
materially false or misleading representations, powers, including the ability to commence for-
the civil provisions contain specific prohibitions mal inquiries, seek document production, issue
relating to: subpoenas and search warrants, and order wire-
taps.
• unsubstantiated performance claims;
• misleading warranties and guarantees; The Competition Act imposes significant penal-
• bait-and-switch selling; ties for false or misleading advertising. Criminal
• false or misleading price claims; violations may involve a prison term for individu-
• testimonials; and als for up to 14 years and an unlimited fine. Civil
• promotional contests. sanctions may include the following.
The criminal and civil provisions are mutually • A prohibition order lasting up to ten years (the
exclusive – once criminal charges have been laid violation of which is a criminal offence).
or a civil application has been filed, the regulator • A requirement to publish a corrective notice.
cannot switch tracks. • An administrative monetary penalty that, as
of June 2022, now comprises a maximum
Provincial and Territorial Regulation amount equal to whichever of the following is
Provincial and territorial consumer protection higher:
statutes set out prohibitions against deceptive (a) CAD10 million (CAD15 million for each
marketing practices, similar to those under the subsequent violation); or
Competition Act. With the exception of Que- (b) three times the value of the benefit
bec, Canada’s only civil law jurisdiction, these derived from the deceptive conduct (or
prohibitions are relatively similar. Quebec’s con- if that amount cannot be reasonably de-
termined, 3% of the corporation’s annual
87 CHAMBERS.COM
worldwide gross revenues). imprisonment of up to three years for individu-

• Restitution to consumers. als, and other remedies (eg, prohibition orders,
retractions and corrective notices).
Several other federal regulatory authorities
are responsible for product or service-specific 1.3 Liability for Deceptive Advertising
advertising laws, including: Corporations and individuals alike may be held
liable for violating federal and provincial adver-
• Health Canada, which enforces advertising tising and marketing laws.
rules for food, drugs, natural health products,
tobacco, cannabis, vaping products and cer- Generally, both civil and criminal liability for
tain pre-packaged consumer products; misleading misrepresentations attaches to the
• the Canadian Food Inspection Agency, which, person who had control or decision-making
along with Health Canada, enforces advertis- authority over the content of the representa-
ing, packaging and labelling requirements for tion. Although individual owners, shareholders
food; and third parties – such as advertising and tele-
• the Financial Consumer Agency of Canada, marketing agencies – can technically be liable
which oversees the advertising of financial for misleading advertising, in practice, this is
products and services; and unlikely, as they are not likely to be found to have
• the Canadian Transportation Agency, which decision-making authority over the content of
enforces advertising restrictions related to representations.
certain air, marine and land-based transporta-
tion. Director and Officer Liability
Although director and officer liability is explicitly
Violation of product or service-specific adver- codified in only some provisions of the Competi-
tising laws may attract civil or criminal penal- tion Act dealing with misleading representations,
ties similar to those under the Competition Act. in principle, directors and officers may be liable
Breaches of product-specific laws may also under both the criminal and the civil prohibitions.
result in product recalls and the seizure or deten- As part of a settlement with the Competition
tion of goods. Bureau reached in 2021 by an online flight-book-
ing platform in connection with allegedly mis-
Provincial and Territorial Regulatory leading representations about prices and ser-
Authorities vices, charging of hidden fees and posting false
Consumer protection authorities are responsible online reviews in violation of the civil misleading
for enforcing the advertising and marketing pro- advertising provisions, two company directors
visions of the applicable statutes (eg, in Ontario, agreed to penalties of CAD400,000 each.
the Director under the Consumer Protection Act
and the Ministry of Government and Consumer The Publisher’s Defence
Services). While available penalties vary by juris- The civil misleading advertising provisions of
diction, they typically can include fines ranging the Competition Act provide for a so-called
from CAD1,000 to CAD300,000 (or three times “publisher’s defence”, which generally allows
the amount obtained by the violator as a result persons who merely print or publish, or other-
of the offence, whichever is greater), terms of wise disseminate, a representation on behalf of
88 CHAMBERS.COM
another person in the ordinary course of their • unacceptable advertising to children and
business to avoid liability, assuming certain con- minors; and
ditions are met. • unacceptable portrayals and depictions (eg,
discriminatory, indecent or otherwise objec-
Product-Specific Advertising Requirements tionable content).
While the specific circumstances giving rise to
liability vary by statute, generally, as with the Although adherence to the Code is technically
Competition Act, individuals will not be liable for voluntary, in practice, those found to be in vio-
misleading advertising unless they have some lation can be asked to amend or withdraw their
degree of control or decision-making authority advertising and may be publicly identified in a
over a misleading advertisement. It should also complaints report, and newspapers, broadcast-
be noted that the “publisher’s defence” may not ers or digital properties that are members of Ad
be available under certain product-specific leg- Standards will not carry an advertisement found
islation (eg, the Cannabis Act prohibits a person to be in contravention of the Code.
from publishing, broadcasting or otherwise dis-
seminating, on behalf of another person, prohib- Pre-clearance Services
ited promotions, including misleading advertise- Ad Standards also provides pre-clearance ser-
ments). While not yet interpreted by the courts, vices to advertisers with respect to alcoholic and
this broad provision implies that third parties non-alcoholic beverages, cosmetics, children’s
such as internet platforms and marketing agen- advertising, health products and food products.
cies could potentially be liable for non-compliant Pre-clearance assesses compliance with rele-
cannabis advertising. vant Canadian Radio-television and Telecommu-
nications Commission (CRTC) codes and certain
1.4 Self-Regulatory Authorities product-specific requirements (eg, under the
The most significant self-regulatory organisation Alcohol and Gaming Commission of Ontario’s
in the advertising/marketing space in Canada is Liquor Advertising Guidelines, the CRTC Code
Ad Standards, the advertising industry’s self- for Broadcast Advertising of Alcoholic Beverag-
regulatory body. Ad Standards administers the es, the Broadcast Code for Advertising to Chil-
Canadian Code of Advertising Standards (Code), dren and the Guidelines for the Nonprescription
which contains 14 clauses and six interpretation and Cosmetic Industry Regarding Non-thera-
guidelines setting out a number of basic princi- peutic Advertising and Labelling Claims).
ples of acceptable advertising including prohibi-
tions against: Most Canadian broadcasters require an Ad
Standards (or equivalent) approval number
• misleading advertising; before airing broadcast advertisements, and
• deceptive price claims; pre-clearance is common or required in certain
• disguised advertising; other circumstances.
• false testimonials;
• deceptive comparative advertising; Other Self-Regulating Bodies
• unsubstantiated claims; There are a number of other industry associa-
• depictions of unsafe behaviours; tions and self-regulatory bodies. Some regulate
marketers generally (eg, the Canadian Marketing
89 CHAMBERS.COM
Association and the Digital Advertising Alliance on 7 April 2022 and other measures, came into
of Canada) and others (eg, the Canadian Bever- force. It introduced sweeping amendments to
age Association, which publishes the Code for the Competition Act and implemented the most
the Responsible Advertising of Food and Bever- significant changes since the Act’s last major
age Products to Children, and the Pharmaceuti- amendments in 2009, including a new drip pric-
cal Advertising Advisory Board, a pre-clearance ing prohibition.
agency for drug products) are industry specific.
Drip pricing refers to the practice of displaying
1.5 Private Right of Action for one price to consumers but ultimately charging
Consumers a higher price through the incorporation of addi-
A private right of action (including through class tional fees (other than government sales taxes)
actions) is available for consumers who have added incrementally during the purchase pro-
suffered loss or damage as a result of a breach cess.
of the criminal misleading advertising provisions
of the Competition Act (or a prohibition order Although the Competition Bureau has routinely
under the civil provisions). Although this right enforced against drip pricing conduct as a form
of action is available irrespective of whether of misleading advertising in the past (targeting
there has been a conviction for the underlying furniture retailers, concert ticket retailers, airlines
conduct, in practice, private actions are mostly and others that have charged hidden fees), drip
brought following a conviction or a guilty plea. pricing will now become an expressly prohibited
Consumers may recover damages equal to the practice under both the criminal and civil mis-
actual loss suffered, plus investigation and pro- leading advertising provisions of the Act, lower-
ceeding costs. ing the evidentiary burden on the Bureau.
Individual or class actions may similarly be Increased Penalties for Deceptive Marketing
brought under most provincial or territorial con- Amendments to the Competition Act have also
sumer protection statutes. introduced significantly increased civil adminis-
trative monetary penalties for deceptive market-
1.6 Regulatory and Legal Trends ing practices (which the Competition Bureau had
Recent Trends suggested were no longer a sufficient deterrent).
Digital advertising and particularly influencer Previously, penalties were capped at CAD10 mil-
marketing and the collection of consumer data lion for a corporation’s first violation and CAD15
in exchange for “free” online products and ser- million for subsequent violations. Maximum
vices continue to be key areas of concern for the penalties will now be increased to either CAD10
Competition Bureau. These areas have recently million (CAD15 million for each subsequent vio-
been reinforced by the introduction of an express lation) or three times the value of the benefit
prohibition against drip pricing and significantly obtained from the deceptive conduct (or if that
increased civil penalties for deceptive marketing. amount cannot be reasonably determined, 3%
of the corporation’s annual worldwide gross rev-
Drip Pricing Prohibition enues), whichever is greater.
In June 2022, Bill C-19, an act to implement cer-
tain provisions of the budget tabled in parliament
90 CHAMBERS.COM
Notable Recent Actions 1.7 COVID-19, Regulation & Enforcement

Notable Competition Bureau enforcement While protecting consumers has always been
actions over the past 12 months include the fol- a key priority of the Competition Bureau, this
lowing. focus intensified in the first few months of the
pandemic, when it prioritised enforcement of
• An investigation into a subscription trap deceptive claims related to various COVID-19
scam led to a company pleading guilty to “cures”, and other novel claims arising from the
operating a deceptive free trial offer scheme pandemic and government-related relief initia-
for health and dietary supplements, which tives. For example, the Competition Bureau is
was found to have trapped consumers into currently investigating an accounting company
monthly subscriptions. The penalties include for false or misleading representations made
a CAD15 million fine and a ten-year court when promoting its services to persons applying
order prohibiting the company from any direct for government benefit programs implemented
or indirect involvement in promoting decep- in response to the COVID-19 pandemic.
tive trial offers. The Bureau concluded that
the company left the false impression on its Various public health laws put in place to com-
websites that consumers were ordering free bat the pandemic have prompted an increase in
trials without further obligations, using claims consumer advertising complaints, in particular
such as “risk-free trial”, and failing to disclose with respect to advertisements designed to play
the real cost and nature of the offers, includ- upon consumers’ fears, such as those related
ing the obligation to pay significant ongoing to health, the environment, personal finances
subscription fees. and consumer product availability. In addition to
• A Canadian company that markets and sells enforcement actions, this has led to guidance
natural health products entered into a con- from various regulatory and self-regulatory bod-
sent agreement with the Competition Bureau, ies, including Ad Standards, which issued guid-
upon a finding by the Bureau that the com- ance encouraging advertisers to consider their
pany’s marketing claims gave a false and messaging in light of the current public health
misleading impression of proven ability to crisis.
cause weight loss, an impression that was not
supported by adequate and proper testing. 1.8 Politics, Regulation and Enforcement
While the company’s products were licensed Although the current Liberal government
by Health Canada to make certain claims, secured a victory in the last federal election in
they were not authorised to make weight loss 2021, its minority win resulted in the incumbent
claims. As part of the consent agreement government entering into a coalition with the
reached, the company and its founder agreed New Democratic Party, strengthening its ability
to pay a penalty of CAD100,000, are required to pass legislation, but also bringing change in
to remove or change all weight loss claims the political agenda.
made about their products, and must estab-
lish a corporate compliance programme to Following the coalition, the Liberal government
prevent future deceptive marketing violations. has proceeded to re-introduce various bills, such
as Bill C-11, a bill to regulate online broadcast-
ers, as well hastily introducing and passing Bill
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C-19, the 2022 budget bill, which included sig- • a representation was made in a place to
nificant amendments to the Competition Act which the public had access.
without public consultation. Amendments to
the Competition Act were a response to a man- Materiality
date letter from the Prime Minister instructing Materiality depends on both the literal meaning
the Minister of Innovation, Science and Industry and the general impression of the representa-
of Canada to review and modernise the Com- tion in question. Generally, the test is whether
petition Act, particularly to adapt to the growing a representation influenced a person to make
digital economy. a purchase. However, when advertising is dis-
seminated through certain electronic means
In 2021, the Liberal government also announced (eg, email or SMS text message), there is no
that it had taken steps to increase the Com- materiality requirement for representations con-
petition Bureau’s budget by more than a third tained in the sender information, subject matter
(CAD96 million over five years and thereafter information or locator information (eg, URL and
CAD27.5 million annually), which the Compe- metadata) of the electronic message.
tition Bureau intends to use to strengthen its
enforcement team and investigations, particu- Similar materiality standards apply under pro-
larly in digital markets. Overall, the increased vincial and territorial consumer protection leg-
budget and amendments to the Act seem likely islation and the Canadian Code of Advertising
to foreshadow more regular and active enforce- Standards.
ment by the Bureau.
All advertising claims, whether express or
2. Advertising Claims implied, are regulated and all provable advertis-
ing claims that may reasonably be taken as true
2.1 Deceptive or Misleading Claims by consumers must be substantiated.
To be actionable, an advertising claim must be
made to the “public” and must be false or mis- Claim Substantiation
leading in a “material” respect. The elements of Any type of performance claim, whether express
the offence are substantially similar under both or implied, must be supported by an “adequate
the civil and criminal provisions of the Compe- and proper test”, as discussed in 2.3 Substan-
tition Act, with the latter further requiring that tiation of Advertising Claims. The substantiation
a deceptive representation have been made required for other types of claims will depend on
“knowingly or recklessly”. the circumstances, including the type of claim
and the audience for which it is intended.
Representations to the Public
While only representations directed to the public Hyperbole
are actionable, it is not necessary to show that: If a claim is so clearly an exaggeration that a con-
sumer would not reasonably believe it to be true
• any person was actually deceived or misled; or if a claim is clearly the opinion of the adver-
• a member of the public to whom a represen- tiser, generally no substantiation is required. Ad
tation was made was within Canada; or Standards has published guidance on the appli-
92 CHAMBERS.COM
cation of the elements of humour and fantasy in • the test is reflective of the risk the product is
assessing the general impression conveyed by designed to prevent;
an advertisement. • the test is carried out under controlled cir-
cumstances;
2.3 Substantiation of Advertising Claims • the test is conducted on more than one inde-
There are no statutory criteria for what consti- pendent sample wherever possible;
tutes an adequate and proper test of a perfor- • test results are reasonable, given the nature
mance claim, and the adequacy of any given of the harm at issue and demonstrate that
test largely depends on the circumstances, the product causes the desired effect and the
such as the nature of the claim, the product effect is material; and
itself or the availability of any standard testing • subjectivity in the test is eliminated as much
procedures. While an adequate and proper test as possible.
does not need to be the best available test or
meet the standard typically required for studies Standardised industry testing will generally be
published in peer-reviewed journals, it must be considered a reasonable benchmark for ade-
appropriate for the product, its material features quate and proper testing. Research and/or con-
and performance, and the claim being tested, sumer survey data will generally be necessary to
as well as being valid in the market where the support any comparative claim.
claim is made. Canadian courts have generally
interpreted the term “proper” to mean suitable, In a recent enforcement action against a hockey
fit or as required by the circumstances. equipment manufacturer claiming the use of its
helmet reduced the risk of concussion, the Com-
Any testing done to substantiate a performance petition Bureau concluded that despite testing
claim must be done before the claim is made. It having been conducted prior to making the
is not permissible to wait until the claim is chal- claim, it was not adequate and proper as the
lenged to test it. Even if testing later proves the manufacturer relied on injury studies focused on
claim to be true, the claim would not have met sports with significantly different injury patterns
the substantiation requirements. to those suffered while playing ice hockey.
2.4 Testing to Support Advertising 2.5 Human Clinical Studies

Claims Therapeutic claims – ie, claims regarding a prod-
Standards largely depend on the circumstances, uct’s safety, effectiveness and/or use – are sub-
such as the nature of the claim, the product itself ject to a high degree of scrutiny. Manufacturers
or the availability of any standard testing proce- of health products must ensure they have robust
dures. While there are generally no requirements clinical evidence to substantiate any therapeu-
prescribing how testing must be conducted or tic claim. Typically, evidence comes in the form
minimum sample sizes, when assessing whether of clinical studies that often result in published,
a test is adequate and proper, courts will gener- peer-reviewed, controlled and double-blind
ally consider, among other things, the following human studies with demonstrated clinical and
factors: statistical significance. In some circumstances,
unpublished data may be sufficient, if indepen-
dently reviewed. Importantly, the studies should
93 CHAMBERS.COM
directly test and support the approved indica- to marketing and advertising laws of general
tions of the advertised product in the intended application. While these claims were historically
population, as specifically authorised by Health subject to detailed and extensive regulatory
Canada; this is especially true for drug products. guidance jointly prepared by the Competition
Therapeutic claims related to food products Bureau and the Canadian Standards Associa-
must also be substantiated by human clinical tion, this guidance was recently archived by the
studies and certain food-related therapeutic Bureau on the basis that it no longer reflects
claims must be pre-approved by Health Cana- the Bureau’s current policies or practices or the
da and the Canadian Food Inspection Agency, relevant standards and evolving environmental
depending on the health condition addressed in concerns. Although the guidance is therefore no
the claim. longer recognised and has not been replaced
by new guidance, environmental claims remain
2.6 Representation and Stereotypes in among the Competition Bureau’s main priorities.
Advertising
Although there are no laws specifically address- A Recent Case on Environmental Claims
ing inclusion, diversity, representation and stere- Last year, the Competition Bureau investigated
otyping in advertising, such issues are generally a manufacturer well known for its hot bever-
addressed through Ad Standards’ self-regu- age brewing system and accompanying coffee
latory framework and the interpretation of the pods, as a result of certain recyclability claims
Canadian Code of Advertising Standards. For and related instructions associated with its sin-
example, Clause 14 of the Code (as discussed gle-use coffee pods. These claims were found
in 1.4 Self-Regulatory Authorities) prohibits to be false or misleading in certain municipali-
advertising material that condones any form of ties and provinces where the coffee pods were
personal discrimination, including discrimination not accepted for recycling by municipal recy-
based upon race, national or ethnic origin, reli- cling programmes without further pre-recycling
gion, gender identity, sex or sexual orientation, processing steps which were not disclosed to
age, or disability. consumers. The manufacturer entered into a
consent agreement, and agreed to:
Most recently, the government of Canada has
also proposed amendments to the Broadcasting • pay a CAD3 million penalty;
Act which, among other things, would update • donate CAD800,000 to a Canadian charita-
federal broadcasting policy to be more inclusive ble organisation focused on environmental
of all Canadians from various racialised commu- causes;
nities and diverse ethno-cultural backgrounds, • pay an additional CAD85,000 to cover the
sexual orientations and gender identities, includ- Competition Bureau’s investigation costs;
ing providing opportunities and support for • change its recycling claims and coffee pod
indigenous programming. artwork;
• publish corrective notices; and
2.7 Environmental Claims • enhance its corporate compliance pro-
Environmental claims, such as those related to gramme.
sustainability, recycling, safety or environmental
impact (including “free of” claims), are subject
94 CHAMBERS.COM
2.8 Other Regulated Claims (ie, where the ingredient is obtained from a natu-
Many types of claims are subject to specific reg- ral source material, is in a form found in nature
ulatory guidelines and requirements, including and has undergone only minimal processing –
“free”, “natural”, “Made in Canada”, “Product of eg, drying, grinding, powdering, chopping or
Canada”, and therapeutic claims. encapsulating).
“Free” Claims Therapeutic and Health Claims

To advertise a product as “free” of charge, there Therapeutic and health claims are regulated
should not be any required or implied cost to by Health Canada and must be substantiated
obtain it, whether the product is provided on its with human clinical evidence, as discussed in
own or as part of a bundle where the consumer 2.5 Human Clinical Studies. Any product that
is required to pay for the other bundled item (in claims to have a medical effect or purpose brings
the latter case, there should be no cost recovery the associated product within Health Canada’s
to offset the cost of the “free” product). jurisdiction and must be specifically approved
for that claim.
Canadian Origin Claims
“Product of Canada” and “Made in Canada”
claims are subject to detailed regulatory guide- 3. Comparative Advertising
lines for both food and non-food products. These
guidelines outline conditions that must be satis- 3.1 Specific Rules or Restrictions
fied to allow the claims, including factors such There are no statutory rules or restrictions spe-
as the percentage of the product’s total direct cifically applicable to comparative advertising
costs that must have been incurred in Canada. claims. Such claims are, however, subject to
As the “general impression” test used to assess specific provisions under the Canadian Code
all advertising claims is similarly applicable to of Advertising Standards and related guidelines
origin claims, it might be possible for an origin that require that a comparison must not, among
claim to be conveyed through a combination other things, unfairly disparage or discredit a
or words and visual elements even where the competitor or its products or exaggerate the
specific words “Product of Canada” or “Made nature or importance of differences. While adver-
in Canada” are not displayed. tisers are permitted to mention a competitor by
name, they may only do so in compliance with
“Natural” Claims intellectual property laws and must not infringe
Whether a “natural” claim may be used depends third-party intellectual property rights (see 3.3
on the product. “Natural” claims related to food Challenging Comparative Claims Made by
are permitted only where food has not been Competitors).
processed in such a way that would alter its
chemical, physical or biological state. Although There are additional, stricter guidelines for com-
a health product’s therapeutic action can never parative advertising in the healthcare/pharma-
be advertised as “natural”, given that health ceutical context (eg, comparative claims in drug
products alter the body’s physiological func- advertising should be supported by direct head-
tion, individual ingredients may be described as to-head human clinical studies - see 2.5 Human
“natural” only where they meet specific criteria Clinical Studies).
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3.2 Comparative Advertising Standards • passes off the advertiser’s goods or services,
Like non-comparative advertising claims, com- or otherwise causes confusion as to the
parative advertising must not be materially false source of the goods or services being adver-
or misleading, based on both the literal mean- tised.
ing and the general impression created by the
comparative claim. Determining whether comparative claims war-
rant challenge on intellectual property grounds
3.3 Challenging Comparative Claims requires a case-by-case analysis. Recent case
Made by Competitors law has held that mere overstatements are not
Challenge through Ad Standards always considered false or misleading, and
An advertiser can challenge a comparative claim using competitor marks for the purposes of dis-
under the Canadian Code of Advertising Stand- tinguishing goods/services may be acceptable,
ards through Ad Standards’ Advertising Dispute if supported by evidence. If a challenge is suc-
Procedure. The procedure is confidential and cessful, remedies may include injunctions, dam-
subject to a partially refundable filing fee. If a ages and the removal of infringing advertising
challenge is successful, the advertiser will be material.
asked to withdraw or amend the advertisement
and failure to do so may result in Ad Standards
publishing its decision and in appropriate cases 4. Social/Digital Media
notifying the Competition Bureau, which can
take further enforcement action. 4.1 Special Rules Applicable to Social
Media
Challenges under the Copyright Act and Advertising on social media is subject to the
Trademarks Act same requirements as advertising claims gen-
Comparative advertising referring to a competi- erally: it must be true and not materially false
tor’s name, logo, label or pictures may attract or misleading, based on both the literal mean-
liability under federal intellectual property laws. ing and the general impression created by the
Specifically, advertisers may challenge a com- advertisement. If social media advertising is con-
petitor’s advertisements under the federal Cop- ducted through testimonials or influencer mar-
yright Act where an advertisement reproduces keting, additional requirements apply, including
a work or any part without the consent of the a requirement to disclose any material connec-
copyright owner. An advertiser may also have a tion with a business, product or service in each
cause of action under the Trademarks Act if its social media post.
competitor:
4.2 Key Legal Challenges
• reproduces a trade mark (registered or unreg- The Competition Bureau takes the position that
istered) in a manner that is considered likely both influencers and brands are responsible for
to depreciate the goodwill attached to the ensuring proper disclosures of sponsored posts
mark; and compliance with the Competition Act and
• makes false or misleading statements dis- regulatory guidance requirements. Brands must
crediting an advertiser’s business, goods or be vigilant in monitoring social media advertising,
services; or as they may be held accountable for representa-
96 CHAMBERS.COM
tions made by consumers or other individuals and guidance issued by Ad Standards address-
about their products. However, in the circum- es medium-specific disclosure, including disclo-
stances where individuals with whom brands sure on video-based platforms.
have no contractual relationship make mislead-
ing representations in social media, brands may 4.6 Special Rules for Native Advertising
have no (or limited) ability to control the content “Native advertising” is subject to the same gen-
of the representations, which may present com- eral rules as other advertising, including the
pliance challenges. requirement to disclose a material connection
with the advertiser in cases where an advertis-
4.3 Liability for Third-Party Content er influences editorial content by, for example,
In principle, an advertiser may be held liable for offering free products or services for reviews.
content posted on its website or social media
channels if individuals posting the content fail 4.7 Misinformation
to disclose a material connection with the adver- Presently, there are no Canadian laws or industry
tiser. guidance that regulate or prohibit misinformation
on topics of public importance. Previously, how-
4.4 Disclosure Requirements ever, the Canada Elections Act prohibited the
In addition to being subject to the same dis- making or publishing of false statements about
closure requirements applicable to traditional a political figure’s citizenship, place of birth, edu-
media, social media advertising is subject to cation, membership in a group, legal offences
additional disclosure requirements set out in or professional qualifications, if made with the
regulatory guidance. Among other things, social intention of affecting results of an election. This
media disclosure must be inseparable from the provision, however, was found to be unconstitu-
posted content, able to travel with the message tional in 2021 and is no longer in force.
when shared and independent of any particular
social media platform (ie, not reliant on platform- Despite this, the increasing ubiquity of social
specific built-in disclosure mechanisms that are media platforms as a source of information,
not part of the post (eg, a “paid partnership” together with the COVID-19 pandemic, has
header)). fuelled an increase in misinformation on topics
of public importance, ranging from politics to
Similarly, regulatory guidance provides exam- false narratives about COVID-19 and vaccination
ples of acceptable hashtags that are commonly campaigns. The issue is of growing relevance
used as a way of ensuring disclosure due to to advertising and marketing campaigns that
word count limitations (and timing requirements involve current affairs, and those that engage
for videos) that exist under most social media third party influencers or invite consumer/user-
platform rules. generated materials.
4.5 Requirements for Use of Social

Media Platform
While no special rules exist under general adver-
tising and marketing laws, special considera-
tions do apply under privacy and anti-spam laws
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5. Social Media Influencer product. Regulatory guidance sets out the fol-
Campaigns and Online Reviews lowing obligations for influencers when posting
reviews and opinions:
5.1 Trends in the Use of Influencer
Campaigns • disclosing all material connections (ie, any
Although influencer marketing has been stead- relationship or arrangement that would cause
ily growing over the past decade, in recent consumers to re-evaluate their opinion about
years, advertisers have increasingly favoured the truthfulness of the advertising) regardless
influencers with smaller profiles – but a large, of perceived magnitude;
engaged following – over mega celebrities. Not • using clear and contextually appropriate
only are these influencers more active on tradi- words and images;
tional social media channels such as Instagram • using unambiguous references and abbrevia-
or Facebook, but a growing number are using tions to communicate an influencer relation-
streaming services and video-based platforms, ship;
which are particularly popular among the young- • ensuring that disclosures are inseparable
er demographic, for whom they have become a from the specific content that it pertains to
key source of information when making product (ie, a blanket disclosure would not be accept-
choices. able);
• basing reviews and opinions on actual experi-
Canadian regulators have taken note and have ence; and
increased enforcement in this area, publicly • making disclosure visible and accessible.
announcing the regulation of influencer mar-
keting as one of the key ongoing priorities, 5.3 Advertiser Liability for Influencer
with influencer marketing being a key focus of Content
the Competition Bureau’s enforcement efforts. Advertisers may in principle be held liable for
Increased enforcement of influencer marketing content posted by influencers if an influencer
is expected to continue. makes a false or misleading claim or fails to dis-
close a material connection with the advertiser.
5.2 Special Rules/Regulations on
Influencer Campaigns Regulatory guidance encourages advertisers to
In addition to the general requirements appli- ensure all influencer contracts contain “compli-
cable to all marketing campaigns, influencer ance with laws” clauses and impose obligations
marketing campaigns may be subject to the on influencers to disclose any material connec-
provisions of the Competition Act applicable to tion with the brand, and to actively monitor their
testimonials. The Competition Bureau has also influencers’ activities to ensure statements influ-
issued guidance pertaining to testimonials and encers make about their products and/or servic-
influencer marketing. es are not false or misleading and that material
connections are properly disclosed.
Testimonials
Testimonials must reflect the true opinion of the 5.4 Misleading/Fake Reviews
person giving them, and must be based on the Astroturfing, the practice of creating commer-
person’s actual experience with the advertised cial representations that masquerade as the
98 CHAMBERS.COM
authentic experiences and opinions of impartial firmed prior to the sending of a CEM; an email
consumers, such as fake reviews, remains high requesting consent is itself considered a CEM.
on the Competition Bureau’s list of priorities. In
its first enforcement action against astroturf- Identification Requirements
ing in 2015, the Competition Bureau imposed a A CEM must identify the sender and anyone on
CAD1.25 million penalty on a telecommunication whose behalf it is sent. This includes their identi-
company that encouraged its employees to post ties, contact information, and mailing addresses.
positive reviews and ratings on the company’s If sent on behalf of multiple persons, all parties
apps. The company’s employees failed to dis- must be identified in the CEM. In general, how-
close their relationship to the company, which ever, only persons who play a material role in
the Competition Bureau found to constitute false the content of the CEM and/or the choice of the
and misleading advertising, as they created a recipients must be identified. If it is not practi-
general impression that the reviews were made cal to include this information in the CEM itself,
by independent and impartial consumers. While a hyperlink to a webpage with the information
reviews by employees of a company (or employ- is acceptable, provided it is accessible without
ees of a firm hired by a company) are permitted, additional cost and the link is clearly and promi-
any such reviews must be accompanied by a nently set out in the CEM.
disclosure of the material connection between
the company and the employees in order not Unsubscribe Mechanism Requirement
to contravene the general deceptive marketing A CEM must provide an unsubscribe mechanism
laws under the Competition Act. which must be readily accessible, easy to use
and remain active for 60 days after a CEM is
sent. Unsubscribe requests must be given effect
6. Privacy and Advertising within ten business days.
6.1 Email Marketing Exemptions

Any form of electronic marketing (eg, through CASL contains two broad categories of exemp-
email, text messaging/SMS, instant messaging tions: one that exempts certain electronic mes-
or messaging over social media) is generally sub- sages from the statute’s application entirely and
ject to Canada’s Anti-Spam Legislation (CASL), the other that exempts certain messages from
which applies to any “commercial electronic the consent requirements, while still applying the
message” (CEM) and prescribes specific con- form requirements.
sent and form requirements. A CEM is defined
very broadly to include any electronic message Misleading Representations
that encourages participation in a commercial CASL also introduced amendments to the Com-
activity. petition Act that establish specific prohibitions
for misleading representations in individual ele-
Consent Requirement ments of electronic messages, including the
A CEM cannot be sent without the recipient’s sender information, subject line, and locator
express opt-in consent, unless the sender can information such as URLs or metadata.
rely on an exemption or is able to establish a val-
id basis to imply consent. Consent must be con-
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Enforcement ated with the client’s subscription have been

Corporations found in violation of the CASL may paid.
be subject to an administrative monetary penalty
of up to CAD10 million. Individual directors and Telemarketers must also maintain their own
officers may also face individual liability of up to internal do not call lists and update them when
CAD1 million if they had a significant role in the consumers ask not to be contacted.
violation.
The DNCL rules do not apply to exempt tele-
6.2 Telemarketing marketers, including registered charities raising
Inbound and outbound telemarketing are sub- funds, newspapers, political parties and their
ject to the Unsolicited Telecommunications candidates, and business-to-businesses mar-
Rules (UTRs) of the Canadian Radio-television keters. Companies that make telemarketing calls
and Telecommunications Commission (CRTC). to consumers with whom they have an existing
business relationship are also exempt from the
Telemarketing Rules application of the DNCL rules, provided they
Telemarketers are prohibited from initiating unso- meet the prescribed requirements.
licited telemarketing calls on their own behalf
(or on behalf of a client) to consumers unless Being an exempt telemarketer does not elimi-
the telemarketer (if initiating telemarketing calls nate the telemarketer’s responsibility to maintain
on their own behalf) or their clients (if initiating its own internal do not call list.
telemarketing calls on their client’s behalf) have
registered with and provided information to the ADAD Rules
National Do Not Call List (DNCL) operator and Automatic dialling-announcing devices (ADAD)
paid all applicable fees. The UTRs also impose are subject to additional rules under the UTRs,
certain obligations and restrictions on telemar- including requiring that each call begins with a
keters and their clients, including record keeping clear message identifying the person or group on
requirements. whose behalf the call is being made; describing
the purposes of the call; limiting the days and
National DNCL time period when calls can be made; and ensur-
Telemarketers are prohibited from initiating tele- ing that appropriate caller ID is established.
marketing calls:
Enforcement
• to consumers whose telephone numbers are Violations of the UTRs can result in administra-
on the DNCL, unless a consumer has pro- tive monetary penalties of up to CAD15,000 for
vided express consent to be contacted; corporations, subject to a due diligence defence.
• on their own behalf unless they are registered
subscribers of the DNCL and have paid all 6.3 Text Messaging
applicable fees to the DNCL operator; or Text messaging is subject to CASL. See 6.1
• on behalf of a client unless the client is a Email Marketing for further details.
registered subscriber of the DNCL and the
applicable fees to the DNCL operator associ-
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6.4 Targeted/Interest-Based Advertising ry programme for interest-based advertising. To

Regulation under PIPEDA encourage increased notice, transparency, and
Data collected for interest-based advertising is accountability from the advertising sector online
generally considered personal information and to consumers, AdChoices has issued a number
requires consent under Canada’s Personal Infor- of recommendations, for example, advising that
mational Protection and Electronic Documents advertisers provide consumers with an ability
Act (PIPEDA), and substantially similar provincial to choose whether data is collected and used,
legislation in certain provinces. Personal infor- and that they do not collect personal information
mation may generally be collected for interest- from children under the age of 13 or sensitive
based advertising on the basis of implied con- information from anyone without consent.
sent, provided:
• consumers are made aware of the purpose of There are no federal statutes of general appli-
the practice and are provided with informa- cation that specifically regulate advertising to
tion about the parties involved before the time children.
of collection;
• consumers can easily opt out, with the opt- The federal Cannabis Act and the Tobacco and
out being immediate and persistent; Vaping Products Act (TVPA) prohibit advertising
• collected information is not sensitive; and to children under the age of 18 (some provinces
• collected information is destroyed as soon as have increased this age restriction to 19 or 21)
possible or de-identified. or advertising to adults in any form where there
is a risk it may be accessed by children. The
The Office of the Privacy Commissioner of Can- TVPA further prohibits the use of certain forms of
ada (OPC) has actively encouraged advertisers advertising, such as lifestyle advertising, spon-
to avoid knowingly targeting children for interest- sorship promotion, testimonials and endorse-
based advertising. ments, or promotions that would be appealing
to youth or feature any prohibited ingredients or
Enforcement flavours. The TVPA’s Vaping Products Promotion
Enforcement under PIPEDA is carried out by the Regulations also prohibit advertising and point
OPC, either on its own initiative or on behalf of of sale promotion of vaping products or a vaping
an individual complainant. While the OPC does product-related brand element to persons under
not have the independent power to issue binding the age of 18.
compliance orders or administrative monetary
penalties, other than in limited circumstances, it Violations may be subject to:
may bring an action in Federal Court, which has
the power to award sanctions against the organi- • a maximum fine of CAD1 million or imprison-
sation or award damages to complainants. ment for a term of up to two years, or both,
for a manufacturer; and
Self-regulation • a maximum fine of CAD500,000 for all per-
The Digital Advertising Alliance of Canada sons other than a manufacturer.
(DAAC), a non-profit consortium of trade asso-
ciations, administers AdChoices, a self-regulato-
101 CHAMBERS.COM
The CRTC Code for broadcast advertising of • prohibitions on pressuring a child to buy or
alcoholic beverages (the Broadcast Code), use a product;
administered by the CRTC, contains several • exaggerated demonstrations;
provisions restricting alcohol marketing to chil- • endorsements by cartoon or fantasy char-
dren or those under the legal drinking age. While acters (unless specifically created for the
the Broadcast Code in principle applies only to product); and
television and radio broadcasts, many provinces • excessive repetition (for example, a child-
have incorporated the Broadcast Code by ref- directed commercial can only be broadcast
erence into their alcohol regulations and apply once each 30-minute time slot).
them to advertising in any medium. Under the
Broadcast Code, advertisers cannot: Restrictions on Advertising to Children under
the Canadian Code of Advertising Standards
• direct advertisements to anyone under the The Canadian Code of Advertising Standards
legal drinking age; prohibits advertising directed at children from:
• associate their product with youth or youth
symbols; • exploiting their credulity, lack of experience or
• portray persons under the legal drinking age their sense of loyalty; and
or persons who could reasonably be mistaken • presenting information or illustrations that
for such persons in a context where any such might result in their physical, emotional or
product is being shown or promoted; moral harm.
• portray the product relating to an activity that
is primarily attractive to people under the The Children’s Advertising Initiative
legal drinking age; or Ad Standards also administers the Children’s
• use an endorsement by a person, character Advertising Initiative, developed by the food
or group who is likely to be a role model for and beverage industry and designed to address
minors. childhood obesity. The Children’s Advertising
Initiative requires participating companies to,
Child-directed broadcast advertising is also reg- among other things, promote healthy dietary
ulated through the Broadcast Code for Advertis- choices in children’s advertising and not to
ing to Children (the Children’s Broadcast Code), advertise food or beverage products in ele-
which defines a child as anyone under the age mentary schools. Advertisers will be expected
of 12. As a practical matter, all child-directed to comply with the guidelines by mid-2023.
advertising must comply with the Children’s While participation is currently voluntary, Health
Broadcast Code before it airs. Canada has announced its intention to amend
federal food advertising laws to restrict com-
The Children’s Broadcast Code deems any mercial marketing of food/beverages to chil-
advertising during children’s programming, as dren, particularly food products that contribute
well as any child-directed advertising during to excess consumption of sodium, sugars and
other programming, to be children’s advertising, saturated fat.
and sets out strict criteria for acceptable forms
of child advertising, including:
102 CHAMBERS.COM
Advertising to Children in Quebec is, any general information other than contact
Advertising to children under the age of 13 is information (ie, name, address, email address,
expressly prohibited in Quebec pursuant to and home and mobile telephone numbers). The
the Quebec Consumer Protection Act, subject CMA enforces the CMA Code through inter-
to limited exceptions where strict conditions nal or external mediation or through a hearing
have been met. Violations are subject to fines of before an independent panel, which results in a
CAD2,000–100,000 for a corporation. resolution and/or corrective action being recom-
mended.
Collection of Personal Information from
Children
The OPC has taken the position that, under 7. Sweepstakes and Other
PIPEDA, the consent of a parent or guardian is Consumer Promotions
required for the collection and use of personal
information for children under the age of 13. 7.1 Sweepstakes and Contests
However, certain provinces, including British The Criminal Code
Columbia, Alberta, and Quebec, have not set Canada’s Criminal Code prohibits the conduct of
a specific age threshold, but instead consider contests where winners are determined solely by
whether the individual understands the nature chance. To avoid this, contests other than those
and consequences of the exercise of the right of skill (see 7.2 Contests of Skill and Games of
or power in question. Where a child/minor is Chance) typically include a mathematical skill-
unable to do so, parental or guardian consent testing question.
is required.
Contests based on skill alone or mixed chance
However, Quebec’s newly amended private and skill are allowed provided they comply with
sector privacy legislation provides that parental certain requirements, including that participants
consent will become mandatory for the collec- are not required to pay money or give other valu-
tion, use and disclosure of personal information able consideration to participate in a contest of
concerning a minor under 14 years of age, as of mixed chance and skill. As a result, Canadian
21 September 2023. contest rules typically provide for an alternative
and equally acceptable means of entry that does
The Canadian Marketing Association’s Code of not require a “purchase” or any other type of
Ethics and Standards of Practice (CMA Code) consideration.
also addresses the collection and use of the
data of children and teenagers. Like the OPC’s The Competition Act
position under PIPEDA, the CMA Code stipu- The Competition Act contains specific provisions
lates that the collection of data from children applicable to contests, including adequate and
under the age of 13 requires parent or guardian fair disclosure of, among other things, the num-
consent. For teenagers, defined as individuals ber, regional allocation and approximate retail
between the ages of 13 and the age of major- value of prizes, as well as any fact that materially
ity, parental consent is only necessary where the affects the chances of winning. The Competition
teenager is younger than 16 and the informa- Act also requires that the ultimate distribution of
tion being collected is personal information, that prizes not be unduly delayed.
103 CHAMBERS.COM
Provincial Requirements sage of time alone. Additional key requirements

The province of Quebec imposes extensive in Quebec include:
requirements for contests open to Quebec
residents (see 7.3 Registration and Approval • merchant disclosure obligations prior to
Requirements). entering into a loyalty programme agreement;
• notice obligations where a loyalty programme
7.2 Contests of Skill and Games of agreement will be unilaterally amended; and
Chance • restrictions on increasing the number of
While contests in which winners are determined points to obtain a good or service.
solely by chance are prohibited under the Crimi-
nal Code, those based solely on skill are gener- 7.5 Free and Reduced-Price Offers
ally permitted, although what constitutes pure The Competition Act prohibits advertisers from
skill or mixed skill and chance has been subject misleading the public about the prices at which
to some debate. Although Canadian courts have products are ordinarily sold and requires any
held that an element of chance in a game does reduced-price offer to meet one of the tests set
not necessarily make it a game of mixed chance out below.
and skill, to be considered a game of pure skill
participants must be able to exercise sufficient Volume Test
skill to compensate for any element of chance. A substantial volume of sales must occur at or
above the reference price within a reasonable
7.3 Registration and Approval period of time before or after making the repre-
Requirements sentation. The “substantial volume” requirement
With the exception of Quebec, Canada does is met if more than 50% of sales are at or above
not have any contest registration or approval the reference price. The “reasonable period
requirements. Quebec’s Act respecting lotter- of time” is the 12 months immediately before
ies, publicity contests and amusement machines or after the representation, although it may be
and the Rules respecting Publicity Contests shorter depending on the nature of the product.
impose an advance registration requirement
and additionally require the inclusion of certain Time Test
statutory language in contest rules, payment of The product must be offered for sale in good
prize duties and a security bond in certain cases, faith at or above the reference price for a sub-
reporting and record-keeping. stantial period of time before or after making the
representation. The “substantial period of time”
7.4 Loyalty Programmes is six months immediately before or after the
There are no federal laws that apply directly to making of the representation, although it may be
loyalty programmes. To date, Ontario and Que- shorter depending on the nature of the product.
bec are the only Canadian provinces that spe-
cifically address loyalty programmes as part of Clearance Sales
consumer protection legislation. Clearance sales are not subject to either the vol-
ume or time test. However, a supplier promoting
In both provinces, legislation generally prohibits a clearance sale is subject to specific require-
the expiry of loyalty points based on the pas- ments, including demonstrating that:
104 CHAMBERS.COM
• the sale was clearly marked as a clearance Continuing Service Offers

sale; British Columbia’s Consumer Protection Act
• markdowns are permanent and inventory is specifically limits the duration of continuing ser-
not replenished; vices contracts and gives consumers the right to
• the price representations refer to the original cancel the contract either ten days after receiv-
price and any subsequent interim prices; and ing a copy of the contract or at any time due to a
• the original price was offered in good faith. material change, and it imposes requirements on
the supplier once a contract has been cancelled.
Free and Bonus Claims These requirements include refunding the cus-
Free or bonus offers cannot include any attempt tomer within 15 days and returning all negotiable
to recover the cost of the free item. In a recent instruments executed by the consumer within
settlement with a social media platform, the 30 days.
Competition Bureau signalled its position that
the prohibition in the Competition Act against Other provinces provide rules for the renewal of
making false or misleading claims about a prod- consumer service contracts, but do not specifi-
uct or service to promote a business interest cally address continuous contracts. These typi-
applies to “free” digital products the same way cally require that the supplier provide the cus-
it applies to regular products or services pur- tomer with a notice of renewal within a certain
chased by consumers. This is a growing area period of time prior to the expiry of the exist-
of enforcement. For further information, see 1.6 ing contract. Customers and suppliers have the
Regulatory and Legal Trends. option of refusing the renewal by providing notice
to the other party. In certain provinces, these
7.6 Automatic Renewal/Continuous rules only apply to particular contracts, such as
Service Offers personal development or travel club contracts,
Automatic Renewal and often exclude indeterminate contracts.
Provincial and territorial consumer protection
statutes generally allow automatic renewal of Unsolicited Goods or Services
consumer contracts, provided prescribed con- Several provinces specifically regulate unso-
ditions are met. A number of provinces, how- licited goods and services by allowing recipi-
ever, are considering changes to their regulatory ents to refuse them and prohibiting suppliers
regimes to address automatic renewals. Pro- from demanding payment. Where the suppliers
posed amendments to the Ontario Consumer receive payment for unsolicited goods or servic-
Protection Act, if enacted, will only permit auto- es, consumers are typically permitted to demand
matic agreement renewals if: a refund within a stipulated time period.
• the consumer is able to cancel at no addi-

tional cost; and 8. Sports Betting/Gambling
• the renewal is made with express consent or
by a renewal process that provides advance 8.1 Legality & General Regulatory
notice and renews the agreement for an Framework
indefinite term. Subject to limited exceptions, the federal Crimi-
nal Code prohibits all types of gambling and
105 CHAMBERS.COM
betting. Prohibited activities include provision marketing of gambling does not target under-
of in-person or online casinos, bingo, ticket lot- age or self-excluded individuals and that it is not
teries, betting, poker and other card games, and misleading as to the gambling services offered.
electronic games. Other provinces, such as British Columbia,
require that operators provide the factual odds
The main exception to this prohibition applies to of winning in a clearly stated and accessible way.
provincial and territorial governments, which are
permitted to supply gambling facilities or servic-
es and regulate any legal gambling activities tak- 9. Web 3.0
ing place within the province. Other exceptions
may apply in limited circumstances to charita- 9.1 Cryptocurrency and Non-fungible
ble and religious organisations, boards of fairs Tokens (NFTs)
or exhibitions and their concession operators, Although there are no rules or regulations direct-
and public places of amusement. ly applicable to the advertising and marketing
of cryptocurrency and/or NFTs, provincial secu-
Sports Betting rities regulators have indicated an intention to
Although certain forms of sports betting, such regulate in this space. The Ontario Securities
as parlay betting, have historically been legal in Commission, for example, has brought a num-
Canada, until recently, betting on the outcome ber of proceedings requiring crypto-asset trad-
of a single sporting event was prohibited by the ing platforms to comply with provincial securities
Criminal Code. The Safe and Regulated Sports laws and the regulatory framework proposed by
Betting Act, which decriminalises single-event the Canadian Securities Administrators (CSA).
sports betting and allows provincial governments
to regulate single-event sports betting within a Recently, the CSA and the Investment Indus-
province, came into effect in August 2021. try Regulatory Organization of Canada (IIROC)
published guidance on the application of secu-
Since then, nine of the ten Canadian provinces rities legislation and IIROC rules to the adver-
have made single-event sports betting avail- tising, marketing and social media activities of
able through online platforms and land-based crypto trading platforms (CTPs). The guidance
facilities (retail) while all three territories have highlights prohibitions on false or misleading
limited single-event sports betting to retail plat- statements in advertising materials, which for
forms. The final province, Saskatchewan, has registered or prospective CTPs may apply to
announced plans to launch an online platform the following.
for sports betting in November 2022.
• False suggestions that a CTP is registered
8.2 Special Rules & Regulations under securities legislation.
Legal gambling operations (ie, those that are • Suggestions that a securities regulatory
authorised by a provincial government), includ- authority or regulator has approved:
ing licensed lotteries, can be advertised so long (a) the CTP;
as they comply with provincial requirements and (b) products offered on the CTP; or
promote responsible gambling. For example, the (c) any disclosures made by the CTP.
Ontario standards require that advertising and
106 CHAMBERS.COM
• Statements that are untrue about a matter 9.3 Digital Platforms

that a reasonable investor would consider The Competition Bureau has expressly highlight-
relevant or important in deciding whether to ed its intention to strengthen its enforcement
enter into a trading or advising relationship activities in today’s increasingly digital economy,
with the CTP. including issuing guidance and enforcement pri-
orities against specific digital advertising prac-
The guidance also sets out obligations that reg- tices such as astroturfing (see 5.4 Misleading/
istered CTPs have to their clients, including: Fake Reviews), influencer marketing (see 5.2
Special Rules/Regulations on Influencer Cam-
• treating clients fairly, honestly and in good paigns), free digital products, drip pricing (see
faith, particularly with respect to advertising 1.6 Regulatory and Legal Trends), and targeted
or marketing strategies that may encourage advertising (see 6.4 Targeted/Interest-Based
excessively risky trading; Advertising).
• knowing the client, product, and suitability
assessments; and
• identifying and responding to any conflicts of 10. Product Compliance
interest.
The CSA and IIROC have also warned CTPs Canada has a number of federal and provincial/
that using social media to promote their prod- territorial laws, regulations and guidelines that
ucts does not absolve them of certain applicable apply to the advertising of specific categories of
requirements and provided guidance on policies products including food, drugs, medical devices,
and procedures that CTPs must adopt for the alcohol, cannabis and tobacco/vaping products.
governance of social media marketing, including:
Food Products
• reviewing, supervising, retaining and retriev- The marketing and advertising of food products
ing all advertising and marketing materials on is, for the most part, federally governed, pursu-
social media sites; ant to the Food and Drugs Act (FDA) and the Safe
• designating a responsible individual for the Food for Canadians Act (SFCA), and enforced by
supervision or approval of marketing commu- the Canadian Food Inspection Agency. Under
nications; and the FDA and SFCA, all information provided
• implementing a system to monitor compli- in food advertising and labelling must not be
ance with such policies and procedures. false, misleading or likely to create an errone-
ous impression regarding the food product’s
9.2 Metaverse character, value, quantity, composition, merit or
To date, there are no laws or regulations that safety (as well as its origin, method of manufac-
specifically address advertising in the metaverse ture, or preparation). Any food product that is not
given its nascent nature. However, marketing and labelled or advertised as required by applicable
advertising laws of general application apply to food laws is deemed to be false, misleading or
advertising within the metaverse, including the likely to create an erroneous impression.
overarching prohibition against false and mis-
leading advertising under the Competition Act.
107 CHAMBERS.COM
Generally, mandatory information or claims that applicable regulations, where a standard has
are permitted on food packaging may also be been prescribed for a drug or medical device, it
used when advertising that food product, and is prohibited to label or advertise a product that is
information and/or claims that are prohibited on likely to be mistaken for a particular drug or medi-
product packaging are also generally prohibited cal device unless the product complies with the
in advertising of the food product. standard in question. As with food products, the
FDA prohibits advertising that is false, misleading,
Further, voluntary claims (or representations deceptive or likely to create an erroneous impres-
including any text, descriptions or visual repre- sion about the character, value, quantity, compo-
sentation or combination thereof) made about sition, merit or safety of a drug or medical device.
various aspects or characteristics of a food must
be truthful and accurate. Certain claims, includ- Health Canada also distinguishes advertising
ing those relating to nutrient content, organic requirements and restrictions based on the tar-
ingredients, being “free from” a substance get audience. Consumer-directed advertising
(negative claims), or health benefits are subject of any prescription drugs that make claims to
to specific regulatory requirements. Claims of treat, prevent or cure certain serious diseases,
treating, preventing or mitigating certain serious or of narcotic and controlled drugs are generally
diseases, disorders or abnormal physical states prohibited, subject to limited exemptions. For
are generally prohibited. example, consumer-directed advertising of pre-
scription drugs may be permitted where only the
Although the rules for marketing and advertising name, price and quantity of the prescription drug
of food are primarily contained in federal laws, are indicated in an advertisement with no refer-
there are additional provincial laws that govern ence to its therapeutic use and/or benefits. Con-
advertising and labelling requirements for specif- versely, advertising of prescription drugs directed
ic food products such as dairy, livestock, meat, to healthcare professionals is not subject to such
oil products and agricultural products, as well a restriction. However, the FDA prohibits manu-
as, in certain cases, advertising and disclosure facturers from advertising a drug to healthcare
requirements for menu items in restaurants and professionals for a use other than the indications
food service establishments. approved by Health Canada (ie, off-label use).
The Pharmaceutical Advertising Advisory Board’s
Drugs and Medical Devices Code of Advertising Acceptance also provides
In Canada, the advertising of prescription and guidance on acceptable advertising to health-
non-prescription drugs (including natural health care professionals. Additionally, each province
products), cosmetics and medical devices is may also impose its own additional restrictions
regulated under the FDA, with Health Canada on healthcare provider advertising.
having jurisdiction over administration and
enforcement. The Guideline for Consumer Advertising of Health
Products by Ad Standards also applies to the
Distinct from cosmetics (see 10.2 Other Prod- advertising of non-prescription (over-the-counter)
ucts), drugs and medical devices may only be drugs, natural products, and medical devices
advertised in Canada if they are authorised for directed to the general public. Pre-clearance of
sale by Health Canada. Pursuant to the FDA and advertising material for drugs (except for opioids)
108 CHAMBERS.COM
and medical devices directed to consumers is Tobacco and Vaping Products

voluntary and can be obtained from pre-clear- The marketing and advertising of tobacco and
ances agencies or Ad Standards. For opioids, vaping products is regulated by the Tobacco
pre-clearance is mandatory. The Pharmaceutical and Vaping Products Act, and is generally pro-
Advertising Advisory Board pre-clears advertis- hibited subject to limited exemptions. Notably,
ing material directed to healthcare professionals. the following advertising activities are generally
permitted:
Alcohol
Alcohol promotion is highly regulated under pro- • brand preference advertising (ie, advertise-
vincial/territorial liquor licensing control acts, ment of a specific tobacco or vaping brand)
regulations and guidelines, as well as under that is mailed directly to a specifically named
advertising industry self-regulation. adult; and
• advertising signs in locations where young
The CRTC Code For Broadcast Advertising of persons are not permitted by law (ie, adult-
Alcoholic Beverages contains several restric- only venues). However, further limitations
tions, which are also reflected in provincial and exist under these exemptions. For example,
territorial regulations and/or related guidelines the use of terms such as “light” or “mild” are
in a number of Canadian provinces and terri- prohibited and the advertisement of sponsor-
tories. Notable prohibited advertising elements ships by tobacco companies is prohibited.
and themes include: See also 6.5 Marketing to Children regard-
ing prohibition against advertising of tobacco
• advertising that appeals to persons under products to minors.
the legal drinking age (see 6.5 Marketing to
Children); Cannabis and Cannabis Accessories
• depictions of alcohol with any activity that The Cannabis Act regulates the advertising or
requires a significant degree of skill, care or promotion of cannabis and cannabis accesso-
mental alertness, or involving an obvious ele- ries. It prohibits marketing of cannabis that is
ment of danger; false, misleading, deceptive or likely to create
• condoning of irresponsible or excessive con- an erroneous impression about its character-
sumption; istics, value, quantity, composition, strength,
• any suggestions that alcohol is essential for concentration, potency, purity, quality, merit,
enjoyment of a situation or takes precedence safety, health effects or health risks (or design,
over other activities; and construction, performance, intended use, char-
• any suggestions that imply (directly or indi- acteristics, value, composition, merit, safety,
rectly) that social acceptance, social status, health effects or health risks for cannabis acces-
achievement or personal success would be sories). Additionally, the Act generally prohibits
enhanced through consumption of alcohol. the promotion of cannabis and cannabis acces-
sories, subject to limited exemptions. The vari-
Currently, Quebec also mandates pre-clearance ous advertising prohibitions include:
from the province’s liquor and gaming authority
for all advertising materials relating to alcoholic • communicating information about price or
beverages. distribution;
109 CHAMBERS.COM
• appealing to young persons (see also 6.5 Textiles

Marketing to Children); Federally, the Textile Labelling Act (TLA), which
• displaying or communicating a testimonial or is administered and enforced by the Competition
endorsement; Bureau, regulates the advertising and market-
• using real or fictional depictions of a person, ing of textile articles. False or misleading rep-
character or animal; resentations related to textile fibre products are
• presenting cannabis products or any brand prohibited under the TLA. While fibre content
elements in a manner that evokes a positive declaration is mandatory for textile labelling pur-
or negative emotion or image of a way of life, poses, it is not required for advertising purposes.
such as glamour, recreation, excitement, vital- However, any representation as to the fibre con-
ity, risk or daring (ie, lifestyle advertising); tent of a textile in an advertisement, if included,
• sponsorship promotion; must be made in accordance with requirements
• using celebrity-affiliated advertisements; and under the TLA. Additionally, textile products
• providing or offering inducements that may advertised in Canada are also subject to health
encourage non-users or users to either begin and safety requirements under the Canada Con-
using cannabis or engage in heavy consump- sumer Product Safety Act (CCPSA) as only those
tion. articles that are compliant with the CCPSA are
permitted to be advertised and sold in Canada.
10.2 Other Products
There are several other categories of products Financial Products
that are specifically regulated by different federal While specific rules and standards vary depend-
and/or provincial and territorial laws, regulations ing on the applicable federal and/or provincial/
and guidance, including cosmetics, textiles, and territorial laws, the supplying entity and the type
financial products. of financial product in question, most provinces
and territories require the advertising of financial
Cosmetics products:
While the marketing and advertising of cosmet-
ics are generally federally regulated under the • to be clear and easy for consumers to under-
FDA and the Cosmetic Regulations, cosmetics stand;
are also subject to additional advertising rules • to be truthful;
under Ad Standards’ Guidelines for the Nonpre- • to include applicable disclosures of fees and
scription and Cosmetic Industry Regarding Non- interest charged or cost of credit; and
therapeutic Advertising and Labelling Claims. In • to include key terms and conditions, and the
brief, cosmetic products are generally restricted associated risks of obtaining the financial
from making claims indicating or implying thera- product in question.
peutic or physiological effect (eg, in most cases,
by using words such as “restores”, “repairs”, Provincial consumer protection laws of gener-
“stimulates”, “heals”, etc). Further, cosmetic al application are also an important source of
advertisements intended for television or radio advertising rules relating to financial products.
broadcast must be pre-cleared by Ad Standards.
110 CHAMBERS.COM
Baker McKenzie provides, through its Canadian er/trade complaints; interface and advocacy
advertising and marketing practice, full-service with advertising regulators; and marketing-
Canadian advertising and marketing support related commercial agreements. The practice
to leading domestic and international compa- has a long record of success in serving leading
nies, focused on food, cosmetic, drug, device clients in the Canadian market, including high-
and consumer product safety, packaging and profile domestic and international companies
labelling compliance; misleading advertising in sectors including food and beverage, fash-
and deceptive marketing practices compliance; ion and luxury, cosmetics and personal care,
marketing-related privacy, anti-spam and direct pharmaceutical and health products, consumer
marketing regulation; consumer protection, e- electronics and retail.
commerce and online sales regulation; complex The authors thank Baker McKenzie articling
contests, sweepstakes and promotions; social student Milinda Yimesghen for input in the 2022
media and digital marketing risk management; update of the Canada Guide and associate
advertising clearance, standards and consum- Daniel Gao for input in prior updates.
Authors
projects.
111 CHAMBERS.COM
Jacqueline Rotondi is an
associate in Baker McKenzie’s
International Commercial
practice group and a member of
the Advertising & Marketing and
Antitrust & Competition
practices in Toronto. Jacqueline regularly
advises on advertising, marketing and
consumer product regulatory law, including
deceptive marketing, contests and promotions,
consumer protection, communications
regulation, and product regulatory compliance,
including product environmental regulation,
recycling/stewardship and life cycle issues.
Baker McKenzie
181 Bay Street
Suite 2100
Toronto
ON M5J 2T3
Canada
Tel: +1 416 863 1221

Fax: +1 416 863 6275
112 CHAMBERS.COM
CANADA Trends and Developments

Contributed by:
Arlan Gates and Sarah Mavula
Developments in Canadian Advertising and and social interaction, is now perceived as the
Marketing Law least trusted mode of advertising in Canada.
The Competition Bureau (the Bureau), the inde-
pendent law enforcement agency that adminis- Key challenges in the digital economy on which
ters the federal Competition Act (the Act) – which the Bureau has been focused include:
is Canada’s principal consumer protection stat-
ute – together with Ad Standards, the Canadian • influencer marketing;
advertising industry’s self-regulatory body, are • false online consumer reviews (astroturfing);
Canada’s primary barometers of regulatory pri- • misleading ordinary selling prices and “fake
orities in marketing and advertising. Together, discounts”; and
they set the tone for trends and developments • drip pricing.
in this area, supplemented by initiatives by other
federal and provincial authorities with responsi- Influencer marketing
bility for consumer protection, privacy and prod- Influencer marketing remains a top enforcement
uct compliance. priority, with the Bureau continuing to send let-
ters to marketing agencies and brands in sectors
Over the past year, as Canadian consumers and identified as having been impacted by decep-
advertisers have emerged from the pandemic tive influencer marketing. In late 2021, the Assis-
and begun to rediscover pre-pandemic levels tant Deputy Commissioner of the Deceptive
of activity, the Bureau has increasingly directed Marketing Practices Directorate at the Bureau
its enforcement efforts towards regulating the announced the Bureau’s intention to make fur-
growing digital economy and combatting false ther updates to its already robust influencer
and misleading environmental and sustainability marketing guidance, a clear indication of the
claims. Bureau’s commitment to regulating advertising
and marketing in the digital economy.
Digital economy
Over the course of the last few years, and apart False online consumer reviews (astroturfing)
from its efforts to counter COVID-19-related Discouraging the practice of facilitating false and
misleading advertising claims, the Bureau has misleading online consumer reviews, also known
increasingly directed its efforts at the Canadian as astroturfing, through various methods, such
digital economy, with a particular focus on digital as encouraging employees to review a compa-
services and online marketing. This is particu- ny’s products and services without disclosing
larly notable given that a 2022 study conducted their employment relationship or providing cus-
on behalf of Ad Standards found that the digital tomers with undisclosed incentives to leave pos-
economy, despite the pervasiveness of online itive reviews, remains a key part of the Bureau’s
channels for commerce, learning, entertainment enforcement approach to the digital economy.
Although not a new area of concern, the Bureau
113 CHAMBERS.COM
has reiterated its intention to strictly enforce this Greenwashing and environmental claims
practice where it is identified, given its inherent In a departure from its focus on the digital
potential to mislead and harm consumers. economy as such, in January 2022, the Bureau
issued a CAD3 million civil administrative mon-
Proposed recommendations etary penalty against a coffee machine and
In a February 2022 submission to the federal coffee pod manufacturer in connection with its
government entitled “Examining the Canadian environmental claims, cementing the Bureau’s
Competition Act in the Digital Era”, the Bureau position against greenwashing claims, while
made numerous recommendations to amend effectively overturning existing guidance. The
the Act to strengthen its enforcement capabili- Bureau concluded that the manufacturer had
ties in an increasingly diverse and expansive dig- misled consumers as to the recyclability of its
ital economy in which advertising and marketing single-use coffee pods in areas where they are
are dynamic and the potential for deceptive and not accepted for recycling, as the coffee pods
misleading practices requires heightened regu- were not widely accepted in municipal recycling
latory attention. programmes outside of two Canadian prov-
inces. Further, the Bureau found that the coffee
For example, the Bureau recommended amend- pods gave consumers the impression that they
ing the “ordinary selling price” provisions (which could prepare the pods for recycling by simply
prohibit promoting a price as discounted when, peeling the lids off and emptying out the coffee
in fact, the advertised price is the ordinary price grounds, even though certain municipal recy-
of the product according to statutory tests) cling programmes required additional steps to
to reverse the burden of proof. Presently, the be followed before they would accept the pods
Bureau bears the burden of establishing that for recycling.
advertised discounts are not genuine. Under the
proposed recommendation, advertisers would Through the settlement, and in addition to the
bear the burden of proving that advertised dis- significant civil fine, the manufacturer was also
counts are, in fact, truthful. ordered to:
While this recommendation remains a proposal, • donate CAD800,000 to a Canadian charita-

two other recommendations were incorporated ble organisation focused on environmental
into Canada’s 2022 budget legislation and now causes;
form part of the Act: • change its recyclable claims and the packag-
ing of its coffee pods;
• an amendment to explicitly recognise drip • publish corrective notices about the recycla-
pricing (ie, the practice of concealing manda- bility of its product on its websites, on social
tory fees until later in the purchasing process) media, in national and local news media, on
as an express prohibition under the Act; and the packaging of all new brewing machines
• significant increases in administrative mon- and via email to its subscribers; and
etary penalties to provide a wider range of • enhance its corporate compliance pro-
remedies to counteract deceptive practices. gramme.
114 CHAMBERS.COM
Although the Bureau, in collaboration with pricing cases to date) with an online travel book-
the Canadian Standards Association, issued ing marketplace for, among other offences,
detailed guidelines on environmental claims in allegedly misleading consumers in relation to
2008 and has actively regulated and enforced prices and generating significant revenue from
greenwashing claims since then, the Bureau hidden fees.
has made it clear to consumers and advertis-
ers alike that it intends to pursue greenwashing Given the prevalence of this practice, as seen
claims with renewed vigour and with an updated through the extent of enforcement over the
approach to evaluating when such claims may years, the Canadian government adopted the
be misleading. Bureau’s recommendation to make drip pricing
an expressly enumerated practice under both
This is evidenced in the Bureau’s conclusion that the criminal and civil misleading advertising pro-
its environmental claims guidance published in visions of the Act. In contrast to prior drip pricing
2008 no longer reflects the Bureau’s current pol- cases, the introduction of the new drip pricing
icies or practices, or the latest standards and provisions will effectively remove the Bureau’s
evolving environmental concerns. This resulted burden to prove that such representations are
in the guidance being archived in late 2021, just false and misleading, an implementation of the
prior to the enforcement decision noted above. Bureau’s recommendation that advertisers and
The guidance document has not been replaced, brands increasingly bear the burden of proving
and no timeline to issue an updated version has that advertising is, in fact, truthful.
been announced. The decision is both a reflec-
tion of the extent to which changes in environ- Increased penalties
mental technologies, recycling programmes and Through changes included in the amendments
consumer sensibilities in an era of global climate to the Act implemented through 2022 budget
change can render considered guidance inap- legislation, the Bureau has also strengthened
plicable over time, and a warning to businesses its enforcement of deceptive marketing through
of the risk of enforcement action in an evolving significantly increased penalties and fines.
marketing landscape.
Previously, the maximum penalty for individu-
Drip pricing als (such as company directors) was capped at
Drip pricing, the practice of displaying one price CAD750,000 (CAD1 million for subsequent viola-
to consumers but ultimately charging a higher tions). The new maximum penalty for individuals
price through the incorporation of additional fees is whichever of the following is higher:
added incrementally during the purchase pro-
cess, has long been deemed false or misleading • CAD750,000 (CAD1 million for each subse-
under the Act’s deceptive marketing provisions, quent violation); and
with multiple historical examples involving a • three times the value of the benefit derived
variety of consumer-facing industries, including from the deceptive conduct, if that amount
retail furniture, event tickets and airlines. can be reasonably determined.
In February 2021, the Bureau entered into a For corporations, penalties were previously
CAD5 million settlement (the highest of all drip capped at CAD10 million (CAD15 million for sub-
115 CHAMBERS.COM
sequent violations). The new maximum penalty advertising in augmented reality and virtual real-
for corporations is whichever among the follow- ity (the precursor to the metaverse), as well as
ing is the highest: the use of non-fungible tokens (NFTs) in market-
ing and advertising. As has been seen with other
• CAD10 million (CAD15 million for each subse- regulators, such as the United States Federal
quent violation); Trade Commission, it will not be surprising to
• three times the value of the benefit obtained see new or amended guidance pertaining to the
from the deceptive conduct; or digital economy.
• if that amount cannot be reasonably deter-
mined, 3% of annual worldwide gross rev- Further developments are also expected in
enues of the corporation. enforcement and interpretation affecting the dig-
ital economy through the Bureau’s newly created
Looking ahead Digital Enforcement and Intelligence Branch,
Throughout the last few years, the Bureau has which is anticipated to become a centre of
repeatedly emphasised that active enforcement expertise on technology and data, also acting as
against deceptive marketing practices is, and an early-warning system for potential deceptive
will continue to be, a key priority, and therefore marketing issues in the digital economy impact-
an important focus for advertising and marketing ing consumers and businesses in Canada.
legal compliance.
As the Bureau has previously identified green-
Deceptive marketing, particularly in the digital washing as an area for increased enforcement
economy, is likely to continue to be a central moving forward, rises in complaints, investiga-
focus of the Bureau’s enforcement, and we tions and enforcement actions are expected,
expect to see further momentum from both the particularly due to increased consumer aware-
Bureau and the Canadian government to amend ness of greenwashing, the global significance of
the Act to ensure that consumer protection environmental choices and the archiving of the
remains at the forefront and the Bureau contin- environmental claims guidance document.
ues to be equipped with adequate enforcement
tools. Legal developments in this area in Canada will
undoubtedly remain frequent over the coming
Additionally, with ever-changing technologies, years and will warrant ongoing close attention
we expect to see a shift in priorities to newly by advertisers and marketers.
emerging themes of the digital economy, such as
116 CHAMBERS.COM
Baker McKenzie provides, through its Canadian media and digital marketing risk management;
advertising and marketing practice, full-service advertising clearance, standards and consum-
Canadian advertising and marketing support er/trade complaints; interface and advocacy
to leading domestic and international compa- with advertising regulators; and marketing-
nies, focused on food, cosmetic, drug, device related commercial agreements. The practice
and consumer product safety, packaging and has a long record of success in serving leading
labelling compliance; misleading advertising clients in the Canadian market, including high-
and deceptive marketing practices compliance; profile domestic and international companies
marketing-related privacy, anti-spam and direct in sectors including food and beverage, fash-
marketing regulation; consumer protection, e- ion and luxury, cosmetics and personal care,
commerce and online sales regulation; complex pharmaceutical and health products, consumer
contests, sweepstakes and promotions; social electronics and retail.
Authors
projects.
117 CHAMBERS.COM
Baker McKenzie (Toronto)

181 Bay Street
Suite 2100
Toronto
ON M5J 2T3
Canada
Tel: +1 416 863 1221

Fax: +1 416 863 6275
118 CHAMBERS.COM
CHINA
Law and Practice
Contributed by:
Cao Yu, Zhou Jian, Kang Ling and Wang Meng
Haiwen & Partners see p.139
Contents
2.6 Representation and Stereotypes in 7.2 Contests of Skill and Games of Chance p.133
Advertising p.125 7.3 Registration and Approval Requirements p.133
2.7 Environmental Claims p.125 7.4 Loyalty Programmes p.134
2.8 Other Regulated Claims p.125 7.5 Free and Reduced-Price Offers p.134
3. Comparative Advertising p.126 7.6 Automatic Renewal/Continuous Service
Offers p.134
4.5 Requirements for Use of Social Media
Platform p.128
119 CHAMBERS.COM
CHINA Law and Practice
Contributed by: Cao Yu, Zhou Jian, Kang Ling and Wang Meng, Haiwen & Partners
1. Legal Framework and • advertisements for medical treatment will be

Regulatory Bodies examined by the competent health adminis-
trative authority;
1.1 Primary Laws and Regulation • internet advertising activities will be examined
The Advertising Law of the PRC (“Advertising by the cyberspace administrative author-
Law”) sets forth the legal framework in connec- ity and industry and information technology
tion with advertising and marketing practices in administrative authority;
the PRC. The law has been amended three times • advertisements for NFTs and the metaverse
in the last decade in response to the rapid devel- will be examined by the banking and insur-
opment of the advertising industry. Provisions ance regulatory commission and securities
regulating advertising and marketing activities regulatory commission; and
are found in various national laws and adminis- • advertisements for medical-related products
trative regulations, including, but not limited to: will be examined by the drug supervision and
administrative authority.
• the Civil Code;
• the Anti-Unfair Competition Law; 1.3 Liability for Deceptive Advertising
• the Food Safety Law; Under PRC laws and regulations, the persons
• the Drug Administration Law; or entities that can be held liable for false adver-
• the Law on Protection of Rights and Interests tising include advertisers, advertising agencies,
of Consumers (“Consumer Protection Law”); the publishers of adverts, and also, in certain
• the Administrative Measures for the Broad- circumstances, those who endorse products.
casting of Advertisements on Radio and Administrative penalties resulting from violation
Television; and of the Advertising Law and the Anti-Unfair Com-
• the Provisional Administrative Measures for petition Law range from fines, forced cessation
Internet Advertising (“Provisional Internet of illegal acts, confiscation of illegal proceeds
Advertising Measures”). and revocation of business licences. Criminal
liability for false advertising, when the viola-
1.2 Enforcement and Regulatory tion amounts to a crime, may apply to advertis-
Authorities ers, advertising agencies and the publishers of
The State Administration for Market Regulation adverts (Article 222, the Criminal Law).
(SAMR), and a local counterpart to the SAMR,
an administration for market regulation (AMR), Advertisers
is the primary regulatory authority that enforces The advertiser, as the provider of the product/
both the Advertising Law and the Anti-Unfair service, is in principle liable for false advertising
Competition Law. with limited exceptions. The advertiser may be
subject to fines or confiscations in an admin-
While the SAMR is the key government author- istrative ruling and compensations in a civil
ity responsible for overall market regulation, the proceeding. If the false advertising constitutes
Advertising Law also empowers other regula- a criminal offence and the advertiser (being a
tory bodies to work with the SAMR to supervise legal person) is found guilty of false advertis-
advertising activities in specific industries. For ing under the Criminal Law, the directly respon-
instance: sible individual or the individual taking primary
120 CHAMBERS.COM
responsibility for that false advertising may be Advertising Law). Through the operation of this
held chargeable (Article 231, the Criminal Law). provision, the law essentially imposes liability for
verification on these third parties.
Agencies and Publishers
Both the advertising agent and the publisher 1.4 Self-Regulatory Authorities
of an advertisement must take responsibility The Advertising Law outlines self-regulation
for verification in connection with an advertise- rules in the advertising and marketing sector.
ment. They shall verify, among other things, the The main responsibility of self-regulatory bod-
certificates and other types of files provided ies is to assist the government authority to regu-
by the advertiser and also the content of the late the industry, set up industry standards and
advertisement to ensure consistency between develop an industry self-regulation system. The
the claims therein and the qualification of the key self-regulatory bodies, the China Advertis-
product. Liabilities similar to those applicable to ing Association (CAA) and the China Association
the advertiser may also apply to an advertising of National Advertisers (CANA), have adopted
agent and/or publisher if they knowingly produce certain ethical codes to help maintain order in
or publish a false advertisement. the advertising market and strengthen self-reg-
ulation in the industry. Violations of these ethical
Endorsers codes may result in admonishment or a circu-
A person who endorses a product may be held lated notice of criticism within the organisation.
liable for promoting falsely advertised products,
if the endorser is, or should have been, aware 1.5 Private Right of Action for
of the fact of false advertising but they still rec- Consumers
ommended or otherwise endorsed the product A private right of action is available for consum-
or service. In such cases, the AMR may confis- ers and private citizens to challenge advertising
cate the illegal income and impose a fine on the practices. When the content of an advertisement
endorser. In addition, if the subject product or infringes the legitimate interest of a consumer
service of a false advertisement concerns the or private citizen, the latter may have a cause of
life or health of consumers and causes injury action and claim for remedies based on appli-
or damage to the consumer, the endorser shall cable laws, such as the Civil Code, the Advertis-
take joint liability with the advertiser, advertising ing Law, the Consumer Protection Law, etc. The
agent, and advert publisher. Advertising Law specifically provides for a cause
of action for consumers against the advertiser
Third Parties if the advertisement is fraudulent, deceptive
Other participants involved in a false or mislead- or misleading and the consumer’s interest is
ing advertisement may also be held liable. For harmed after the purchase of products or receipt
example, the law requires that an administrator of services. The remedies available for private
of a public place, an operator of a telecommuni- actions include, in general, damages, rescission
cations business, or an internet information ser- and apologies.
vice provider shall stop the sending or publishing
of illegal advertisements if such entity knows or
should have known about the illegality relating
to the advertisements in question (Article 45, the
121 CHAMBERS.COM
1.6 Regulatory and Legal Trends finance, and emerging areas such as NFTs
The past 12 months have seen heightened regu- and the metaverse (See 9. Web 3.0).
latory efforts in the advertising industry continue,
including in relation to: 1.7 COVID-19, Regulation & Enforcement
Ever since the beginning of the COVID-19 pan-
• online adverts and live-streaming e-com- demic, regulatory attention has been focused
merce – the Administrative Measures for on sanctioning false advertising by companies
Internet Advertising (in draft form soliciting seeking to capitalise through mentions of the
public comments); Opinions concerning the virus in their advertising and marketing efforts.
Further Normalization of Online For-Profit In February 2020, the Supreme People’s Court,
Live-Streaming Marketing Activities to Pro- the Supreme People’s Procuratorate, the Minis-
mote the Healthy Development of the Indus- try of Public Security, and the Ministry of Justice
try; jointly clarified that false advertising related to
• targeted push and use of algorithm – the Per- the prevention or control of the COVID-19 emer-
sonal Information Protection Law; the Admin- gency falls within the scope of the crime of false
istrative Provisions on Algorithm Recommen- advertising (Article 2.5, Opinion on Cracking
dation for Internet Information Services; and Down Illegality and Crime that Jeopardise the
• medical cosmetology – the Administrative Prevention and Control of the Coronavirus Pneu-
Guide on Medical Cosmetology Advertising. monia Epidemic, February 2020). Following this
Opinion, court rulings and administrative pen-
On the law enforcement front, the areas worth alty decisions have shown a tendency to impose
noting include: penalties at the heavier end permitted by law on
cases related to COVID-19. In a case decided
• as the 20th Party Congress will be held in the in 2021 by a Shanghai court, two individuals
fall of 2022, regulatory efforts are carried out were found guilty of criminal false advertising
against behaviours such as taking advantage for falsely asserting that a certain kind of disin-
of the 20th Party Congress for commercial fectant they were promoting “could completely
publicity purposes (See 1.8 Politics, Regula- prevent the spread of COVID-19 virus” and so
tion and Enforcement); on, and bother were sentenced to imprisonment
• the role of the people’s procuratorates being for several months.
increasingly recognised in initiating public
interest litigation cases regarding deceptive 1.8 Politics, Regulation and Enforcement
advertising in areas closely related to people’s As the 20th Party Congress will be held in the fall
well-being, the Supreme People’s Procurator- of 2022, one of the government’s focuses this
ate was admitted as a member of the Inter- year is to maintain a steady public opinion envi-
Ministerial Joint Meeting on Rectifying False ronment in order to avoid negative impact on the
and Illegal Advertisements in March 2022; upcoming Party Congress, or to “purify market
and environment and social atmosphere to welcome
• actions against deceptive advertising in the 20th Party Congress”. In April, the SAMR
important areas continued to be emphasised, issued the Development Plan of the Advertising
including medical treatment, medicines, Industry for the 14th Five-Year Plan, of which the
dietary supplements, medical cosmetology, first “major task” is the regulation from the per-
122 CHAMBERS.COM
spective of correct political orientation. The local advertisement will be deemed to exist, includ-
AMRs have published guidelines for marketers ing where:
in this regard. For example, the Remind Letter on
Regulating Commercial Advertising and Promo- • the advertised product or service does not
tions issued by the local AMR of Beijing specifi- exist;
cally prohibits taking advantage of the 20th Party • in connection with the product’s performance,
Congress for commercial publicity purposes. functions, place of production, uses, quality,
specification, ingredients, price, producer,
On another side, regulatory authorities, together term of validity, sales condition, and honours
with government-backed industry associations, received, among others, or the service’s con-
have continued efforts in regulation on celeb- tents, provider, form, quality, price, sales con-
rities and moral issues. For example, endorse- dition, and honours received, among others,
ment by the so-called “talents with lapsed mor- or any commitments, among others, made
als” is another category specifically prohibited regarding the product or service, there is any
in the Remind Letter issued by the local AMR of inconsistency with the actual circumstances
Beijing. In addition, for the guidance of the par- that has a material impact on purchase deci-
ticipants in the advertising industry to strength- sions;
en the sense of social responsibility and ethics • any scientific research result, statistical data,
and form a self-regulatory mechanism on ethic investigation result, excerpt, quotation, or
issues in compliance with laws and regulations, other information, which is fabricated or
the Commission on the Advertising Ethics was forged or cannot be validated, has been used
established on 10 September 2021 under the as certification material;
supervision of the Inter-Ministerial Joint Meeting • the results of using the product or receiving
as a consulting institution within the China Adver- the service are fabricated; and
tising Association. As a result of the enhanced • consumers are otherwise defrauded or misled
regulation and change of public atmosphere, a with any false or misleading content.
heavier burden is imposed on advertisers to con-
duct thorough background due diligence checks Per the Supreme People’s Court, in determining
on potential endorsers, and advertisers have whether it is misleading and false publicity, the
been encouraged to enhance the moral clauses courts shall consider factors such as daily life
in their endorsement agreements to better cope experiences, the general attention of the relevant
with the potential moral risks of their endorsers. public, the facts causing misunderstanding and
the actual circumstances of the subject of the
publicity, etc.
2. Advertising Claims
2.1 Deceptive or Misleading Claims The scope of advertising claims subject to
According to Article 28 of the Advertising Law, the regulation of the Advertising Law is broad,
any advertisement that defrauds or misleads including both express claims and implied claims
consumers with any false or misleading content regarding products and services. Any product
will be a false advertisement. Furthermore, the or service-related information that can have a
law specifies a list of scenarios where a false material effect on a consumer’s decision-making
123 CHAMBERS.COM
is regulated by the Advertising Law, including • for a commodity advertised under the title of
introduction of the scale, location and environ- a high-quality product – the certificate of a
ment of the advertiser, as well as claims having high-quality product issued by the govern-
to do with business goodwill and the history of ment;
the advertiser. • for a commodity advertised as under patent
protection – the certificate of grant of patent;
The Advertising Law does not set forth how to • for a commodity advertised as bearing a
distinguish express and implied claims; instead, registered trade mark – the certificate of trade
the court and administrative regulator would mark registration;
have substantial discretion to determine wheth- • for cultural, educational or public health
er there is an actionable implied claim. The key advertisements – the certificate issued by the
to determining whether there is an actionable competent administrative department; and
advertising claim is whether the advertisement • the certificate issued by the competent
has any false or misleading content or defrauds authority, or its authorised institution, in the
or misleads consumers. The misrepresentation case of other types of advertisements for
made by an advertisement may be any informa- which certificates are required.
tion relating to product quality, composition and
ingredients, function and use, expiry date and In addition, the Advertising Law also requires
place of origin. To avoid being challenged, an advertisements in highly specialised industries,
advertising claim should be truthful and precise such as medical treatment, medicine, medical
and an “implied claim” is not a safe harbour. devices, dietary supplements, etc, be subject
to review by applicable authorities of the claims
2.3 Substantiation of Advertising Claims therein.
Advertising claim substantiation is largely
achieved by verification of the certifications of 2.4 Testing to Support Advertising
the advertiser/advertised products. The Adver- Claims
tising Law requires the advertising agent and The Advertising Law does not specifically pro-
advertisement publisher to examine the relevant vide for standards generally applicable to testing
certification documents, and to verify the con- that is conducted to support advertising claims.
tent of an advertisement under laws and admin- There have been some judicial findings indicat-
istrative regulations. According to the Adminis- ing that an advertising claim is more vulnerable
trative Regulations for Advertising, the following to being challenged if the statistics used in the
certification documents need to be provided claim are research results of institutes owned or
respectively in connection with the correspond- sponsored by the advertiser itself.
ing types of advertisements:
2.5 Human Clinical Studies
• for a commodity advertised as meeting qual- According to the Drug Administration Law, prior
ity standards – the certificate of inspection to the launch of any new drug, three rounds of
issued by the competent standardisation clinical trials are required to verify the safety and
administrative department or by a quality effectiveness of that drug. After the launch, the
inspection body; drug manufacturer shall collect information and
look into safety incidents according to the clini-
124 CHAMBERS.COM
cal treatment of patients. Therefore, for adver- publisher’s illegal income and fined the publisher
tisements of such pharmaceutical products, the CNY200,000.
requirement for clinical trials is in fact included
in the supporting documents (such as relevant 2.7 Environmental Claims
permits) required to be submitted. Advertise- To date, there have been no laws and regula-
ments for medical drugs are subject to content tions under PRC law specifically targeting the
censorship review by the drug supervision and ads conveying misleading information about the
administrative authority. environmental impact of a product, also referred
to as “greenwashing” ads. “Greenwashing” is
2.6 Representation and Stereotypes in generally understood as a form of deceptive
Advertising advertising or marketing strategy to persuade
Article 9 of the Advertising Law generally pro- the public that certain products, aims and poli-
hibits content “hindering public order or violat- cies are environmentally friendly, which may
ing social morality or involving ethnic, racial, include two typical types of behaviours.
religious, and gender discrimination”, among
other types of content. Though there are no The first type of greenwashing involves direct
detailed rules at state or local level in this regard, false descriptions of the environment-friendly
non-compulsory guidelines are being made. In features of a product or misappropriation of
December 2020, the government of Shenzhen certain environment-related certification marks
released the first official guidebook on gender (eg, the organic food or green food certifica-
equality in advertisement, which aimed to iden- tions). This type of greenwashing constitutes
tify and prevent gender discrimination in adver- false advertisement and therefore is subject to
tising practices. In the Administrative Guide on the regulation relating to false advertising.
Medical Cosmetology Advertising (“Medical
Cosmetology Advertising Guide”) issued by the The second involves a marketing strategy that
SAMR in November 2021, advertisements that focuses only on a few specific features of a
may create “appearance anxiety”, improperly product that can be beneficial to the environ-
associate undesirable appearance with nega- ment without referencing the other features or
tive remarks such as “laziness” and “poverty” the product as a whole or intentionally omitting
or improperly associate outstanding appearance defects in its products that could harm the envi-
with positive remarks such as “diligence” and ronment. By meticulous choice of terms used
“success”, are deemed to violate the good social in the advertisement, this type of greenwashing
moral and thus are closely watched. manages to escape from the regulation because
what is contained in the advertisement can hard-
Administrative cases have taken place regard- ly be deemed false or misleading and thus is
ing advertisements involving stereotyping or more difficult to catch as a matter of law.
discrimination. For example, in a case handled
by Shanghai local AMR, a bra advertisement 2.8 Other Regulated Claims
with descriptions including “a piece of equip- Advertising claims in connection with all the
ment enabling easy success for women” was following types of products and services are
found to violate social morality and involve gen- subject to special rules as stipulated in the law:
der discrimination, and the AMR confiscated the education and training, real estate, dietary sup-
125 CHAMBERS.COM
plements, medical treatments, drugs, medical For products and services not prohibited by the
devices, pesticides, veterinary drugs, feed and law from comparative advertising, on the basis
feed additives, tobaccos, spirits, commodity or that there is scientific evidence and/or proof that
services with an expected return on investment, the products/services being compared are of the
crop seeds, tree seeds, grass seeds, breeding same categories and are comparable in nature,
livestock and poultry, aquatic seedling and spe- comparative advertising is allowed, and identi-
cies breeding, etc (Articles 15-27, the Advertis- fying a competitor by name is not prohibited by
ing Law). the law per se.
In addition, certain expressions are specifically 3.2 Comparative Advertising Standards

prohibited in an advertisement relating to a reg- Generally speaking, all advertising claims must
ulated industry. For instance, according to the be truthful, objective and provable. The law does
Interim Administrative Measures for the Review not stipulate a specific standard for comparative
of Advertisements for Drugs, Medical Devices, advertising claims. However, the non-disparag-
Dietary Supplements and Formula Food for Spe- ing requirement discussed in 3.1 Specific Rules
cial Medical Purposes (“Interim Measures for or Restrictions is closely related to comparative
Review of Medical-Related Advertisements”), advertising.
advertisements on drugs, medical devices, die-
tary supplements and formula food for special There is a general understanding that has devel-
medical purposes shall not contain any com- oped regarding comparative advertising claims.
mitment-related language, such as “safe”, “no The products or services being compared must
toxic side effect”, “refund if found ineffective”, be comparable in nature. A comparison between
or “non-addictive”. products of a different nature to distinguish the
advertiser’s own product/service may be mis-
leading to consumers and disparaging to the
3. Comparative Advertising product/service with which it is being compared.
An advertisement is not required to disclose the
3.1 Specific Rules or Restrictions disadvantages of the subject product or service.
Comparative advertising is, with certain excep- However, in the case of comparative advertis-
tions and constraints, permitted by the Advertis- ing, if the advertiser excessively emphasises
ing Law, provided, however, that no advertise- the disadvantages of the compared product,
ment shall disparage the goods or services of while remaining silent about the disadvantages
any other producer or trader, and the advertiser, of its own product, such claims may mislead
advertising agent, and advertisement publisher the consumer to believe that the product being
shall not conduct any form of unfair competition advertised has no disadvantages. In such case,
in their advertising activities. Notwithstanding a comparative advertisement lacking complete
the foregoing, with respect to certain categories information may be viewed as a false advertise-
of products – such as medical drugs, medical ment.
devices and dietary supplements – comparative
advertising is not allowed.
126 CHAMBERS.COM
3.3 Challenging Comparative Claims ures require all online advertising to be con-
Made by Competitors spicuously marked with the word “advertising”,
An advertiser may challenge claims made by a regardless of its form. In practice, however, a
competitor based on different causes of action, significant quantity of “soft advertising”, which
including false advertising and unfair competi- does not appear as traditional advertising, exists
tion. If the advertiser exaggerates its own prod- and can be effective in driving consumer inter-
ucts and disparages the competing products, or est. Prior to placing promotional content online,
publishes false advertisements that contain non- marketers should assess whether their market-
truthful or misleading information, the advertiser ing activity will be subject to any advertising
may be found to have conducted false advertis- rules and their own role in that activity, as the
ing and commercial disparagement, and con- Advertising Law imposes different liabilities on
sequently be subject to administrative sanction different actors involved in advertising activities.
and civil liabilities for violating the Advertising
Law and/or the Unfair Competition law. The lia- Ensuring Content Originality
bilities include damages, fines, cessation of the Given the tremendous resources and informa-
illegal act, elimination of effects and revocation tion available online, marketers must ensure the
of the business licence. originality and quality of their advertising content
and prevent copying from other resources with-
out proper licensing or permission, which may
4. Social/Digital Media lead to severe copyright issues.
4.1 Special Rules Applicable to Social Local Regulation

Media Becoming aware of the various applicable
Digital advertising has seen tremendous devel- regional rules is a key marketing challenge. Each
opment in China over recent years. Forms of dig- of the AMRs, the primary government agencies
ital advertising range from advertising on social regulating advertising activities, has its particular
media to search engine advertising, e-com- scope of authority, based on regional territories,
merce retail advertising, and in-feed advertising. yet social media advertising often transcends
All such advertising activities are primarily regu- regional boundaries.
lated by the Advertising Law and the Provisional
Internet Advertising Measures, although the lat- Data Protection
ter is reportedly undergoing amendments and Marketers may have to play it safe with regard
is expected to be superseded by the contem- to data utilisation. If the marketer chooses to
plated draft Administrative Measures for Internet advertise on a less sophisticated social media
Advertising published by the SAMR for public platform, as opposed to a strong and sophisti-
comments in November 2021. cated network, the marketer needs to be more
careful about the rules protecting user data
4.2 Key Legal Challenges before it uses the data provided by the platform.
Defining “Advertising”
Determining what counts as an advert and the 4.3 Liability for Third-Party Content
role of players in digital advertising can be dif- As to the liability of the advertiser for content
ficult. The Provisional Internet Advertising Meas- posted by others on the advertiser’s site or
127 CHAMBERS.COM
social media channels, as long as advertising is with which the advertisers must comply on top
deemed to be in existence and the advertiser is of the existing laws.
deemed as an “advertiser” within the meaning of
the Advertising Law, that advertiser is required 4.6 Special Rules for Native Advertising
to “be responsible for the truthfulness of the Native advertising is a type of advertising that
advertisement”. Bona fide reliance by consum- matches the form and function of the platform
ers may be found, which could render the host upon which it appears. It can take the form of in-
advertiser liable due to content posted by others feed ads, search and promoted listing, content
on its website or social media. The law does not recommendation, Weibo posts, WeChat articles,
distinguish the identity of the publisher to deter- etc. The reason for it being called “native” is
mine the liability of the advertiser. To avoid being that such advertising integrates with the origi-
held liable, advertisers are advised to conduct nal content of a website or app and is designed
regular reviews of the content on its site or social with a focus on user experience. As such, native
medial channels, and to remove any undesirable advertising does not look like other advertising,
content. but more like part of the overall website or app
content.
4.4 Disclosure Requirements
In principle, the same disclosure requirements However, if it is a marketing activity to promote
apply to social media advertising and traditional a product or service, it should still be subject
media advertising. Meanwhile, it is noteworthy to the disclosure requirements as provided for
that Article 7 of the Provisional Internet Advertis- in 4.4 Disclosure Requirements. As mentioned,
ing Measures provides that internet advertising the Advertising Law and the Provisional Internet
shall be identifiable and clearly marked with a Advertising Measures both require that advertis-
recognisable “advertising” label. The current law ing be clearly identifiable. In practice, however,
does not provide for any exceptions for social due to the blurred lines between editorial and
media ads that have space limitations or con- sponsored claims, native advertising is usu-
straints. As discussed in 4.2 Key Legal Chal- ally not marked with an “advertising” label as
lenges, however, there are grey areas of adver- required by law. As such, in the event that native
tising on the internet that the current laws and advertising infringes on consumers’ rights and
rules do not seem to have fully caught up to yet. interests or “interrupts the order of the adver-
See also 4.6 Special Rules for Native Advertis- tising market”, its well-hidden form could bring
ing. more uncertainty as to how it should be regu-
lated.
4.5 Requirements for Use of Social
Media Platform 4.7 Misinformation
At this time, there appear to be no unique laws There is no legal definition of “misinformation”
or regulations that specifically apply to the use of in current PRC laws and regulations. However,
major social media platforms, such as WeChat or misinformation on the topics of public impor-
Weibo. Meanwhile, major social media platforms tance, if they disrupt the public order, may be
in China have developed their own editorial and subject to administrative penalties and even
content guidelines and verification procedures criminal liabilities in certain circumstances. The
Law on Administrative Penalties for Public Secu-
128 CHAMBERS.COM
rity provides that detention of up to ten days and paigns, resulting in two main business models:
a fine of up to CNY500 may be imposed where social media advertising and e-commerce retail
a person intentionally disrupts the public order advertising. Said models have not changed
by spreading rumours, making false reports of much during the past 12 months.
dangerous incidents and epidemic incidents or
otherwise raising false alarms, while a criminal Social Media Advertising
charge of fabricating and intentionally spread- The first model involves numerous popular
ing false information may result in public surveil- social media platforms in China (WeChat, Weibo,
lance, criminal detention or imprisonment of up Douyin, Kuaishou, Little Red Book, etc), where-
to seven years. As referenced in 1.7 COVID-19, by the influencer posts promotional content
Regulation & Enforcement, with respect to the for soft-sell advertising. Successful influencers
impact of the pandemic, the Opinion on Crack- take more creative approaches, such as sharing
ing Down Illegality and Crime that Jeopardise personal experience or offering competitive dis-
the Prevention and Control of the Coronavirus counts, instead of reciting overwhelming prod-
Pneumonia Epidemic specifies that fabricat- uct descriptions to persuading their audience.
ing false information about the pandemic and
spreading such online or on other media, or E-commerce Advertising
knowingly spreading false information about the In the second model, platforms (eg, Taobao Live
pandemic online or in other media which severe- Streaming, JD, Pinduoduo, etc) set up direct
ly disrupts the public order shall constitute the sales channels for various business owners to
crime of fabricating and intentionally spreading promote and sell their merchandise. Influencers
false information pursuant to the Article 291 of who promote their own brand/products may be
the Criminal Law. the business owner themselves, or a business
owner may hire an influencer to create a post or/
and conduct a live-stream to promote products
5. Social Media Influencer online.
Campaigns and Online Reviews
5.1 Trends in the Use of Influencer Influencer Campaigns
Campaigns An influencer campaign that promotes a brand
Popular types of influencers include celebrities, or product and influences the purchasing deci-
entrepreneurs, professional streaming hosts or sion of a consumer would be viewed as advertis-
key opinion leaders. Influencers have recently ing and, as such, be regulated by the Advertising
been put under even closer watch by the gov- Law, the Provisional Internet Advertising Meas-
ernment. Incidents involving influencers, such as ures and other regulations applicable to online
tax evasion, infringement of trade mark rights activities in general.
and false publicity, have been reported. Supervi-
sion by platforms of influencers has levelled up If an influencer campaign is carried in the form of
as a result. live-streaming marketing, the relevant parties –
including the platform, live-streaming operators,
China’s rather unique social media landscape marketing personnel and the influencer – shall
has led to an ecosystem for influencer cam- abide by the following regulations and rules:
129 CHAMBERS.COM
• the Opinions concerning the Further Normali- 5.3 Advertiser Liability for Influencer
zation of Online For-Profit Live-Streaming Content
Marketing Activities to Promote the Healthy An advertiser’s liability under the Advertising
Development of the Industry (March 2022); Law for the content posted by its influencer
• the Measures for the Administration of Live is determined mainly by two factors: whether
Streaming Marketing (for Trial Implementa- the influencer’s activity is advertising under the
tion) (May 2021); Advertising Law, and the relationship between
• the Notice of National Radio and Television the advertiser and the influencer. When advertis-
Administration on Strengthening the Adminis- ing is deemed to have taken place, the influenc-
tration of Live-Streaming Shows and E-com- er may be viewed as the advertising publisher
merce (November 2020); and where the influencer is presenting the advertis-
• the Guiding Opinions of State Administration ing content, or as the endorser where the influ-
for Market Regulation on Strengthening the encer personally certifies the product or service.
Regulation of Online Live-streaming Market-
ing Activities (November 2020). The Advertising Law imposes strict liability on
the advertiser with respect to the truthfulness
Among the live-streaming marketing partici- of the content of the advertisement. In a sce-
pants, live-streaming marketing platforms take nario where the influencer (being the advertising
primary responsibilities in connection with publisher or endorsement person) is conducting
the marketing activities. Such responsibilities advertising activity, the advertiser may be held
include going through filing formalities, obtain- liable if the content posted by the influencer is
ing necessary permits and approvals, and con- deceptive or misleading.
ducting security evaluation in accordance with
applicable laws and regulations. 5.4 Misleading/Fake Reviews
At this time, there appear to be no rules that
For live-streaming studio operators and mar- explicitly prevent employees of a company or
keting personnel, qualification review and real- a hired firm from posting reviews online of the
name authentication are required. They shall company’s own products. That said, the Anti-
perform the duties and obligations of adver- Unfair Competition Law prohibits business
tisement publishers, advertisement agents or operators from making false or misleading com-
advertisement endorsers, as applicable, if the mercial promotions regarding the performance,
live-streaming content constitutes a commercial function, quality, sales, user reviews, awards,
advertisement. etc, so as to defraud or mislead consumers.
Likewise, business operators are not allowed
Authorities are taking actions jointly to tighten to arrange fictitious transactions to assist other
regulations and tackle disorders. In April 2022, business operators to carry out false or mislead-
the Cyberspace Administration of China, the ing commercial promotions. A violation of such
SAMR and the State Taxation Administration rules may result in a fine of up to CNY2 million
jointly launched a nationwide campaign to rectify and revocation of a business licence.
misconduct in live-streaming and short videos,
including misconduct of false or improper mar-
keting, etc.
130 CHAMBERS.COM
6. Privacy and Advertising governing telemarketing, but the authority may

apply the Advertising Law for illegal advertising
6.1 Email Marketing activities and the Consumer Protection Law for
The Civil Code generally prohibits disturb- infringement of consumers’ rights.
ing the peace and privacy of an individual by
phone calls, text messages, instant messengers, 6.3 Text Messaging
emails, leaflets, etc, without such individual’s Advertising by text messaging is regulated by, in
express consent. Specifically, email marketing addition to the Advertising Law, specifically the
is also regulated under the Advertising Law, the Provisions on the Administration of Short Mes-
Measures for the Administration of Internet Email sage Services Communications (“SMS Provi-
Services and the Provisional Internet Advertising sions”), as well as the administrative regulations
Measures. and rules promulgated by local governments.
Electronic advertising must clearly indicate the In summary, the general requirements for SMS
real identity and contact information of the send- advertising are that:
er, and must provide to the recipient the means
to unsubscribe. • the recipient shall be informed and have given
consent, as commercial short messages
Legal liabilities for violation of such rules include can only be sent after informing the recipi-
confiscation of illegal proceeds, rectification of ent of the type, frequency and time limit of
wrongdoings, and a fine up to CNY100,000 as such messages and obtaining the consent of
applicable. recipients;
• the identity and contact information of the
6.2 Telemarketing SMS content provider shall be included; and
Telemarketing is governed by the Advertis- • a convenient and effective way to unsub-
ing Law and certain other administrative rules. scribe shall be provided along with the SMS.
According to the Proposal for Special Action
against Unsolicited Telemarketing Calls and its The SMS Provisions provide no specific liabil-
supporting work plan issued in 2018, for com- ity provisions. However, the Measures for the
mercial outbound telemarketing calls: Supervision and Administration of Online Trans-
actions (“Online Transaction Measures”) provide
• the consent of users shall be obtained; for rectification of wrongdoings and a fine of up
• a white list of users shall be established; and to CNY30,000 as liabilities. In addition, the law
• the time and conduct of telemarketing calls enforcement body may also rely on the Advertis-
shall be regulated. ing Law to enforce the prohibition against illegal
SMS advertising and the Consumer Protection
In summary, the user’s consent is essential for Law for infringement of consumer rights.
permitted telemarketing, alongside other factors,
including that the content of telemarketing, must 6.4 Targeted/Interest-Based Advertising
be lawful (eg, solicitation of gambling is strictly In connection with the use of consumer data for
prohibited in any event). There are no express purposes of targeting or retargeting consum-
legal liability provisions under the relevant rules ers with advertising, the Personal Information
131 CHAMBERS.COM
Protection Law (PIPL) provides that, in the case • tobacco ads are prohibited;
of a targeted push and commercial marketing • no advertising activity shall be conducted in
to individuals by means of automatic decision- kindergarten, primary and middle schools,
making, the option to not be targeted by their as well as on textbooks, school uniforms,
characteristics (eg, the option to refuse tailored stationery, etc; and
recommendation) or convenient opt-out options • no adverts for medicine, drugs, cosmetics,
shall be provided at the same time. etc, shall be published in mass media tar-
geted at minors.
Moreover, the newly promulgated Administra-
tive Provisions on Algorithm Recommendation In connection with minors under the age of 14,
for Internet Information Services provide that the advertisement shall not contain:
algorithm recommendation service providers
must provide users with the choice of selecting • any inducement for the minors to ask parents
services not targeted at a user’s personal char- to purchase the advertised goods or services;
acteristics, or refusing services based on such or
user’s personal characteristics. In addition, algo- • any unsafe activity that may cause imitation
rithmic recommendation service providers shall by minors.
not unreasonably differentiate between consum-
ers in terms of prices and other transaction con- If an advertiser violates the Advertising Law by
ditions based on and taking advantage of each sending advertisements to minors, the advertis-
consumer’s preferences, transaction habits and er may be subject to sanctions including recall
other characteristics. of illegal advertisements, fines, non-approval of
future advertisements in a one-year term, confis-
As for self-regulation, a nationwide industry cation, revocation of business licence, etc.
standard Personal Information Security Speci-
fication provides for restrictions on the use of Collection of personal information of minors is
personal information. It provides that, in using also covered by the PIPL, the Laws on the Pro-
personal information, clear identity directional- tection of Minors (“Minors Protection Law”) and
ity shall be eliminated to avoid identifying any the Provisions on the Cyberspace Protection of
individuals directly, unless otherwise neces- Children’s Personal Information. Consent from
sary for the realisation of the purpose of the use parents or other guardians of minors under the
approved by the subject of personal information age of 14 shall be obtained for processing such
upon authorisation. minors’ personal information. Personal informa-
tion of minors is categorised as, among other
6.5 Marketing to Children things, a kind of “sensitive personal information”
The Advertising Law introduced a set of restric- under the PIPL. As such, heightened require-
tions on advertising that targets minors under the ments regarding the collection and processing
age of 18, as well as certain additional restric- of sensitive personal information shall apply and
tions on advertising targeting minors under the separate processing rules shall be made specifi-
age of 14. In connection with minors under the cally for processing minors’ personal informa-
age of 18, the following restrictions apply: tion.
132 CHAMBERS.COM
Violation of the Minors Protection Law may result Lottery Management Regulations
in, among other things, confiscation of illegal If any person issues lottery tickets in the guise
turnover and relevant fines, a fine of up to CNY1 of prize-attached sales in order to seek profits
million if there is no illegal income, and shutdown and to earn the price difference from the sale
of the website in question. In addition, if such of commodities by setting prices much higher
action violates the PIPL, heavier penalties, such than the actual commodities under the lure of
as a fine of no more than CNY50 million or 5% large prizes, this act shall be deemed illegal and
of the perpetrator’s business income from the may even constitute a crime. According to the
previous year, may be triggered. Lottery Management Regulations, where anyone
violates these regulations by illegally issuing or
selling lottery tickets, or issuing or selling foreign
7. Sweepstakes and Other lottery tickets within the territory of the PRC,
Consumer Promotions they may be subject to criminal liability; where
no crime is constituted, they may be subject to
7.1 Sweepstakes and Contests a public security penalty.
“Sweepstakes” does not have a correspond-
ing legal term under existing Chinese laws. Advertising Rules
Likewise, there are no specific rules governing If sweepstakes are used as marketing promo-
sweepstakes as marketing activities. That said, tions to reward consumers and to draw atten-
sweepstakes can be loosely interpreted as prize- tion to products or services, then they shall be
attached sales, which are subject to certain rules subject to all advertising law requirements as a
and may trigger different legal issues. According form of advertising campaign.
to the Interim Provisions for Regulating Promo-
tional Activities, prize-attached sales refer to the 7.2 Contests of Skill and Games of
activities of business operators to provide con- Chance
sumers with prizes, articles or other benefits to The existing Chinese law has not defined what
sell commodities or obtain competitive advan- constitutes a “contest of skill” or a “game of
tages, such as lucky draws, gift giving and the chance”, nor does it provide for a distinction
like. between them. Gambling disguised as a contest
of skill or game of chance is strictly prohibited,
Anti-Unfair Competition Law yet the law has not provided the criteria to distin-
Laws and regulations such as the Anti-Unfair guish contests of skill and games of chance (as
Competition Law and the Certain Regulations on forms of marketing activity) from those regarded
Prohibiting Unfair Competition in Prize-Attached as prohibited gambling.
Sales promulgated by the State Administration
of Industry and Commerce (SAIC) impose regu- 7.3 Registration and Approval
lations on prize-attached sales. The regulatory Requirements
focus includes unclear information on prize- As “contests of skill” and “games of chance”
attached sales, internally determined prizes, are not defined legal terms, they are, in princi-
rigged winning results, inferior products with ple, subject to particular registration or approval
high prices, and the amount of the highest prize requirements only if the concrete activity falls
exceeding the statutory limit. into the scope of defined activities for which
133 CHAMBERS.COM
such requirements exist. For example, if the con- 7.5 Free and Reduced-Price Offers
tests or games constitute sports competitions, Generally speaking, the Chinese Anti-Monopoly
they are regulated by the sports administrative Law prohibits operators in the market that have
department under the State Council, soon in a dominant position from selling commodities at
accordance with the newly promulgated Sports a price below cost without justifiable reasons. In
Law which will come into effect in January 2023. addition, the Price Law forbids dumping sales
This new law provides that sports events are for the purpose of crowding out competitors and
subject to graded and classified management dominating the market, or implementing hidden
by the sports administrative authority. price decrease by way of increasing the grade
of merchandise or services. A marketer’s offer
7.4 Loyalty Programmes of free or reduced-price products or services is
There are no special laws or regulations for not illegal per se, but regulators may, in certain
loyalty programmes in the PRC. Similarly, the circumstances, deem such activities as unfair
term “loyalty programme” does not have a cor- methods to gain advantages over competitors
responding legal definition under the existing and impose rectification proactively. The Interim
Chinese law. A typical “point-based” loyalty Provisions for Regulating Promotional Activities
programme involves a business setting up an require business operators to clearly indicate
account for a customer and offering points for the benchmark for discount or price reduction,
each purchase, which accumulated points may the conditions attached to the discount, and the
be redeemed for discounts or gifts from the busi- time period for the promotion.
ness or connected stores. Though no special
laws or rules in this regard, there are rules to 7.6 Automatic Renewal/Continuous
be borne in mind if a business owner intends to Service Offers
launch a loyalty programme, including the fol- According to the Online Transaction Measures,
lowing. online transaction operators shall notify the con-
sumers in a prominent manner for consumers’
• If the loyalty points are deemed as virtual selection five days before a consumer accepts
currency for online games, specific rules relevant services or the date of automatic renew-
would apply, including the Provisional Meas- al. During the service period, operators shall
ures for the Administration of Online Games, also provide convenient and instant opt-out or
the Notice of the Ministry of Culture and the change options without charging unreasonable
Ministry of Commerce on Strengthening the fees. Violation may result in an order of recti-
Administration of Virtual Currency in Online fication of the misconduct and a fine of up to
Games, and the Notice on Regulating the CNY30,000.
Operation Order of Online Games and Prohib-
iting the Use of Online Game Gambling.
• Loyalty programmes may not be used as a 8. Sports Betting/Gambling
disguised commercial bribe.
• When a loyalty programme involves pre- 8.1 Legality & General Regulatory
paid membership, the business owner shall Framework
observe relevant rules specifically for prepaid Under the PRC regulatory framework, betting
cards. and gambling activities, including those related
134 CHAMBERS.COM
to sports, are generally prohibited. Where there 2022 as a non-compulsory initiative, affirms
is a violation, the threshold for administrative lia- that NFTs may be utilised to enrich the digital
bility could be as low as, for organisers, accumu- economy and promote the development of the
lating a profit of CNY300 and, for participants, culture and creativity industry. However, it reiter-
personal gambling of amounts of CNY200, ates that financialisation, money-laundering and
under different enforcement rules promulgated securitisation in connection with the NFTs are
by local provincial authorities. Criminal liabilities still strictly forbidden.
may be incurred if one engages in gathering
people to gamble for profit, engaging in gam- So far, there does not seem to be specific
bling as one’s profession, operating casinos, or statutory rules governing NFT activities or
organising PRC citizens to gamble outside China the advertising thereof. In September 2021, a
involving large amounts. notice issued by high level authorities including
the People’s Bank of China, the Office of the
8.2 Special Rules & Regulations Central Cyberspace Affairs Commission and the
According to the Advertising Law, advertising is Supreme People’s Court stressed the prohibition
prohibited from including gambling content. For on providing commercial display and marketing
the avoidance of doubt, the China Sports Lottery for virtual currency-related business activities.
issued by the General Administration of Sports
and the China Welfare Lottery issued by the 9.2 Metaverse
Ministry of Civil Affairs, are not deemed “gam- The metaverse is commonly understood as an
bling”. Advertisements for such lottery tickets integrated network of 3D virtual worlds facilitat-
are managed by their respective issuer authority ed by the use of virtual reality and augmented
and supervised by the PRC Ministry of Finance reality technologies. This concept became pop-
and the SAMR. ular in China in 2021, but it is yet to be officially
defined by the legislators or regulators. There
are no special laws or regulations that apply to
9. Web 3.0 advertising within the metaverse, nor are there
any administrative or judicial cases in this regard,
9.1 Cryptocurrency and Non-fungible given its youth as a concept. Nevertheless, there
Tokens (NFTs) are notices alerting the public against illegal fun-
To date, there has been no official definition of draising and fraud wrapped under the cover of
cryptocurrency or NFT at the legislative level in the metaverse, and the existing advertising laws
China. Regulatory bodies emphasise uphold- and regulations will apply where applicable.
ing the Renminbi as the statutory currency, and
cracking down on illegal financial activities of 9.3 Digital Platforms
illegal fundraising (such as initial coin offerings), The digital advertising platforms and the use
financial fraud, pyramid schemes and money of advertising technology (adtech) are mainly
laundering through cryptocurrency. The Initiative regulated by the Provisional Internet Advertising
to Prevent NFT-Related Financial Risks, jointly Measures. Under the Provisional Internet Adver-
issued by the China National Internet Finance tising Measures, the internet advertisements
Association, the China Banking Association may be published in a well-targeted manner by
and the Securities Association of China in April utilising, for example, the information integra-
135 CHAMBERS.COM
tion and data analysis services provided by the vices can be found in the Advertising Law and
advertising demand-side platforms, media-side the regulations governing the advertising of
platforms and advertising information exchange products and services in special sectors, includ-
platforms. ing the following.
In connection with the use of adtech, the follow- • Food – From the perspective of advertis-
ing activities are expressly forbidden under the ing regulation, food can be categorised as
Provisional Measures: “dietary supplements”, “formula food for
special medical purposes” and ordinary food.
• intercepting, filtering, covering, fast-forward- The Advertising Law and the Food Safety
ing or implementing other restrictions on the Law provide for specific restrictions on the
advertisements duly operated by others; presentation in the advertisements of dietary
• disrupting the normal transmission of adver- supplements and food. For instance, adver-
tising data, falsifying or blocking advertise- tisements of dietary supplements and food
ments duly operated by others, etc; and may not claim that such products can be
• inducing false quotes, seeking unlawful used for prevention or treatment of diseases,
interests or undermining others’ interests by and that advertisements of baby dairy prod-
utilising false statistical data, communication ucts, beverages and other food claiming to
effects, etc. be full or partial substitute for breast milk are
prohibited from distribution in mass media or
In addition, the Administrative Provisions on public places, etc. Besides, advertisements in
Algorithm Recommendation for Internet Infor- connection with the former two categories are
mation Services regulate the use of algorithmic subject to prior censorship pursuant to the
technologies, including generation and synthe- Interim Measures for Medical-Related Adver-
sis, personalised push, sorting and selection, tisements. According to the Food Safety Law,
retrieval and filtering, scheduling decision-mak- formula food for special medical purposes
ing, etc, all of which may be considered as dif- shall be subject to regulations applicable to
ferent types of adtech. Among other things, the drugs.
algorithm recommendation service providers are • Medical Devices and Drugs (including formula
required to inform the users in a noticeable way food for special medical purposes) – Adver-
with respect to the provision of algorithm recom- tisements in connection with medical devices
mendation services, and to publicise the basic and drugs are subject to prior censorship pur-
principles, purposes and main operating mecha- suant to the Interim Measures for Review of
nisms of algorithm recommendation services in Medical-Related Advertisements. Restrictions
an appropriate way. under the Advertising Law include, without
limitation, that:
(a) advertisements for special drugs (includ-
10. Product Compliance ing narcotics, psychotropics, toxic drugs
for medical purposes, radioactive drugs,
10.1 Regulated Products etc), pharmaceutical precursor chemicals,
Specific rules and restrictions that apply to the drugs, medical devices and treatment
advertisements of regulated products and ser- methods for drug abuse rehabilitation are
136 CHAMBERS.COM
prohibited, as well as drugs for special the supervision of applicable authorities.

use by the army and preparations made Correspondingly, the advertising of related
by medical institutions; products and services is also prohibited.
(b) prescription drugs other than those set
out as being prohibited from advertis- 10.2 Other Products
ing, as well as certain full-nutrition for- Beyond the specific products listed in 10.1
mula food as a kind of formula food for Regulated Products, there are other products or
special medical purposes, may only be services for which advertisements are regulated,
advertised in specialised pharmaceutical including the following.
or medical journals jointly designated by
both the health and drug administrative • Medical treatments – Similar to drugs and
departments of the State Council; and medical devices, advertisements for medical
(c) advertisements of drugs, medical de- treatments are also subject to prior censor-
vices, and medical treatments may not ship. Standards and procedures for the
include content such as assertions or review of such advertisements are provided
guarantee about efficacy or safety, state- in Administrative Measures on the Advertising
ment on the recovery or response rate, for Medical Treatments, as well as the newly-
etc. issued Medical Cosmetology Advertising
• Alcohol – Article 23 of the Advertising Law Guide.
provides that advertisements for alcohol • Education and training – Article 24 of Adver-
may not include contents of inducement or tising Law prohibits advertisements for edu-
instigation of alcohol consumption, promotion cation and training from including contents of:
of immoderate drinking, depiction of drinking (a) explicit or implicit guarantees for suc-
actions, depiction of driving cars, boats, air- cessful enrolment, passing certain exami-
planes, etc, or explicit or implicit expression nations, obtaining certain degree quali-
that alcohol consumption would ease tension fications or certificates, or the effect of
and anxiety and enhance physical stamina, education or training, etc;
etc. (b) explicit or implicit expression of the
• Vaping/tobacco – Article 22 of the Advertis- advertiser involving relevant examination
ing Law and related regulations provide that institutions or its personnel, or writers of
advertisements for tobacco may not be pub- the examination questions in the educa-
lished in mass media, in public places, out- tion or training;
doors, or on the internet, and that no tobacco (c) recommendation or endorsement using
advertisement of any kind may be sent to the name or image of scientific research
minors. Advertising in connection with vaping or academic institutes, etc.
shall be subject to the regulations applicable • Real estate – Article 26 of Advertising Law
to tobacco. provides certain specific restrictions on
• Cannabis – Cannabis is deemed to be a kind advertisements of real estate, including that
of narcotic drug and is strictly restricted in information of the property listed shall be
the PRC. Only very limited usage of canna- true; information as to the area shall be the
bis, including for the purpose of medical use, floor area or the usable area; such advertise-
education and research, is permitted under ments shall not include contents of commit-
137 CHAMBERS.COM
ment on increases in property value or invest- • Other products or services – Advertising of

ment return, etc. Provisions on the Release the following products or services are also
of Real Estate Advertisements, issued by the regulated under applicable laws or regula-
SMAR, include more detailed regulations on tions: pesticides, veterinary drugs, feed and
the advertising of real estate. feed additives, crop seeds, tree seeds, grass
• Investment solicitation/fundraising/internet seeds, breeding livestock and poultry, aquatic
financing/personal financing – As financing seedling and species breeding, wild animals
is closely related to the security of private and the relevant products, products relating
assets, advertising in connection with vari- to stamp collection, souvenir medals, Ren-
ous kinds of fundraising or financing services minbi, insurance, and services of certified
is heavily regulated. Generally speaking, public accountants and lawyers, etc.
such advertisements are required to include • Advertisements other than those of medi-
reasonable risk warnings, and are prohibited cal treatment, drugs and medical devices
from including explicit or implied statements – Any other advertisement claims shall not
of guarantee for future earnings, or recom- involve the function of treatment of diseases
mendation or endorsement by using the or include medical terms or terms that may
name or image of academic institutions or mislead the readers to confuse the promoted
industry associations, etc. product with drugs or medical devices.
138 CHAMBERS.COM
Haiwen & Partners was founded in May 1992 theme park projects; recording and music pub-
and is one of the leading general practice law lishing; live concerts; literary publishing; adver-
firms in the People’s Republic of China, with tising; and new media matters. The firm’s clients
around 200 lawyers in total working in its Bei- include major film studios, leading investment
jing, Chengdu, Hong Kong, Shanghai and companies, as well as top talent, producers
Shenzhen offices. The firm started its pioneer- and directors, both in China and internationally.
ing entertainment and media law practice more Combined with its strong practice in the capital
than a decade ago, involving a wide variety of markets and M&A areas, Haiwen also provides
practice areas in the entertainment industries, extensive legal services to clients conducting
including the development, production, and IPOs, M&A, and other general corporate finance
distribution of film and television projects; large transactions in the entertainment industries.
Authors
Cao Yu is a partner in Haiwen’s Zhou Jian is a partner in
Beijing office. Mr Cao Haiwen’s Hong Kong office. She
spearheads the firm’s has a deep understanding of,
entertainment industry practice. and extensive experience in, the
He is extensively involved in areas of entertainment and
transactions including the media law. She has provided
development of film and television projects, comprehensive services with respect to a
Sino-foreign co-productions, production diverse range of projects, including organising
financing (including debt financing and slate the production of commercials, structuring
financing matters), establishment of production sponsorship deals for location-based
and financing vehicles, large theme park entertainment sites, assisting distributors in
projects, music industry contracts, personal formulating marketing strategies for films and
management, as well as advertising and new TV plays, and arranging product placement
media. Mr Cao is also experienced in general and other types of commercial tie-ins in
corporate and finance transactions, such as connection with films and video games. Ms
IPO and M&A matters, which helps him Zhou is qualified both in the State of New York
structure complicated transactions in the in the US, and the PRC.
entertainment and media industries.
139 CHAMBERS.COM
Kang Ling is an associate at Wang Meng is an associate at

Haiwen. She joined Haiwen in Haiwen. She joined Haiwen in
2018 and focuses her practice 2018. Her practice focuses on IP
on media and entertainment and entertainment law. Her
matters, including financing, experience includes film and
development, production and television production,
distribution of domestic films and Sino-foreign investment and financing, cross-border IP
co-productions, foreign films importation and licensing and operation, game development
distribution, content and IP licensing and and licensing, music publishing, licensing and
acquisition, video game exploitation, talent live performance, and other relevant legal
management and online content compliance. services. Ms Wang is admitted to practice law
Ms Kang is also involved in joint venture in the State of New York in the US, as well as
transactions in the entertainment industry. Ms in the PRC.
Kang has passed the PRC bar exam.
Haiwen & Partners

20/F, Fortune Financial Center,
5 Dong San Huan Central Road
Chaoyang District,
Beijing 100020
China
Tel: +86 10 8560 6888

Fax: +86 10 8560 6999
Email: caoyu@haiwen-law.com
Web: www.haiwen-law.com
140 CHAMBERS.COM
CHINA Trends and Developments

Contributed by:
Cao Yu, Zhou Jian, Kang Ling and Wang Meng
Haiwen & Partners see p.146
Overview the SAMR convened a nationwide videoconfer-

The past 12 months have seen the continua- ence with its local counterparts to, among other
tion of the heightened regulatory efforts in the reasons, emphasise the task of implementing,
advertising industry. The main reasons, as with throughout the year, Secretary General Xi’s
the preceding 12 months examined last year, instruction (initially reported in 2016) that adver-
are two-fold: the political environment and mar- tisements must also have correct ideological
ket development. On the political side, the 20th orientation. The theme of “purifying the market
Party Congress will be held soon in autumn of environment and social atmosphere to welcome
2022. The government needs to ensure that the 20th Party Congress” was put in a prominent
public opinion remains in order to prevent any position. Regulatory efforts are required to be
potential negative impacts on the upcoming Par- carried out in pursuit of these goals.
ty Congress. Current challenges in the economic
sector, as well as in other sectors, may have also As identified last year, the government pub-
contributed to the government’s position. On the lished categorical descriptions of the content
market development side, restrictions on offline that would be prohibited from a regulatory per-
activities due to COVID-19 have continued to spective. This year, local governments published
stimulate the development of online business such guidelines as well. For example, the Beijing
activities. The online business sector has con- municipal government published a “reminder
tinued to grow in complexity and sophistication, letter” on the regulation of commercial adver-
requiring the regulatory side to catch up. The tisements, specifically prohibiting, among other
growth in this sector has also brought problems things, taking advantage of the 20th Party Con-
that must be addressed promptly, according to gress for commercial publicity purposes. The
the government. In addition, issues in the pro- “reminder letter” enumerated such prohibited
tection of personal data as well as issues related items that can be seen elsewhere, including
to the metaverse/NFTs have continued to impact the party’s flag or emblem, the use or disguised
the advertising industry. use of the national flag, the national emblem,
the national anthem, or use of the flag, emblem,
Guidance on “Correct Orientation” as a or theme song of the armed force (the People’s
Matter of Ideological Requirement Liberation Army).
The State Administration of Market Supervi-
sion (SAMR) issued the Development Plan of Entertainers with lapsed morals
the Advertising Industry for the 14th Five-Year The “reminder letter” of the Beijing govern-
Plan (“十四五”广告产业发展规划) which was put into ment has identified a prohibited category that is
implementation on 22 April 2022. The plan iden- especially noteworthy. That is the endorsement
tified ten “major tasks”. Ranked first is regulation by the so-called “entertainers with lapsed mor-
from the perspective of correct political orien- als”. During the past few years, there have been
tation. Shortly before the implementation date, many incidents where entertainers – including
141 CHAMBERS.COM
actors, actresses and musicians – were found by Online Adverts

the government and/or society to have “lapsed Online adverts have continued to grow. It is
morals”. During the 12 months in question, there believed that the restrictions on offline advertis-
were also quite a few incidents of such entertain- ing and marketing activities, largely due to the
ers making headlines due to the nature of their COVID-19, have provided more opportunities
behaviour, the amount of money involved (eg, for online adverts to develop. On 26 Novem-
hundreds of millions of Renminbi for tax eva- ber 2021, the SAMR published, in draft form
sion). The types of conduct of such entertain- soliciting public comments, the Administrative
ers which have incurred punishment/discipli- Measures for Internet Advertising (互联网广告管理
nary measures reportedly include drug taking, 办法) (the “Draft Measures”). The Draft Measures
prostitution, tax evasion, domestic violence, are meant to modify and replace the Provisional
inappropriate public comments, etc. Dozens Administrative Measures for Internet Advertis-
of entertainers have reportedly been added to ing (互联网广告管理暂行办法)(the “Provisional Meas-
lists of those with “lapsed morals” put together ures”). The Draft Measures are intended to, as
by TV stations, platforms and industry associa- identified in the beginning of this article, cope
tions. The government has also issued notices with the development of online advertising activ-
to prevent such entertainers from re-emerging ities, including in the “forms, operation models,
or at least make it difficult for them to do so. and ad serving methods” of online adverts. In
Advertisements of certain entertainers who were the explanations that the SAMR provided for
subject to disciplinary measures have had to be the amendment of the rules, it is noted that the
taken down shortly after their launch. Provisional Measures “were not fully compatible
with the new situations and new requirements
There have been discussions/controversies with concerning the regulation of internet advertise-
respect to whether entertainers who have previ- ments”, because of the “variety, diversity, and
ously been punished for having “lapsed morals” extensiveness” of online adverts, especially with
should be given a second chance. For business- the expansion of online adverts from computers
es in need of entertainers for endorsements, or to mobile devices.
for other less significant associations, it is advis-
able to check the history of the “moral” aspects The Draft Measures have included specific pro-
of such entertainers. The market practice is that visions in light of the above to cope with the new
businesses now include rather stringent clauses developments and new challenges.
in their contracts with entertainers concerning
the appropriateness of their off-screen conduct, For example, the Draft Measures have further
subject to extensive indemnification. Such claus- emphasised the identifiability of online adverts
es have, at times, become heated negotiation by:
points with respect to the scope and extent of
their application. From a regulatory perspective, • requiring that “soft adverts” in forms including
it is likely that the high-pressure stance of the news reports, experience sharing, consumer
government, including the reluctance to allow assessments and incorporation of shopping
entertainers a “second chance”, will continue. links to be labelled with the word “advertise-
ment” conspicuously;
142 CHAMBERS.COM
• further strengthening consumers’ ability to In connection with the Opinions, the above-
close pop-up adverts by just “one touch” by mentioned three agencies launched a regulatory
requiring such adverts to show the “close” campaign that ran for two months from 15 April
sign conspicuously; 2022 to address “disorderly behaviours” in the
• strengthening the supervision over ad endors- live-streaming and short video areas. “Disorderly
ers, including the expansion of local govern- behaviours” have included:
ments’ jurisdiction over such ad endorsers;
and • content that has excessive sex, vulgarity, or
• strengthening the requirements on the oddness;
responsibility to be shouldered by relevant • false advertising in the sale of products dur-
entities such as internet platforms as internet ing live-streaming sessions;
adverts operators. • evasion of tax;
• using specified groups of people, such as
Live-Streaming E-commerce minors, people with a disability or people
During the past 12 months or so, in the online suffering from illness, to attract attention,
adverts space, live-streaming e-commerce especially the attention of the elderly; and
appears to be a sector in which new challenges • malicious advertising and marketing (false
have tended to cluster together. On 25 March public persona, etc).
2022, several ministerial-level agencies (the
Cyberspace Administration, the General Admin- The campaign reportedly disciplined 563,000
istration of Tax, and the SAMR) jointly published live-streaming rooms, cleared 2.35 million short
Opinions concerning the Further Normalization videos, closed 120,000 consumer accounts, and
of Online For-Profit Live-Streaming Marketing disciplined 218,600 hosts’ accounts and short
Activities to Promote the Healthy Development videos.
of the Industry (关于进一步规范网络直播营利行为促进
行业健康发展的意见). The Opinions impose more Targeted Push and Use of Algorithm
supervisory responsibilities on the online live- The new Personal Information Protection Law
streaming platforms, requiring them to adopt came into effect on 1 November 2021. This
a series of measures to strengthen regulation. law provides, among others, restrictions on the
Such measures include requiring the platform to: advertiser’s ability to conduct targeted push of
adverts to individuals through algorithm/auto-
• report information of live-streaming accounts mated decision-making. For example, the law
to the provincial-level cyberspace administra- provides that, to push information to individuals
tions and local tax authorities including the through the method of automated decision-mak-
ID, account, online nickname, category of ing, the advertiser needs to provide consumers
revenue, and profit information; concurrently with options not targeted at such
• adopt a system of disciplinary measures cor- consumers, or with easy-to-operate methods to
responding to the extent of rule-breaking by decline such push.
live-streaming accounts;
• withhold and deduct individual income tax on On 1 March 2022, the Cyberspace Adminis-
the revenues of the live-streaming broadcast- tration, the Ministry of Industry and Informa-
ers, etc. tion Technology (MIIT), the Ministry of Public
143 CHAMBERS.COM
Security, and the SAMR jointly published the Bank of China ‒ PBOC), the Supreme People’s
Administrative Provisions on Algorithm Recom- Court, the Supreme People’s Prosecutorate,
mendation for Internet Information Services (互联 and several ministries with regulatory responsi-
网信息服务算法推荐管理规定). These new provisions bility for different aspects of the financial mar-
are aimed at, inter alia, curbing the abusive ket jointly published a notice calling for further
use of algorithm in advertising and marketing. prevention and punishment in connection with
Among the uses that have been identified by the transaction of virtual currencies. The notice
the new provisions include, without limitation, announced that transactions using virtual cur-
using algorithms to screen information, making rencies are considered illegal financial activities.
excessive recommendations, manipulating topic Such activities include exchanges between the
lists or the order of search results, controlling legal currency and virtual currencies, exchanges
top trending searches, and similar activities used between different virtual currencies and the pro-
to interfere with the presentation of information. vision of intermediary and pricing services for
The Cyberspace Administration also published, the transaction of virtual currencies.
in early March 2022, a draft regulation to solicit
public comments on the push of information by In addition, the notice aims to crack down on
way of pop-up windows. This new regulation activities in relation to securities and futures.
prohibits, for example, the abusive use of indi- Notably, the notice states that the provision of
vidualised pop-up window services and pushing services by a virtual currency exchange located
content that may affect the health of body and outside the PRC to residents in the PRC through
mind of minors. the internet will constitute illegal financial activi-
ties under PRC law. In addition to the govern-
At the enforcement level, the government has ment agencies, key industry associations in the
been conducting campaigns against apps that financial sector also published an announce-
are considered to infringe on the legitimate inter- ment on 13 April 2022 calling for their members
ests of customers. On 2 June 2022, the MIIT to prevent financial risks potentially brought
published a notice on apps found to be infring- about specifically by NFTs (Initiative to Prevent
ing on customer interests. A total of 368 apps NFT-Related Financial Risks, in Chinese 关于防范
were announced to have infringed on customer NFT相关金融风险的倡议). Among other provisions,
interests. The main problems found included the Initiative calls for members:
the collection of personal information in excess
of the appropriate scope and the forced use of • not to include financial assets (such as secu-
targeted push functions. rities, insurance, rare metal) as underlying
commodities of the NFT products;
NFTs and Metaverse • not to split the ownership of NFT products to
The government has continued to keep a close conduct fundraising through initial coin offers
watch, from financial security and supervision (ICOs);
perspectives, on activities involving NFTs and • not to provide the type of transaction venues
the metaverse. Multiple regulations have been known as “securities exchange”.
rolled out in the past 12 months. On 15 Septem-
ber 2021, ten high-level government agencies, The Initiative also requires real-name authentica-
including the central bank of China (the People’s tion of parties engaged in offering, selling, and
144 CHAMBERS.COM
buying activities. In fact, ICOs have long been Summary

considered prohibited by the PBOC. The contin- In certain other fields examined last year, the
ued measures against ICOs appear to suggest government has continued its regulatory and
that this method of fundraising may have been supervisory efforts. Such fields include cosme-
emerging in some way. tology adverts, adverts on subject-based off-
campus training and celebrity endorsements.
Fundraising based on the concept of the With new challenges emerging, the government
metaverse is a new form of challenge for regis adjusting its priorities and using legislation
ulators, who have reacted swiftly to prohibit to remain up to date. The upcoming 20th Party
such activities. On 18 February 2022, the China Congress will set the direction of the country as
Banking and Insurance Regulatory Commission a whole. The effects of this important meeting
(CBIRC) published a “risk reminder” in the wake on the market remain to be seen, including the
of illegal (and even criminal) fundraising activi- effects on the advertising industry in terms of
ties selling “metaverse investment projects”, control and innovation.
“metaverse blockchain games”, etc. According
to the risk reminder, perpetrators go as far as to
openly publicise super high investment return
rates. Given the continued attention on the
metaverse, the government may be expected to
continue to emphasise the illegal activities tak-
ing advantage of the metaverse, especially those
that may reach the general public and challenge
the stability of society, such as fundraising from
the general public.
145 CHAMBERS.COM
Haiwen & Partners was founded in May 1992 theme park projects; recording and music pub-
and is one of the leading general practice law lishing; live concerts; literary publishing; adver-
firms in the People’s Republic of China, with tising; and new media matters. The firm’s clients
around 200 lawyers in total working in its Bei- include major film studios, leading investment
jing, Chengdu, Hong Kong, Shanghai and companies, as well as top talent, producers
Shenzhen offices. The firm started its pioneer- and directors, both in China and internationally.
ing entertainment and media law practice more Combined with its strong practice in the capital
than a decade ago, involving a wide variety of markets and M&A areas, Haiwen also provides
practice areas in the entertainment industries, extensive legal services to clients conducting
including the development, production, and IPOs, M&A, and other general corporate finance
distribution of film and television projects; large transactions in the entertainment industries.
Authors
Cao Yu is a partner in Haiwen’s Zhou Jian is a partner in
Beijing office. Mr Cao Haiwen’s Hong Kong office. She
spearheads the firm’s has a deep understanding of,
entertainment industry practice. and extensive experience in, the
He is extensively involved in areas of entertainment and
transactions including the media law. She has provided
development of film and television projects, comprehensive services with respect to a
Sino-foreign co-productions, production diverse range of projects, including organising
financing (including debt financing and slate the production of commercials, structuring
financing matters), establishment of production sponsorship deals for location-based
and financing vehicles, large theme park entertainment sites, assisting distributors in
projects, music industry contracts, personal formulating marketing strategies for films and
management, as well as advertising and new TV plays, and arranging product placement
media. Mr Cao is also experienced in general and other types of commercial tie-ins in
corporate and finance transactions, such as connection with films and video games. Ms
IPO and M&A matters, which helps him Zhou is qualified both in the State of New York
structure complicated transactions in the in the USA, and the PRC.
entertainment and media industries.
146 CHAMBERS.COM
Kang Ling is an associate at Wang Meng is an associate at

Haiwen. She joined Haiwen in Haiwen. She joined Haiwen in
2018 and focuses her practice 2018. Her practice focuses on IP
on media and entertainment and entertainment law. Her
matters, including financing, experience includes film and
development, production and television production,
distribution of domestic films and Sino-foreign investment and financing, cross-border IP
co-productions, foreign films importation and licensing and operation, game development
distribution, content and IP licensing and and licensing, music publishing, licensing and
acquisition, video game exploitation, talent live performance, and other relevant legal
management and online content compliance. services. Ms Wang is admitted to practice law
Ms Kang is also involved in joint venture in the State of New York in the US, as well as
transactions in the entertainment industry. Ms in the PRC.
Kang has passed the PRC bar exam.
Haiwen & Partners

20/F, Fortune Financial Center,
5 Dong San Huan Central Road
Chaoyang District,
Beijing 100020
China
Tel: +86 10 8560 6888

Fax: +86 10 8560 6999
Email: caoyu@haiwen-law.com
Web: www.haiwen-law.com
147 CHAMBERS.COM
JAPAN
Russia
Law and Practice
China
N. Korea
Contributed by: Japan
S. Korea
Akira Inoue and Hiroaki Nagahashi, Baker McKenzie Tokyo
(Gaikokuho Joint Enterprise) see p.159
Contents
Offers p.157
Platform p.153
148 CHAMBERS.COM
JAPAN Law and Practice
Contributed by: Akira Inoue and Hiroaki Nagahashi, Baker McKenzie (Gaikokuho Joint Enterprise)
1. Legal Framework and 1.2 Enforcement and Regulatory

Regulatory Bodies Authorities
The Consumer Affairs Agency (CAA) is the
1.1 Primary Laws and Regulation national regulator enforcing the AUPMR. If
In Japan, advertising practices are primarily reg- someone contravenes the provisions of the
ulated under the Act against Unjustifiable Premi- AUPMR on either the misleading representation
ums and Misleading Representations (AUPMR), or the unjustifiable amount of premium, the CAA
which is now classified as consumer protection can issue a cease-and-desist order requiring the
law but was originally a special law of the Anti- violator to:
monopoly Act.
• cease committing the breach;
In addition to setting certain limitations on pro- • take measures necessary to prevent its recur-
viding premiums (as discussed in 7.1 Sweep- rence; and
stakes and Contests), the AUPMR also pro- • take any other necessary measures, including
hibits false labelling, deceptive advertising and public notification specifying the implementa-
misleading representations with the capacity to tion of said measures.
mislead consumers into believing that the nature
(that is, the quality or manufacturing standards) In addition, for an infringement of the AUPMR on
and/or trade terms (price or quantity) of a prod- misleading representation, the regulator can also
uct or service are substantially better than they order the violator to pay the National Treasury a
are in reality or than those of competitors’ prod- surcharge equivalent to 3% of the proceeds from
ucts. its sales of goods or services transacted during
the period when the alleged misrepresentations
Claiming that a product is superior to the equiva- were committed (“surcharge payment order”).
lent one of a competitor’s is permitted as long as
the statement is truthful, while a false statement If the alleged conduct would only affect the mar-
of superiority is unlawful under the AUPMR. ket of a particular prefecture, the local govern-
ment of that prefecture can investigate the case.
The second relevant regulation for advertising While the local government can, like the CAA,
practices is the Unfair Competition Prevention issue a cease-and-desist order, it has no author-
Act, which prohibits several specific types of ity to issue a surcharge payment order.
unfair competitive practices, for example:
1.3 Liability for Deceptive Advertising
• causing goods or services to be confused Both cease-and-desist orders and surcharge
with those of another party; payment orders are issued against the business
• using an indication in connection with goods operator who committed the alleged mislead-
or services that is identical or similar to a ing advertising, rather than any individual who
famous indication of another party; and belongs to the corporation involved.
• misleading consumers about the quality of
goods or services. 1.4 Self-Regulatory Authorities
The Japan Advertising Review Organisation
(JARO) is not a governmental authority but
149 CHAMBERS.COM
a private organisation established in 1974 to their products, not only traditional health foods
achieve appropriate standards for advertising such as nutritional supplements but also general
and representation. The JARO provides advice foods made from healthy ingredients.
to its member companies on how their proposed
advertising can be improved so as not to be In response to this trend, the CAA has focused
misleading to consumers and, when it receives its investigations against misleading advertising
complaint about any advertising, examines the of food products with “good for health”-type
complained-about advert and issues recommen- claims that may mislead consumers as to the
dation to revise it if it is found to be misleading. real benefits (if any) of the products.
1.5 Private Right of Action for 1.7 COVID-19, Regulation & Enforcement
Consumers Since the COVD-19 pandemic, the CAA has
If there is misleading representation prohibited vigorously investigated misleading advertising
under the AUPMR or the threat of it, the “quali- of health foods, health appliances or sterilisa-
fied consumer organisation” designated under tion sprays claiming a preventive effect on the
the Consumer Contract Act is entitled to file for transmission of the virus on suspicion of viola-
an injunction with a court to get the defendant tion under the AUPMR.
to stop making such representation.
The CAA has not published any regulation spe-
Consumers themselves cannot directly file the cific to the advertising of claims that a product
action, but can provide information on the sus- prevents or lessens the effects of COVID-19, but
pected misrepresentation to the qualified con- on 19 February 2021, it announced that, con-
sumer organisation, followed by the organisa- sidering the nature and characteristic features
tion sending to the prospective defendant a of COVID-19 were still not fully understood, any
written advance notice providing a summary of product claiming a preventive effect on COV-
the claim, the essential points of the dispute, ID-19 was likely to be misleading to consumers
and other particulars specified by Cabinet Office and 45 businesses received the CAA’s call for
Order. improvement of their advertising in this regard.
The action may not be filed until after one week 1.8 Politics, Regulation and Enforcement
has passed from the time that the written notice On 7 June 2022, the Basic Policy on Economic
has been received; provided, however, that this and Fiscal Management and Reform 2022 was
does not apply if the prospective defendant endorsed by the Japanese Prime Minister Fumio
refuses to accept the claim for injunction. Kishida and his cabinet. The policy included
development of institutions to prevent digital
1.6 Regulatory and Legal Trends advertising that misled consumers as to the
Due to the COVID-19 pandemic and the pro- quality of the goods or services. To that end,
longed work-from-home situation, there has the CAA established a panel of experts to dis-
been an increase in health-related advertising cuss possible legal issues arising from stealth
and demand for health foods in the Japanese marketing and plans to publish a comprehensive
market, and the increasing number of food man- report on the outcome of the discussion by the
ufacturers have been making health claim for end of 2022.
150 CHAMBERS.COM
2. Advertising Claims Under the CAA’s guideline concerning substan-

tiation of advertising, the advertised claim must
2.1 Deceptive or Misleading Claims be substantiated by objectively proven methods
Whether advertising claims are misleading is (as explained in 2.4 Testing to Support Advertis-
determined based on how general consumers ing Claims) and the outcome of the substantia-
would be affected by the advertising. To find tion is required to properly correspond to the
the impression of general consumers, the CAA advertised claim.
considers the entire content of an advert, rather
than an individual sentence, chart or picture 2.4 Testing to Support Advertising
contained therein, as the basis of judgement. Claims
As stated in 2.3 Substantiation of Advertising
Moreover, the CAA has recently tended to use Claims, in order for the testing to sufficiently sup-
marketing research or surveys on what impres- port advertising claims, it must be done by an
sion consumers have received from an advertis- “objectively proven method”, which is required
ing claim in order to identify the impressions of to be either of the following:
general consumers.
• research or experiments based on generally
2.2 Regulation of Advertising Claims recognised methods in the relevant section
In Japan, all advertising claims are subject to of academia or industry, or approved by most
the AUPMR, except for some advertising meth- experts in the relevant field; or
ods that do not claim any specific benefits of • generally recognised professional opinion or
a product or would not give an impression of academic literature where an expert in the
any such benefits. Such adverts are known as relevant field objectively assesses the claimed
image advertisements or “puffery”, which aims benefit in the advertising.
at improving the abstract image of products
such as name recognition or popularity. 2.5 Human Clinical Studies
Human clinical studies are not necessarily
2.3 Substantiation of Advertising Claims required for substantiation. However, as stated
Under the AUPMR and its related regulation, in 2.3 Substantiation of Advertising Claims,
when any advertising is suspected of misleading the outcome of the substantiation must prop-
customers as to the quality of a product or ser- erly correspond to the advertised claim. Thus, if
vice, the CAA or local government is entitled to general consumers would be given the impres-
give a seller or provider of the advertised prod- sion, on the basis of the advertised claim, that
uct or service a notice requiring the recipient to the claimed benefit to the human body had been
submit sufficient substantiation of the advertis- proven, it would require human clinical studies
ing within 15 days after the receipt of the notice. to substantiate the claimed benefit.
Upon a failure to provide the required substan-
tiation, including where submitted documents 2.6 Representation and Stereotypes in
are not considered to be sufficient substantiation Advertising
by the CAA, the advertising shall be deemed as In Japan, there are no special laws or regula-
a misrepresentation in violation of the AUPMR. tions that address stereotyping in advertising or
issues of inclusion, diversity and equity.
151 CHAMBERS.COM
2.7 Environmental Claims (b) the name or trademark of a business op-

So far, there are no special laws or regulations erator or designer of any other nation; or
that apply to environmental claims in advertise- (c) Japanese language that accounts for all
ments or “greenwashing” in Japan. However, or the majority of letters in the representa-
the AUPMR prohibits deceptive advertising tion.
or misleading representations that would mis-
lead consumers as to the nature of product or
service. As such, it is possible that conveying 3. Comparative Advertising
misleading information about the environmental
impact of a product would constitute a violation 3.1 Specific Rules or Restrictions
of the AUPMR, so long as general consumers The CAA has published its guidelines concern-
would be given the impression, by the advertised ing comparative advertising claims, where spe-
claim, that the environmentally friendly nature of cific examples of claims that would fall within
a product was being claimed as a benefit of that misrepresentation in violation of the AUPMR are
product. given, as stated in 3.2 Comparative Advertising
Standards.
2.8 Other Regulated Claims
There is a government pronouncement that pro- Moreover, comparative advertising claims may
vides special rules for claims concerning country constitute violation of the Unfair Competi-
of origin. The pronouncement specifies the fol- tion Prevention Act when they are found to be
lowing examples that would fall within misrep- misleading representations about the quality
resentation in violation of the AUPMR when it of goods or services, or false advertising that
would make it difficult for the general customers causes damage to a competitor’s credit.
to recognise a product’s real country of origin.
• A representation on a product made in Japan Under the CAA’s guideline concerning compar-
that consists of: ative advertising claims, in order for the claim
(a) the name of any foreign nation or any not to constitute violation of the AUPMR, it is
place in foreign nation, foreign national required to meet the following standards:
flag or national emblem, or something
similar to them; • the claim must have been substantiated
(b) the name or trademark of a foreign busi- through an objective method;
ness operator or designer; or • the substantiated number or fact must be
(c) foreign language that accounts for all or accurately cited in the advertising; and
the majority of the letters in the represen- • the method of comparison must be fair.
tation.
• A representation on a product made in a for- 3.3 Challenging Comparative Claims
eign nation that consists of: Made by Competitors
(a) the name of any other nation or any place Any business operator who has suffered from
in other nation, national flag or national damage caused by comparative claims made by
emblem of any other nation, or something competitors can file action with the courts under
similar to them; the Unfair Competition Prevention Act seeking
152 CHAMBERS.COM
damages, an injunction for the cessation of the tising, it could be construed as a violation of the
advertising and the publication of an apology. AUPMR for a seller or provider of an advertised
product or service to instruct the owner of a rat-
ing site to manipulate the rating of its product or
4. Social/Digital Media service as that would lead to consumers being
misled into believing that the quality of the prod-
4.1 Special Rules Applicable to Social uct or service was better than it was in reality. As
Media in this example, if the advertiser is found to have
There are no special rules or regulations that indirectly committed to making the advertising,
apply to advertising on social media in Japan. it could be construed that the advertising has
been made by the advertiser in violation of the
4.2 Key Legal Challenges AUPMR.
While there are not yet any specific rules for
advertising on social media in Japan, this kind 4.4 Disclosure Requirements
of advertising is also subject to regulation under In Japan, there is no specific rule on media dis-
the AUPMR as with any other form of adver- closure requirements for social media ads.
tising. Furthermore, as stated in 1.8 Politics,
Regulation and Enforcement, the Japanese 4.5 Requirements for Use of Social
government has recently focused on develop- Media Platform
ing institutions to prevent digital advertising that So far, there are no special rules or regulations
could mislead consumers as to the quality of the that apply to the use of social media platforms
goods or services advertised. For example, by in Japan.
the end of 2022, the CAA plans to publish a com-
prehensive report on possible legal issues aris- 4.6 Special Rules for Native Advertising
ing from stealth marketing, which can be made So far, there are no special rules that apply to
thorough social networking services. As such, it “native advertising” (ie, advertising that has
is likely that the CAA will vigorously investigate the look and feel of editorial content). While
misleading advertising on social media in the the AUPMR prohibits deceptive advertising or
near future. misleading representations that would mislead
consumers as to the nature of product or ser-
4.3 Liability for Third-Party Content vice, it is unlikely that native advertising would
The AUPMR regulates sellers or providers of an constitute a violation of the AUPMR just because
advertised product or service who have, directly it pretends to be editorial content, unless it mis-
or indirectly, committed misrepresentation of the leads consumers into believing that the adver-
product or service. Therefore, whether there is tised product or service was substantially better
liability for the advertiser for content posted by than it was in reality.
others on the advertiser’s site or social media
channels depends on how the advertiser is 4.7 Misinformation
involved in making the advertising. In Japan, there is no special law that specifi-
cally covers misinformation on topics of public
Taking stealth marketing as an example, under importance.
the CAA’s guidelines concerning internet adver-
153 CHAMBERS.COM
5. Social Media Influencer 5.4 Misleading/Fake Reviews

Campaigns and Online Reviews As stated in 4.3 Liability for Third-Party Content
and 5.4 Misleading/Fake Reviews, manipulating
5.1 Trends in the Use of Influencer a rating or review of a product or service through
Campaigns any other people could constitute a misleading
With the growth of social networking services representation by the product or service provider
(SNS), it is reported that an increasing number in violation of the AUPMR.
of companies are using influencer campaigns
through SNS to market their products or ser- As also addressed in 1.8 Politics, Regulation
vices. Recently, Japan has seen a number of and Enforcement, the CAA has established a
famous YouTubers being used to promote prod- panel of experts to discuss possible legal issues
ucts or services. arising from stealth marketing and plans to pub-
lish a comprehensive report on the outcome of
5.2 Special Rules/Regulations on the discussion by the end of 2022. Following
Influencer Campaigns this, it is likely that more specific rules on “fake
While there is no specific rule for the use of influ- reviews” will be established.
encer campaigns in Japan, they are also sub-
ject to regulation under the AUPMR as with any
other way of advertising. For advertiser’s liability, 6. Privacy and Advertising
please see 5.3 Advertiser Liability for Influencer
Content. 6.1 Email Marketing
Under the Specified Commercial Transaction
5.3 Advertiser Liability for Influencer Act, it is prohibited to send email advertising for
Content mail-order sales to customers unless each cus-
As stated in 4.3 Liability for Third-Party Con- tomer requests the email or consents to receiv-
tent, if a seller or provider of an advertised prod- ing the email in advance.
uct or service instructs owner of a rating site to
manipulate the rating of its product or service 6.2 Telemarketing
such that consumers are misled into believing Under the Specified Commercial Transaction
that the quality of the product or service is better Act, it is required for a telemarketing operator
than it is in reality, this could constitute violation to disclose in advance the name of the com-
of the AUPMR. pany and the individual who is calling, the type
of product or service to be sold, and that the
The same would apply where an influencer is purpose of the call is to solicit for engaging
instructed by a seller or provider of the adver- agreement. Upon receipt of an offer from, or the
tised product or service to give an endorsement completion of agreement with, a customer, the
of the product or service to the public with false operator is also required to provide notice to the
or misleading information. In this case, the seller customer specifying the type of product or ser-
or provider of the product or service could be vice to be sold, its price, payment term, etc.
construed as the advertiser and the provider of
the false or misleading information and therefore
be liable for the same under the AUPMR.
154 CHAMBERS.COM
6.3 Text Messaging 7. Sweepstakes and Other

While there is not a specific rule applicable to Consumer Promotions
text messaging, the same rules as discussed in
6.1.Email Marketing apply. 7.1 Sweepstakes and Contests
In general, selling lottery tickets is permissible
6.4 Targeted/Interest-Based Advertising only for local authorities under the Public Lot-
Under the Private Information Protection Law, tery Tickets Act in Japan. Lotteries are usually
when an advertiser gets a customer’s personal defined as games of luck where participation is
information in the course of targeted or inter- subject to payment of a financial contribution
est-based advertising, it is generally required to by the participant. For private firms or individu-
notify the customer of the purposes for which als, selling lottery tickets constitutes a criminal
that information will be used, and when the infor- offence punishable with a prison sentence of up
mation is to be transferred to a third party, it is to two years or a fine of up to JPY1.5 million
also required in general to obtain consent from under the Japanese penal code.
the customer in advance.
In contrast to lotteries where premiums are pro-
Moreover, since the latest amendment of the vided in exchange for financial considerations,
Private Information Protection Law, which came providing premiums associated with sales of
into force in April 2022, cookie data, IP address products or services for inducing customers to
data and web-browsing history data are also purchase the products or services is not prohib-
subject to protection under the law. In other ited so long as the value of offered prize does
words, even if this information has insufficient not exceed a certain limit. The AUPMR stipu-
connection to an individual customer to consti- lates this limit separately for two different types
tute personal information, it could still be proof premium offers:
tected as “related personal information.” As a
result, if, after being transferred in the process • prize competitions (PCs), which are defined
of targeted/interest-based advertising, the infor- under the relevant government notice as
mation could be treated as personal data by providing premiums in a way of determining
its recipient, it is required for the advertiser to winners by chance (generally called a prize
obtain explicit consent from the customer about draw) or through superiority or correctness
transfer of the information. in a particular performance (generally recog-
nised as a prize competition); and
6.5 Marketing to Children • premium offers to general consumers
In Japan, there are no mandatory rules appli- (POGCs), which are defined as providing
cable to marketing to children. However, some premiums by any other means than PCs, a
industries have self-regulatory standards for the typical example of which is providing premi-
purpose of protecting the rights of children. For ums to every customer who visits a store.
example, the Japan Commercial Broadcasters
Association has a broadcasting standard provid- The AUPMR prohibits business operators from
ing that commercials shall not unduly instigate providing premiums associated with their selling
children’s desire for gains or to buy. products or providing services by way of a PC
155 CHAMBERS.COM
if the value of prize to be provided to the winner 7.2 Contests of Skill and Games of
exceeds the following limits. Chance
Japanese law does not distinguish between
• Maximum value – the maximum amount of contests of skill and games of chance. Both of
the premium to be provided to each winner them are categorised into the PC as provided in
must not exceed: 7.1 Sweepstakes and Contests.
(a) for regular prize competitions run by a
single business operator, 20 times the unit 7.3 Registration and Approval
price of the relevant product or service Requirements
where the unit price is less than JPY5,000 It is not required in Japan to pursue registration
or JPY100,000 where the unit price is or obtain approval for implementing the games
JPY5,000 or higher; and of chance or contests of skill.
(b) for prize competitions jointly oper-
ated by several business operators, the 7.4 Loyalty Programmes
maximum amount of the premium to be While there is not a special rule that applies to
provided to each winner must not exceed loyalty programmes in Japan, they are subject to
JPY300,000. regulation around providing premiums as stated
• Total value – the maximum total premium in 7.1 Sweepstakes and Contests, if applicable.
permitted for:
(a) regular prize competitions is 2% of the 7.5 Free and Reduced-Price Offers
estimated sales amount of the relevant Discounting the price of products or services will
products or services associated with the not constitute a provision of premiums under the
premium to be sold while the premium AUPMR and is therefore free from the limitation
campaign is undertaken; and on value of premium.
(b) joint prize competitions is 3% of the
estimated sales amount of the relevant The use of free offers is generally allowed. It is
products or services. common for customers who purchase a certain
product to be given a coupon which entitles them
The AUPMR sets separate limitations on the to an extra one free or a discount. In this case,
maximum amount of the premium to be provided as long as the product to be provided through
to each customer in a POGC, which is JPY200 the use of the coupon is virtually identical to the
(when the unit price is less than JPY1,000) or product originally sold to the customer, it will not
20% of the unit price (when the unit price is be a “premium” regulated under the AUPMR.
JPY1,000 or higher).
On the other hand, providing a coupon in cross-
Apart from the general rules set out above, the couponing (where customers who purchased
government notice provides special standards product A are given a coupon which entitles the
on provision of premiums in certain industries customer to a free offer or discount of a differ-
(that is, newspapers, magazines, real estate, ent product B) can be construed as “providing
medicines and medical devices). a premium” under the AUPMR and therefore be
subject to the limitations set out in 7.1 Sweep-
stakes and Contests.
156 CHAMBERS.COM
In value promotion, the price display must not Japanese Penal Code unless otherwise permit-
be misleading under the AUPMR. ted under each special act. For example, as dis-
cussed in 7.1 Sweepstakes and Contests, sell-
Further, if the price of a product goes below the ing lotteries in general are permissible only for
cost attributable to manufacturing and selling local authorities under the Public Lottery Tickets
the product, and where this may make it diffi- Act. It is also permissible for the National Agency
cult for competitors to continue businesses in for the Advancement of Sports and Health to sell
the relevant market, that pricing can violate the sports lottery tickets under the Sports Promotion
Antimonopoly Act as unfair price-cutting. Lottery Law.
7.6 Automatic Renewal/Continuous 8.2 Special Rules & Regulations

Service Offers As discussed in 8.1 Legality & General Regu-
Under the Consumer Contract Act, the auto- latory Framework, selling sports lottery tickets
matic renewal or continuous service offers under is permissible only for the National Agency for
which a marketer can continue to ship and bill the Advancement of Sports and Health under
for products and services on a recurring basis the Sports Promotion Lottery Law. Other than
until the consumer cancels could be unlawful if that, there are no special rules or regulation that
the automatic recurrence would unilaterally harm apply to the advertising and marketing of sports
the interest of a consumer. betting.
Normally, the automatic recurrence benefits a

customer by saving steps to renew contract so 9. Web 3.0
long as the terms of a contract do not change, so
in that case, a contract with automatic renewal 9.1 Cryptocurrency and Non-fungible
clause would be valid. Tokens (NFTs)
Depending on its nature, cryptocurrency or
However, in cases where the terms of a contract NFTs could fall within the regulatory scope of
changes with automatic renewal in a way that securities or crypto-assets under the Financial
harms the interest of the consumer, for exam- Instruments and Exchange Act. If that is the
ple, shifting from a charge-free to an onerous case, advertising, marketing or sale of crypto-
contract, that may be invalid unless the busi- currency or NFTs are strictly regulated under the
ness operator provides the customer with a suf- same law, for example, requiring registration as a
ficient explanation on the change of condition financial instruments business or a crypto-asset
in advance. exchange service.
9.2 Metaverse
8. Sports Betting/Gambling While there is not specific rule applicable to
advertising within the metaverse so far, it is also
8.1 Legality & General Regulatory subject to the AUPMR.
Framework
In Japan, any form of gambling is generally
prohibited and criminally sanctioned under the
157 CHAMBERS.COM
9.3 Digital Platforms 10.2 Other Products

Since March 2021 when the Act on Transpar- Apart from regulated products, there are specific
ency of Transaction through Digital Platforms rules that apply to the advertisement of certain
was enforced, the Ministry of Economy, Trade categories of product in Japan.
and Industry has designated several online mall
operators, app store operators and major digi- Taking foods as an example, the Pharmaceutical
tal platform operators as targets of restriction Affairs Act also prohibits manufacturers or sell-
under the Act. These digital platformers have ers of health foods from claiming medical effi-
been required to disclose terms and conditions, cacy in advertising their food products. It is also
establish systems for enhancing transparency of prohibited for food companies to make health
transactions and regularly report to the Ministry claims on food products that are considered to
on measures taken. be exaggerated and false under the Health Pro-
motion Act.
10. Product Compliance

In Japan, apart from the AUPMR, there are some
rules or restrictions that apply to the advertising
of regulated products.
For example, as to drugs and medical devices,

it is prohibited under the Pharmaceutical Affairs
Act to publish exaggerated and false claims
regarding products or advertise the products
before obtaining approval.
158 CHAMBERS.COM
Baker McKenzie (Gaikokuho Joint Enterprise) include not only Japanese lawyers, registered
is the largest foreign law joint enterprise in Ja- foreign lawyers and foreign-qualified lawyers,
pan and one of its leading international law but also certified public accountants, tax attor-
firms. Established in 1972, it is also one of its neys, patent attorneys, judicial scriveners, ad-
oldest. As a member firm of Baker McKenzie, it ministrative scriveners and economists able to
provides comprehensive, specialised legal ser- deploy the most innovative, standard-setting le-
vices related to domestic and international fi- gal solutions to a full range of issues. With over
nance, M&A, general corporate, antitrust, major 6,000 lawyers across 77 offices in 46 countries
projects, intellectual property, international tax, globally, the firm has a peerless ability to pro-
litigation and arbitration, labour, environmental, vide clients with seamless cross-border legal
pharmaceutical and real estate matters. The and consulting services.
Tokyo office’s approximately 150 professionals
Authors
Akira Inoue is a partner in Baker Hiroaki Nagahashi is a senior
McKenzie’s Tokyo office, and associate in Baker McKenzie’s
has been handling cross-border Tokyo office and has been
antitrust cases for more than 20 handling cross-border antitrust
years. Most recently, he and competition cases,
successfully secured especially focusing on defence
compliance credit for only the second time in in regulator’s investigations and follow-on
the history of US antitrust practice and won a litigation. He is also an expert on advertising,
40% criminal fine reduction. He is further marketing and labelling regulations such as the
distinguished as the sole member of the Misrepresentation Prevention Act and Food
steering committee of Cartel Task Force at Labelling Act. In particular, Mr Nagahashi, who
Baker McKenzie from the Asia Pacific region. is the only qualified Japanese lawyer who also
He has published widely on antitrust and has a licence as a Food Labelling Consultant,
competition law. Dr Inoue has been recognised provides legal advice to clients in the food
as a “Leading Individual” by Chambers Asia- industry on advertising, marketing and labelling
Pacific (2010–2022). issues. He has published a number of articles
on antitrust and competition law and
advertising and food labelling regulations.
159 CHAMBERS.COM
Baker McKenzie (Gaikokuho Joint

Enterprise)
Ark Hills Sengokuyama Mori Tower 28F
1-9-10 Roppongi, Minato-ku
Tokyo 106-0032
Japan
Tel: +81 3 6271 9900

Fax: +81 3 5549 7736
Email: Yu.Sakakibara@bakermckenzie.com
Web: www.bakermckenzie.co.jp/
160 CHAMBERS.COM
JAPAN Trends and Developments

Contributed by:
Chie Kasahara and Gai Matsushita
Atsumi & Sakai see p.165
Introduction cessing business operator (data controller) is

In Japan, information/data about individuals is required to obtain prior consent from a data
regulated by the Act on Protection of Personal subject when personal data is to be transferred
Information (APPI), which was amended in June to any third party. Furthermore, the transferring
2020, with the amendments coming into effect party must make a record of the transfer; and
on 1 April 2022. This article outlines the use of the transferred/receiving party must confirm the
personal information in the advertising industry background of the acquisition of the relevant
in Japan and explains the practical influences of personal data and make a record of transfer.
the amendment of the APPI on the use of per-
sonal information in the advertising industry. In this respect, it is important to know whether an
online identifier in question amounts to “person-
Use of Personal Information in the al data”, to which the third-party transfer regula-
Advertising Industry in Japan tions apply. Personal data is personal informa-
Recently, there has been a growing trend tion which constitutes a “personal information
towards utilising individuals’ data for market- database and the like”. If personal information
ing and other business activities in Japan; for is used in a database which is systematically
example, Data Management Platforms (DMPs), organised in such a way that specific personal
which collect, store, and analyse data on internet information can be retrieved using a computer
users, have become popular. Typically, a DMP or similar means, then such personal information
provider places tags on a company’s website usually constitutes personal data.
and provides the company with data on visitors
identified by online identifiers such as cookies The APPI defines “personal information” as
and web beacons; the company then uses the information that falls into one of the following
data for various purposes, such as advertising categories.
and Customer Relation Management (CRM). The
other often seen use is targeted advertising, in • Information that can be used to identify a
which the client company sends advertising specific individual due to its inclusion of a
identifiers such as Apple’s Identifier for Advertis- name, date of birth, or another description
ers (IFDA) or GoogleAdvertisingID to a DMP pro- contained in such information (this includes
vider, and the DMP provider then cross-matches any information that can be cross-checked
the advertising identifiers with the data it owns against other information and thereby used to
to select the target IDs to which they will show identify that specific individual).
the advertisement. • Information which contains personal identi-
fication codes. Personal identification codes
In such transactions, the third-party transfer are codes designated by government ordi-
regulations under the APPI are often an issue. nance or written on a card or other docu-
Under the APPI, a personal information pro- ment that is converted from some feature
161 CHAMBERS.COM
Contributed by: Chie Kasahara and Gai Matsushita, Atsumi & Sakai
of the body for use in computers, such as • using schemes such as delegation of pro-
fingerprints, DNA, facial skeletal structure, or cessing and comprehensive succession,
a code assigned to each subject for use of including merger or joint use; and
services or purchase of goods that includes • applying other exceptions explained in
physical characteristic data, for example “my guidelines issued by the personal information
number” (individual number), social security Protection Commission (PPC) (the primary
numbers and passport or driver’s licence regulator under the APPI).
number.
Amendment of the APPI
In general, an online identifier by itself does In Japan, when a company transfers online
not identify a specific individual and does not identifiers to DMP providers, two schemes have
constitute personal data to which the third- often been used in practice.
party transfer regulation applies. Nonetheless,
if it can be combined with other information by • transferring of online identifiers as non-per-
which an individual may be identified (eg, an sonal data; and
email address containing an individual’s name) • transfer of online identifiers in relation to
to make it possible to identify an individual, it can delegation to a data processor – however,
constitute personal information and therefore the amended APPI and the revised guidelines
personal data to which the third-party transfer and QA issued by the PPC impose significant
regulations apply. restrictions on the use of online identifiers in
Japan, requiring changes to these schemes
However, when using personal data accumulated for advertisements using online identifiers.
in the past, it may be difficult to obtain consent
from the relevant data subject, especially when First, regarding transferring of online identifi-
a large volume of data is involved. In addition, ers as non-personal data, it may be necessary
to comply with the requirement to record trans- to understand the means of deciding whether
fers as explained above, it is sometimes neces- data being transferred amounts to personal
sary to make adjustments to relevant systems data. For example, the question is whether data
to automatically make logs, which will result in that is capable of being used by the transferor
increased costs. Therefore, except where these to identify a specific individual but the recipient
obligations can be fulfilled without practical dif- is not capable of using the data to identify any
ficulties, data controllers usually structure a data individual constitutes third-party transfer of per-
processing scheme so that third party transfer sonal data. In this regard, the PPC has adopted
regulations do not apply in full or in some cases, the “transfer-based theory” that the third-party
such as: transfer regulation is only applicable to data in
which specific individuals can be identified by
• transfer of only non-personal data, including the transferor. Under this theory, even when the
anonymised processed data; recipient can identify a specific individual from
• application of limited exceptions to third- transferred data, such transfer is not subject to
party transfer restrictions when a transfer is the third-party transfer regulations as long as the
based on specific law and regulations, such transferor cannot identify the specific individual.
as public need;
162 CHAMBERS.COM
Therefore, in order to avoid the application of the when providing personal information to a third
third-party transfer regulations, a scheme has party located in a foreign country, it is necessary
often been used under which the transferor pro- that information on the system concerning the
vided the recipient with an identifier, such as a protection of personal information in the foreign
cookie, that cannot identify a specific individual country and the measures taken by the third
but the recipient then identified the individual party to protect personal information, as well as
by matching the cookies with the data it owns any other information that would be helpful to
to use it as personal data. However, under this the individual concerned, are provided to that
scheme, the recipient is still utilising personal individual in advance when obtaining consent.
data by using the data provided by the trans-
feror, and there was concern that this scheme Therefore, due to the amendment of the APPI, it
inappropriately exempts the recipient from the is no longer possible to use a scheme in which
third-party transfer regulations. a transferor transfers an online identifier that
does not constitute personal information in and
Person-related information of itself but the recipient (DMPs provider) pro-
To deal with such concern, under the amended cesses it as personal data.
APPI, the new concept of “person-related infor-
mation” was established, and restrictions were However, it should be noted that the fact that
imposed on the handling of online identifiers. data received by the recipient becomes personal
Person-related information refers to “information data and the fact that the data is “assumed to
about living individuals that does not fall under be acquired as personal data” are not necessar-
any of the categories of personal information, ily synonymous. In other words, as mentioned
pseudonymised information, and anonymised above, under the APPI, data treated as personal
information”. A typical example is an online iden- data includes:
tifier, such as a cookie, which cannot identify a
specific individual by itself. However, it should • data which itself can identify a specific indi-
be noted that if the online identifier is stored in vidual; or
a form that can be easily matched with other • data that can be easily matched with other
personally identifiable information, the online data to identify a specific individual.
identifier comprises personal information, and
thus does not fall within the definition of person- Obtaining consent
related information. On the other hand, the wording “is expected
to be acquired as personal data” only looks at
When a transferor intends to provide person- whether the data itself can identify a specific
related information to a third party, the transferor individual, but not whether it can be matched
is obliged to confirm that the recipient has the with other information to do so. In other words,
consent of the individual to allow the provision even if a recipient receives an online identi-
of the person-related information to be acquired fier which does not have personal identifiability
as personal data if the recipient “is expected to by itself, but the online identifier can be easily
acquire the information as personal data”, ie, by matched with other personal information, such
mixing that person-related information with data as a cookie, this is personal information but is
it owns to constitute personal data. In addition, not “assumed to be acquired as personal data”
163 CHAMBERS.COM
if the online identifier is not matched with other Conclusion

personal information. Therefore, in practice, it This article outlines the practical influence of
must be noted that consent is not always nec- the amendment of the APPI on the use of per-
essary even when such data may be handled as sonal information in the advertising industry.
personal information by the recipient, and the The handling of personal information is a highly
transferor should always consider how the data specialised field of law in Japan which requires
will be handled by the recipient before conclud- not only an understanding of law, but also an
ing that it is necessary to obtain consent. understanding of the relevant guidelines, public
comments and technologies involved, and the
Second, for the transfer of online identifiers in data processing scheme suitable for any cir-
relation to the delegation of data processing, cumstances could vary depending on the busi-
PPC guidelines revised in accordance with the ness conducted in Japan. It is therefore strongly
amendment of the APPI clearly state that the advisable to consult with local counsel if there
processor is not permitted to cross-match the is any uncertainty over the handling of personal
personal data or person-related information information.
with data it receives from the transferor for the
purpose of processing. Therefore, it is no longer
possible in practice to carry out a scheme under
which a client company sends advertising identi-
fiers such as the IFDA or GoogleAdvertisingID
to a DMP provider and the DMP provider cross-
matches such advertising identifiers with the
data it owns to select the target IDs to which
they will show the advertisement. To deal with
the change in circumstances, it is becoming
common to obtain prior consent from data sub-
jects when collecting data, not only in relation to
third-party transfers of personal data but also to
third-party transfers of person-related informa-
tion.
164 CHAMBERS.COM
Atsumi & Sakai is a full-service Tokyo-based London, and Frankfurt. Its media lawyers com-
law firm. It operates as a foreign law joint ven- bine in-depth knowledge of the media and ad-
ture, which enables it to admit foreign lawyers vertising industries with a leading international
as partners and offer its clients a combination law firm’s deal flow and deal size. The firm also
of Japanese expertise and real international ex- handles cross-border and domestic data pro-
perience, all with the quality of service that the tection and data loss matters on a weekly basis
modern international business community de- with a highly experienced team of expert Japa-
mands. The firm provides services around the nese lawyers and foreign lawyers familiar with
clock through its offices in Tokyo, New York, the nuances of Japanese data protection law.
Authors
Chie Kasahara is a partner at Gai Matsushita is a partner at
Atsumi & Sakai. She has over 20 Atsumi & Sakai. He has some 12
years’ experience acting for a years’ experience advising on
wide range of Japanese and intellectual property, information
international clients in the technology, dispute resolution,
technology, media/entertainment and data protection and
and life sciences sectors. Chie heads the firm’s cybersecurity. He heads the firm’s IT/TMT team
IP team and serves as a sub-manager of the and serves as a sub-manager of the IP team.
IT/TMT team and the Life Sciences team. She Gai handles a wide variety of IP-related
is highly experienced in IP protection as well as disputes including IP infringement litigation
regulatory/compliance matters. She also and trials, as well as non-contentious matters,
advises her clients on advertising and including drafting and reviewing IP-related
marketing, brand protection, data protection, agreements. He also advises on cutting-edge
privacy and cybersecurity. She serves as a technological matters involving AI, IoT and
regional vice president for the Asia Pacific data, including data privacy. Gai also assisted
region of the Global Advertising Lawyers with drafting “Contract Guidelines on
Association (GALA). Utilization of AI and Data”, Japan’s first
comprehensive guideline on AI and data-
related contracts published by Japan’s Ministry
of Economy, Trade and Industry in June 2018.
165 CHAMBERS.COM
Atsumi & Sakai

Fukoku Seimei Bldg.
2-2-2 Uchisaiwaicho
Chiyoda-ku
Tokyo 100-0011
Japan
Tel: +81 (0)3 5501 2111

Fax: +81 (0)3 5501 2211
Email: chie.kasahara@aplaw.jp
Web: www.aplawjapan.com/en
166 CHAMBERS.COM
MEXICO
USA
Law and Practice

Mexico
Contributed by:
Adrián Martínez, Sebastian Weinberg Garcia, José Mexico City
Antonio Arochi and Pamela Gisholt

Arochi & Lindner see p.180 Guatemala
Contents
Offers p.177
Platform p.174
167 CHAMBERS.COM
MEXICO Law and Practice
Contributed by: Adrián Martínez, Sebastian Weinberg Garcia, José Antonio Arochi and Pamela Gisholt,
Arochi & Lindner
1. Legal Framework and economic/industrial perspective; procedures

Regulatory Bodies are of an administrative nature.
• The Mexican FDA (COFEPRIS): in charge of
1.1 Primary Laws and Regulation regulating and protecting the population from
In the past year, Mexico has seen the introduc- health risks – all products that somehow are
tion of two important new regulations regarding related to sanitary and health fields are a mat-
advertising: the Law on Transparency, Preven- ter of interest for this entity so as to ensure
tion and Combat of Improper Practices in Adver- safety, efficacy and security to humans; pro-
tising Contracting; and the Outdoors Advertising cedures are of an administrative nature.
Law of Mexico City. However, there are many • The Attorney General’s Office (FGR): in charge
other pieces of legislation which may encom- of investigating and prosecuting crimes of
pass advertising and marketing, such as: federal level.
• The Federal Civil Tribunals: in charge of dis-
• the Federal Consumer Protection Law; putes and litigations of a civil and commercial
• the General Health Law; nature.
• the Industrial Property and Copyrights Law; • The Federal Institute for Access to Public
• the Civil Code; Information and Data Protection (INAI): in
• the Criminal Code; charge of data protection procedures and
• the Mexican Data Protection Act; complaints – it regulates the relationship
• the Mexican Norm for e-commerce NMX- between data holders and those that manage
COE-001-SCFI-2018; and such data; procedures are of an administra-
• the rules for advertising derived from the tive nature.
Health Act. • The Federal Economic Competition Com-
mission (COFECE): in charge of applying
1.2 Enforcement and Regulatory and executing the Law for the Transparency,
Authorities Prevention and Combat of Improper Practices
With its recent laws, the Mexican jurisdiction in Advertising Contracting (LCMP).
added authorities that help to oversee advertis- • The Federal Telecommunications Institute
ing and marketing practices. Depending on the (IFT): in charge of regulating and supervising
case, lawyers have to encompass the same with compliance with the provisions set forth in
a specific authority. Below is a list of the regula- the Federal Telecommunications and Broad-
tors that could deal with cases related to adver- casting Law (LFTR) – the IFT will monitor and
tising and marketing issues in Mexico. sanction media owners who do not respect
the maximum time established for advertising
• The Consumer Protection Agency (PRO- and holds powers of surveillance regarding
FECO): in charge of regulating B2C schemes the rights of public audiences.
and arbitrating between consumers and • The Ministry of Interior: in charge of authoris-
product/service providers; procedures are of ing and supervising the promotion of gam-
an administrative nature. bling, contests, and raffles in their different
• The Mexican Industrial Property Agency modalities.
(IMPI): in charge of industrial property filing • The Ministry of Health: authorises the trans-
and intellectual property litigation from an mission of advertising related to:
168 CHAMBERS.COM
Arochi & Lindner
(a) the practice of medicine and its related individuals or companies. Shareholders will only
activities; and be held liable if their individual participation in
(b) food supplements, biotechnological the illegal conduct can be proved.
products, alcoholic beverages, medicines,
herbal remedies, medical equipment, Third parties who provide services to the adver-
cosmetics, pesticides, plant nutrients and tiser, are generally not liable for deceptive adver-
toxic or dangerous substances. tising. However, the parties may agree that the
• The Advertising Consultive Council: ema- service provided is held responsible for the con-
nates from the health government entity and tents of the publicity and, therefore, it could be
addresses advertising related to: possible to pursue civil actions to obtain damag-
(a) health services; es for any penalties imposed by the authorities.
(b) food, food supplements and non-alcohol-
ic beverages; Concerning criminal matters, there is a short
(c) infant formula; list of felonies for which a company can be
(d) alcoholic beverages and tobacco; held responsible as such, addressing the case
(e) health supplies, drugs, herbal remedies, against its legal representative.
medical equipment, and surgical and
healing supplies; 1.4 Self-Regulatory Authorities
(f) hygiene products; In Mexico there is a non-binding self-regulatory
(g) cleaning products; association, the Self-regulation and Advertising
(h) perfumes, lotions, cosmetics and beauty Ethics Council AC (CONAR). CONAR’s mission
products; is to exercise advertising self-regulation among
(i) pesticides, plant nutrients and toxic or its affiliates and establish the legal framework
dangerous substances; and throughout the industry to promote fair compe-
(j) biotechnological goods. tition and defend each Mexican consumer by
ensuring that they receive accurate and timely
1.3 Liability for Deceptive Advertising advice through responsible advertising. CONAR
The scope for deceptive advertising is limited is frequently used to enlighten and guide Mexi-
depending on the case. Unfortunately, the Mexi- can authorities regarding day-to-day cases that
can jurisdiction is underdeveloped regarding this are related to advertising matters.
type of matter and cases are usually seen cas-
uistically. For example, if there is a misleading 1.5 Private Right of Action for
advertising issue, this can be seen before the Consumers
Mexican Consumer Protection Agency (PRO- There are two proceedings available before the
FECO); but if there is unlawful competition in the Mexican Consumer Protection Agency (PRO-
matter or a third party’s trade mark is discredit- FECO), in which private parties may challenge
ed, it can be addressed to the Mexican Industrial advertising practices.
Property Agency (IMPI). In Mexico, these kinds
of cases must be analysed and prosecuted • Complaint – any individual may file a com-
before the authority it is believed can provide plaint denouncing the existence of unlawful
the best approach to the case. Either way, those advertising practices. This complaint may
government entities are empowered to sanction
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lead to an investigation and to penalties using influencers, and this has been a “trending
against the advertiser. topic” throughout COVID-19. The massive use
• Arbitration – in this case, the parties seek to and growth of influencers and social media have
conciliate before the authority, with the pur- put a lot of pressure on the system of advertising
pose of reaching an agreement to solve the and marketing regulation in Mexico, highlight-
matter; terms of agreement usually include ing the urgent need for further regulation. Private
a reimbursement of any prices paid by the industry participation is key in this regulation;
consumer, indemnification for damages otherwise, the government’s unilateral work may
caused by the unlawful practice, or granting cause things to be done without the benefit of
of additional goods or services. a thorough legal and technical advertising per-
spective.
If there is not an agreement between the par-
ties, the consumers may file a civil action obtain- In the past year, Mexico has seen the introduc-
ing damages from the advertiser that may have tion of two important laws regarding advertising.
been caused by the unlawful advertising. However, these laws are focused on transpar-
ency in advertising contracting and outdoors
1.6 Regulatory and Legal Trends advertising, and not on the content of advertis-
There are some special rules that apply to spe- ing materials.
cific types of products. For instance, the rules for
advertising derived from the Health Act provide 1.8 Politics, Regulation and Enforcement
specific guidelines and limitations for advertising Despite the urge to say “no comment”, it is cer-
on various categories of sensitive goods (see the tainly the case that Mexico’s current administra-
bullet point on the Advertising Consultive Coun- tion is trying to modify the advertising industry
cil in 1.2 Regulatory Authorities for a list of such – targeting the agencies, rather than protecting
goods). For some of them, special authorisation consumers – and a clear example is the intro-
is required in order to advertise the product; for duction of new laws relating to transparency in
other industries, a notice given to the authority advertising contracting and outdoors advertis-
is enough. Moreover, when the COVID-19 pan- ing.
demic took hold, social media grew by 1,000%
as a publicity venue. The actions of social media
users, especially influencers, gave rise to many 2. Advertising Claims
cases that were prosecuted by competent
authorities in Mexico due to misleading adver- 2.1 Deceptive or Misleading Claims
tising, unlawful competition and lack of publicity According to the Federal Consumer Protection
permits (regulatory). Law, misleading advertising or abusive infor-
mation is understood to be that which refers
1.7 COVID-19, Regulation & Enforcement to characteristics or information related to any
The pandemic has clearly been an eye opener goods, product or service that may or may not
for the advertising industry. Advertising in social be true, or that could mislead or confuse the
media platforms has been exploding since the consumer by the inaccurate, false, exaggerated,
pandemic started. One of the key elements of partial, artificial, or tendentious way in which it
advertising in social media platforms are brands is presented.
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2.2 Regulation of Advertising Claims the applicable technical standard. If the answer
In principle, all advertising claims are subject is no, there will be more flexibility on the testing
to regulation. The Federal Consumer Protec- to be conducted, although it will be important
tion Law (FCPL) states that advertising must that this testing is based on scientific standards.
be truthful; subject to substantiation; clear; and
lacking texts, dialogues, sounds, images, trade 2.5 Human Clinical Studies
marks, denominations of origin or other descrip- The Federal Consumer Protection Law does not
tions that induce or may induce error or confu- specifically mention human clinical studies as
sion, due to their misleading or abusive nature. the basis for certain types of claims. However,
whether human clinical studies are indeed an
Claims that may not be objectively measured adequate means for substantiating the claim
might be acceptable and not subject to substan- will depend on the type of claim involved. The
tiation, provided that they do not violate the legal characteristics and requirements of the human
principles mentioned above. clinical studies will be determined, if applicable,
by a mandatory technical standard or otherwise
Implied claims will be analysed on a case-by- must be based on scientific standards.
case basis to determine if they comply with
the principles of the FCPL mentioned above, 2.6 Representation and Stereotypes in
and empirical evidence is frequently used as a Advertising
means for their substantiation. There is no current federal regulation that
addresses stereotyping in advertising or inclu-
2.3 Substantiation of Advertising Claims sion, diversity and equity.
Empirical evidence is frequently used for sub-
stantiating advertising claims and the specific However, some local laws do address this
type of substantiation will depend on the nature topic, as in some states the dissemination of
of the claim. advertising containing harmful prejudices and
stereotypes is prohibited. For example, local
For example, if a claim states that liquid soap laws in Mexico City prohibit the use of sexist
kills 99% of bacteria, a laboratory study will be stereotypes in advertising, which are deemed to
an acceptable means to substantiate that claim. associate denigrating, exclusionary, submissive,
If another claim states that 8 out of 10 individuals racist or derisive messages with women, or to
prefer hamburgers from Restaurant “X”, then a present women, their bodies, or parts thereof as
survey which follows scientific criteria will be an mere objects.
acceptable means for substantiating this claim.
It is claimed that the purpose of these laws is
2.4 Testing to Support Advertising to avoid the violation of the dignity or rights of
Claims individuals.
A first aspect to consider is determining whether
the product or service shown in the ad is regulat- 2.7 Environmental Claims
ed by a mandatory technical standard or not. If There is no current regulation regarding green
the answer is yes, testing must be based on the marketing/sustainability claims/greenwashing.
rules, methods and procedures established in The government implemented different pro-
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grammes in order to encourage companies to services, as long as the information is not false,
apply green marketing measures. misleading or abusive; or presented in an inac-
curate, false, exaggerated, partial, artificial or
The most relevant programme implemented by tendentious way. In the same vein, the Indus-
the Government was called “Plan Verde”, a cam- trial Property Law (LFPPI) excludes the lawful
paign containing the strategies and actions to comparison between products or services from
put Mexico on the road to sustainable develop- being considered as potentially trade mark dis-
ment. This programme, however, did not include crediting, as long as it is done with informative
binding regulations, and was only implemented purposes.
by Mexico City Government. Therefore, it is not
applicable in other states of the country. In addition, the Federal Consumer Protection
Law gave powers to PROFECO to issue guide-
2.8 Other Regulated Claims lines for comparative advertising, with the pur-
The Industrial Property Law stipulates that signs, pose of avoiding said comparative advertising
phrases, image elements, sentences, advertise- inducing consumers into error or confusion. Up
ments or trade names susceptible to deceiving to the present day (September 2022), PROFECO
or misleading the public may not be registered. has only issued one set of Guidelines dealing
Additionally, using trade marks with these char- exclusively with the procedure and requirements
acteristics may be considered an infringement. for the comparison of prices of identical goods
or services which are commercialised by differ-
Likewise, the law contemplates that signs that ent providers. The guidelines were published
are identical or confusingly similar to geographi- back in 2009.
cal areas, whether proper or common, maps,
town names or adjectives, when these indicate 3.2 Comparative Advertising Standards
the origin of the goods or services and may There are some specific requirements that must
cause confusion or error as to their origin, can- be taken into account with regard to compara-
not be registered. Likewise, unregistered use of tive advertising claims in addition to the ones
these signs can also constitute an infringement. applicable to general advertising claims. In this
sense, the Federal Consumer Protection Law
This type of case includes signs that are accom- states that the information or advertising that
panied by expressions such as “genre”, “type”, compares products or services, from the same
“manner”, “imitation”, “produced in”, “with brand or from different brands, shall not be mis-
manufacture in” or other similar ones that cre- leading or abusive as said terms are defined
ate confusion in the consumer or imply unfair in the law (see 2.1 Deceptive or Misleading
competition. Claims).
With regard to the comparison of prices of

3. Comparative Advertising goods or services, the specific requirements
established in the Federal Consumer Protection
3.1 Specific Rules or Restrictions Agency’s 2009 Guidelines must be observed.
The Federal Consumer Protection Law allows These requirements include that:
for the public comparison between products or
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• the goods or services must be identical; 4. Social/Digital Media

• the prices must be supported with the proof
of purchase or with a certification issued by a 4.1 Special Rules Applicable to Social
notary public/commercial notary public; and Media
• the documents mentioned above must Unfortunately, there are no specific rules or regu-
include the identity of the provider with whom lations that apply to social media in Mexico. To
the comparison is made and its domicile. enforce the same, we would have to go to the
basic rules of Mexican advertising legal enforce-
Comparative information will be valid for five ment as explained in 1. Legal Framework and
days counted from the date of purchase or the Regulatory Bodies.
date of certification of a notary public/commer-
cial notary public. 4.2 Key Legal Challenges
The lack of legislation is a major challenge for
3.3 Challenging Comparative Claims marketers advertising in social media.
Made by Competitors
The Federal Consumer Protection Law allows 4.3 Liability for Third-Party Content
any individual or company to denounce a viola- There are no strong precedents on advertiser
tion of that law before PROFECO, for example if liability that indicate a settled position on this
an ad violates the principles established in said issue. There are divergent opinions on the level of
law (eg, that all advertising shall be truthful and responsibility that social media and site adminis-
not misleading). PROFECO will initiate an inves- trators hold for the content posted on their plat-
tigation of the denouncement and if it considers forms by third parties (users). The adoption of
that the ad violates the law, it may order its sus- best practices, such as removal of content pro-
pension and/or impose a fine on the advertiser. cedures and “notice & take down” techniques,
immediate reaction from the site administration
The Advertising Self-Regulation and Ethics to remove problematic ad content, or policies to
Council (CONAR) also has a procedure to settle suspend user accounts that do not comply with
disputes between its members or between par- the terms and conditions of the site, may pro-
ties that, without being members, agree to sub- tect those social network or advertisers’ admin-
mit themselves to CONAR’s procedure regarding istrators from legal responsibility under a safe
advertising claims. harbour regime. The foregoing will apply only if
the social network or advertiser did not directly
Comparative advertising is not as frequent in participate in the illegal act.
Mexico as it is in other countries (eg, the USA).
The most common practice in Mexico is price 4.4 Disclosure Requirements
comparison which can be seen directly by the As there are no specific rules or regulations that
consumers in supermarkets, and which is a use- apply to social media in our jurisdiction, the same
ful means for them to be sure that they are pay- rules that apply to traditional media advertising
ing a lower price than the one available in other would also apply to marketing through social
establishments. media. It would mostly depend on the nature of
the product or service, rather than the channel
of disclosure.
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4.5 Requirements for Use of Social Due to the time of issuance of the permit and
Media Platform because these campaigns are time sensitive,
There are no regulations specifically addressed brands use influencers in the maternal product
to the use of social media platforms in force. space (eg, to promote milk formula in the dif-
However, if any of these social media platforms ferent platforms). This is one of the examples
involve activities related to e-commerce or mar- of how the lack of legislation permits brands to
ketplaces operations (eg, Facebook), there are use different strategies that permit a new way of
specific regulations for this activity in particular; marketing products.
mostly, for the sellers, rather than the users.
In addition, it shall be analysed if there are other Influencer Campaigns
activities of the platform that could imply regu- Unfortunately, as mentioned in 4.1 Special
lations of other nature: eg, money reward pro- Rules Applicable to Social Media, we do not
grammes based on number of views or likes have any type of legislation nor guidelines spe-
when the performer/user is a minor. cifically established to regulate the use of influ-
encer campaigns in the Mexican jurisdiction.
4.6 Special Rules for Native Advertising
There are no special rules regarding “native 5.3 Advertiser Liability for Influencer
advertising”, other than complying with the regu- Content
lations for regular publicity. Due to the lack of legislation regarding the day-
to-day activity of influencers in our jurisdiction,
4.7 Misinformation everything related to the same emanates from
There are no special rules regarding misinforma- a private contract between the influencer, the
tion on topics of public importance, other than brands and sometimes the agencies.
complying with the regulations for regular pub-
licity. 5.4 Misleading/Fake Reviews
There is no current regulation addressing fake
reviews or banning employees or companies
5. Social Media Influencer from posting online reviews of their own prod-
Campaigns and Online Reviews ucts. However, these activities are considered as
improper practices and should be discouraged,
5.1 Trends in the Use of Influencer as they could lead to commercial consequences
Campaigns or bad reputation.
Due to the COVID-19 pandemic, the use of influ-
encer campaigns has been a “trending topic”
for trade marks and brands all over the Mexi- 6. Privacy and Advertising
can market. As a result of the lack of legisla-
tion, the benefits of marketing using influencers 6.1 Email Marketing
is being taken advantage of. For example, the The use of any personal data must be done with
Mexican Health Law prohibits medical profes- a verifiable consent from the data owner and,
sionals from publicising on any type of platform in order to obtain such consent, it is necessary
without a permit issued by the Mexican FDA. to notify the type of data processing through a
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privacy notice which must be available to the the sanctions mentioned in 6.1 Email Marketing
data owner prior to such processing. Where the may be imposed.
personal/contact data has been obtained indi-
rectly, the privacy notice must be made available Telemarketing is aligned with privacy regulation
to data holders in the first contact with the data if:
controller, which means in the very first market-
ing email. • a short version of the privacy notice is avail-
able at the beginning of the call;
The privacy notice used in marketing emails is a • there is a consent from the data owner; and
short one version and must contain at least (i) the • an opt-out mechanism or an unsubscribe list
controller’s name and address, and (ii) the pur- option is enabled.
poses and means to access and consult the full
version of the privacy notice. If after receiving/ 6.3 Text Messaging
reviewing the above-mentioned information, the As mentioned, the use of personal data is allowed
data holder does not oppose the processing of for secondary purposes (in this case through text
their personal data for marketing purposes, then messaging) if a data holder grants their consent
the company can continue to send them emails. after having been informed about the personal
However, to cater for those who do not wish to data processing and does not object to the use
receive this type of communication, the use of of their data for the informed purposes. Unsub-
opt-out mechanisms is highly recommended, scribe lists and opt-out mechanisms must be
and these should be enabled in every email sent. enabled too.
For violations of privacy or data security law, the Non-compliance with these requirements could
law provides a list of actions that are grounds for lead to sanctions considered in the Mexican pri-
sanction. Fines range from 100 to 320,000 times vacy legal framework.
the current minimum daily wage (approximately
USD5.38). For recurring infringements, an addi- 6.4 Targeted/Interest-Based Advertising
tional fine may be imposed and may be doubled Although most of targeted/interested-based
when the case involves sensitive data. Sanctions advertising currently depends on the use of AI,
may be imposed without prejudice to any civil or cookies, bacons, and similar technologies, the
criminal liability that could arise. local legal frame only considers informing the
data owner of the use of this type of technology
6.2 Telemarketing (if any) and the way to disable it as a statutory
As in many of the existing privacy legal frame- requirement. As with the other elements of data
works, opposition is one of the rights considered processing, this information must be part of the
in privacy and data protection regulation in Mexi- privacy notice.
co. This right is mainly focused on non-core pur-
poses and, as marketing is always considered as Fortunately, awareness of privacy and data pro-
being for secondary purposes, the data owner tection is rising and the use of tools/mechanisms
can exercise this right at any moment. The data for easy customisation of this type of technology
controller must act accordingly in order to com- is increasing.
ply with the local regulation; otherwise, one of
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6.5 Marketing to Children 7.2 Contests of Skill and Games of

Unfortunately, the local privacy legal framework Chance
does not consider special rules/requirements Mexican law distinguishes between contests of
for processing children’s personal data. Thus, skill and games of chance. In accordance with
the criteria for processing the data of this com- the applicable legal framework, games of chance
munity are the same as those applied to adults’ are based upon randomness and the result of
data processing. the game is totally outside the player’s control.
A game of skill, on the other hand, implies that
Notwithstanding the above, Mexican privacy law its result is not based upon randomness and that
considers children to be a “special” sector, and the player’s skills will determine the outcome of
it establishes that data processing must be car- the game.
ried out without the use of misleading or fraudu-
lent means. Thus, any abusive use of children’s 7.3 Registration and Approval
data shall be prosecuted and punished, and Requirements
potentially increases the sanctions that may be The organiser of a game of chance to be car-
imposed by the authority. ried out in Mexico (eg, if the draw will take place
in Mexico) must obtain a prior permit from the
Having said this, it is highly recommended that Ministry of the Interior. This procedure may take
the privacy notice be consented to using a from four to six weeks to be concluded. The
checkbox as well as the implementation of plug- authority will analyse on a case-by-case basis
ins for age verification. the mechanics of the game to ensure its fair-
ness. The organiser will be asked to hire a bond
to guarantee the payment of the prizes.
7. Sweepstakes and Other
Consumer Promotions If the game of chance includes a purchase
requirement, the organiser must additionally file
7.1 Sweepstakes and Contests a notice before PROFECO at least 72 hours prior
If the sweepstakes or chance-based contests to the start of the game of chance.
are carried out within Mexican territory (eg, if the
draw will take place in Mexico), there will be a Contests of skill do not require a permit from
need to obtain a prior permit from the Ministry the Ministry of the Interior. Nevertheless, if these
of the Interior. contests include a purchase requirement, the
organiser must file a notice before PROFECO at
Consumers may be required or requested to least 72 hours prior to the start of the contest.
make a purchase in order to participate, but in
this type of promotion, the organiser must file a 7.4 Loyalty Programmes
notice before PROFECO at least 72 hours prior Although there are no special laws or regulations
to the start of the relevant promotion. that apply to loyalty programmes, the general
provisions of the Federal Consumer Protection
Law (FCPL) are applicable. In this sense, what-
ever terms and conditions are presented by the
goods/services provider to the consumer, said
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terms and conditions must be honoured. Non- services and the regular price. In addition, the
compliance in this regard will be deemed as a consumer will have the right to a monetary com-
violation of the FCPL. pensation equivalent to 20% of the price paid
by the former.
7.5 Free and Reduced-Price Offers
In the case of offers, the Federal Consumer 7.6 Automatic Renewal/Continuous
Protection Law (FCPL) establishes the following Service Offers
specific rules. The Federal Consumer Protection Law (FCPL)
and its Regulations establish that automatic
• Advertising of offers must include the condi- renewal/continuous service offers under which
tions, as well as the term or available quantity a marketer can continue to ship and bill for prod-
of the offered goods/services. ucts and services on a recurring basis until the
• The available quantity of the offered goods/ consumer cancels may be carried out, provided
services will be subject to verification, if and that the consumer has previously authorised
when required by PROFECO. the charges or that said charges derive from a
• If there is no information on the offer’s term or related contract. If these requirements are not
available goods/services, it will be presumed met, the above-mentioned offers would violate
that they are indefinite, up until the moment the FCPL and its Regulations.
that the offer is publicly finalised through the
same means of communication in which it
was advertised. 8. Sports Betting/Gambling
• Each and every consumer that complies with
the applicable requirements for the offer, 8.1 Legality & General Regulatory
will have the right to acquire the applicable Framework
goods/services during the term of the offer or In Mexico, sports betting and other forms of
as long as there is availability of the relevant gambling are in all cases subject to heavy reg-
goods/services. ulation under the Federal Law on Betting and
• There is a prohibition of carrying out offers in Gambling (FLBG), and its Regulations.
which the advertised monetary value of the
goods/services is clearly superior to the one Companies intending to engage in the business
normally available in the market. of sports betting and gambling require a prior
permit from the Ministry of the Interior.
If the offering party does not comply with its
offer, the consumer may opt for: The above-mentioned permits may only be
granted to companies incorporated under the
• requesting compliance; Mexican laws (although foreign investors may be
• accepting other equivalent goods/services; or shareholders of said Mexican companies).
• terminating the contract.
The permits’ term may run from one to 25 years.
In all three cases the consumer will have the right The permits may be renewed for subsequent
to receive a monetary payment representing the terms of 15 years each, as long as the permit
difference between the offer price for the goods/ holder is in full compliance with the terms and
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conditions established in the permit and the obli- today, e-commerce is largely regulated by three
gations established in the FLBG and its Regula- norms and a tool to enable “good practice”:
tions.
• the Consumer Protection Act;
Consumers of sports betting and other forms of • the Code of Commerce; and
gambling may only be individuals of legal age • the Mexican Norm for e-commerce NMX-
(18 and above). COE-001-SCFI-2018 (non-binding).
8.2 Special Rules & Regulations The Ethics Code and digital seal implemented
The Regulations to the Federal Law on Betting by PROFECO are voluntary and considered as
and Gambling establish some specific rules that a basis of good practice. In addition, crypto-
apply to the advertising and marketing of sports currency is not recognised as a legal tender in
betting and gambling. Mexico, nor recommended to consumers/users.
Non-fungible tokens (NFTs) are slowly gaining
• This type of advertising may only be pub- recognition, with no specific regulations to be
lished/broadcasted once the Ministry of the issued in the near future, but concerns remain
Interior has granted the permit for the opera- relating to basic offers and civil norms and copy-
tion of the relevant company. rights. Unfortunately, the Mexican legal system
• Advertising must be clear and precise in order is not particularly forward-thinking in regard to
to avoid inducing the public into error, or mis- developments in information and communica-
leading or confusing them with regard to the tion technologies (ICT).
services to be rendered.
• The ad must display the permit number. 9.2 Metaverse
• The ad must include information stating There are no laws or regulations addressed to
that betting and gambling are prohibited for the metaverse, nor ruled cases, whether related
minors. to advertising or any other subject. First of all,
• The ad must include messages inviting jurisdiction urgently needs to be established: to
individuals to bet/gamble in a responsible what extent Mexican authorities are entitled to
manner and with the main purpose of enter- act in a virtual world that has no physical borders.
tainment and fun. In light of this issue, Mexican authorities may
only intervene when the advertiser is a Mexican
company, the server that holds the virtual space
9. Web 3.0 is located in Mexico, or if the affected consumer
is Mexican or physically located in Mexican ter-
9.1 Cryptocurrency and Non-fungible ritory, despite its avatar.
Tokens (NFTs)
As referred in 4.1 Special Rules Applicable 9.3 Digital Platforms
to Social Media, there are no specific rules or Mexico has not issued any law or regulation
regulations that apply to advertising, depending addressed to digital advertising platforms or
on the broadcasting channel, but only general the use of adtech, so all related cases have to
provisions. For their part, Mexican e-commerce be grounded on standard advertising regulation,
policies are still in constant development. As of unless they involve issues related to cybersecu-
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rity (eg, phishing, fraud), which will require the Moreover, all advertising related to special
assessment of possible criminal law application. events must be careful not to infringe sponsor-
ship spaces and/or commit activities that may
amount to ambush marketing. Private entities,
10. Product Compliance such as FIFA, yearly issue their own guidelines to
avoid advertising misconduct during their soccer
10.1 Regulated Products events. Cases of this nature may be addressed
Advertising related to food supplements, alco- to the Federal Economic Competition Commis-
holic beverages, medicines, herbal remedies, sion (COFECE).
medical equipment, and toxic or dangerous
substances must have a permit from the Min-
istry of Health. Depending on the specific case,
some products must contain in their advertising
a message of social responsibility regarding the
consumption of such products.
10.2 Other Products

Advertisement is not permitted where consump-
tion of products is prohibited in Mexico: eg,
vapers, cannabis (with exceptions for personal
use but not advertising), and cryptocurrency
operations. In addition, specific authorisation
from the Central Bank (Banxico) and the Nation-
al Banking and Securities Commission (CNBV)
must be obtained before the advertisement of
financial services, with permits granted to oper-
ate on specific financial/monetary activities.
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Arochi & Lindner (A&L) is one of the most re- alcoholic beverages, pharmaceutical, automo-
spected and recognised names in Latin Ameri- bile, apparel, luxury brands, video games, fast-
can intellectual property protection, handling moving consumer goods, sports, retailers, and
all aspects of IP including trade mark, patent, advertising agencies, among others. A&L has
copyright, IP litigation and dispute resolution, a comprehensive coverage against piracy and
IP rights enforcement, life sciences, domain counterfeiting, and, in general terms, of IP rights
names, trade secret protection, as well as ad- observance. The firm handles more than 40%
vertising, marketing, data privacy, blockchain, of the IP litigation cases in Mexico. Since 1994,
web 3.0 and metaverse, civil and commercial A&L has distinguished itself with its legal exper-
litigation, corporate and regulatory law. A&L’s tise and exceptional understanding of business
IP portfolio includes IP rights holders from the needs, expanding its areas of expertise over the
following sectors: information technologies, en- years.
tertainment, food and non-alcoholic beverages,
Authors
Adrián Martínez holds a law Sebastian Weinberg Garcia
degree, graduated with honours attained his law degree at
at the ITESM and attended the Universidad Iberoamericana. He
“Global Lawyer” Honours has been working at the
Programme at the Garrigues Information and Communication
Study Centre in Madrid. He has Technologies department at
a specialisation degree in Civil and Commercial Arochi & Lindner since September 2021.
Procedural Law. His practice is focused on Sebastian has more than five years’ experience
intellectual property litigation, counselling in intellectual property. His practice is mainly
related to the defence of intellectual property focused on advising on strategies for the
rights, administrative law consulting services, protection, enforcement, defence and
copyright and entertainment, advertising law observation of intellectual property rights,
and consumer law. Adrián has collaborated on mainly in trade mark matters, intellectual
several publications specialising in intellectual property litigation issues, and consulting on
property, administrative law, advertising law administrative law, copyright, regulatory and
and consumer law. He is a member of the advertising law.
Mexican Association for the Protection of
Intellectual Property (AMPPI) and the
International Trademark Association (INTA).
180 CHAMBERS.COM
Arochi & Lindner
José Antonio Arochi joined Pamela Gisholt has extensive

Arochi & Lindner in 2016. His experience in the protection and
practice includes strategic enforcement of the intellectual
consultation in the protection, property rights of leading
defence and exercise of companies by developing and
intellectual property rights, as implementing strategies for the
well as consulting in the fields of ICT, protection and defence of IP rights, including
regulatory, advertising and marketing. His border measures, raids, administrative and
professional background includes three years’ criminal litigation. She has extensive
experience working in a premier IP law firm in experience in domain name matters,
Washington DC. He has a law degree from consulting and review of T&C, and operational
Universidad Iberoamericana and a Master of policies in the field of ICT, as well as matters
Laws degree from the University of related to blockchain, web 3.0, NFT and
Washington. José is a member of the metaverse. Pamela is a member of the
International Trademark Association (INTA), the International Anti-counterfeiting Coalition
Mexican Association for the Protection of (IACC), National Association of Business
Intellectual Property (AMPPI) and the Lawyers (ANADE), the Internet Corporation for
International Anti-counterfeiting Coalition the Assignment of Names and Numbers
(IACC), among others. (ICANN) and the International Trademark
Association (INTA), among others.
Arochi & Lindner

Insurgentes Sur 1605
Piso 20
Col. San José Insurgentes
C.P. 03900
Ciudad de México
Mexico
Tel: +52 55 4170 2050

Fax: +52 55 4170 2113
Email: info@arochilindner.com
Web: www.arochilindner.com
181 CHAMBERS.COM
MEXICO Trends and Developments

Contributed by:
Adrián Martínez, Sebastian Weinberg Garcia, José
Antonio Arochi and Pamela Gisholt
Arochi & Lindner see p.186
Recent Trends in Legislation Related to requires that agencies only acquire ad spaces
Advertising in Mexico once they have been instructed to do so by
In the last few years, Mexican lawmakers and clients.
authorities (both federal and local) have made • Agencies cannot receive any additional com-
efforts to regulate different practices in advertis- pensation other than the fee charged to the
ing which have been present in the industry for advertiser. Essentially, these prohibitions have
years but had not been addressed in the past. the intention of outlawing rebates paid by
media outlets.
This brief article seeks to explain some key • Invoices issued by media outlets for the sale
points regarding two specific laws that were of ad spaces are more strictly regulated. The
approved in 2021 and 2022, and which have provisions are aimed at strengthening the tax
caused some controversy in the Mexican adver- controls of the advertising industry.
tising community. • Media owners are barred from granting dis-
counts to agencies. Particularly, any discount
Law for Promoting Transparency and offered by the media owner to the agency
Preventing and Combating Malpractice in the must be carried over to the advertiser or final
Contracting of Advertising. One year later, client.
where are we and what can we expect? • The LTMCA prohibits a single entity from
Summary of the law providing services both to media owners and
In September 2021, a new federal law was to clients seeking to advertise their goods or
introduced in the Mexican legal system, heavily services, with the purpose of avoiding con-
inspired by the French “Sapin Law”, with the pur- flicts of interest. As an alternative, the LTMCA
pose of regulating the activities of media agen- allows separate companies belonging to
cies, and their relationships with both advertisers agency’s economic group to engage in these
and media outlets. activities.
• Finally, the penalties for non-compliance with
The law is entitled the Law for Promoting these provisions include fines of 2% or 4% of
Transparency and Preventing and Combating the infringing revenue. However, the concept
Malpractice in the Contracting of Advertising of revenue is ambiguous and not precisely
(LTMCA), and some of its main points include defined, which creates some uncertainty (for
the following. example, the authority could impose a fine
of 2% of monthly revenue, yearly revenue, or
• Agencies are prohibited from acquiring, on revenue related to a specific project).
their own right, inventories of media spaces
with the purpose of reselling them to cli-
ents at a later date. Specifically, the LTMCA
182 CHAMBERS.COM
Arochi & Lindner
Where are we now? a result, neither authority has been active in car-
It is arguable that the LTMCA was a well- rying out investigations relating to compliance
intentioned but badly executed effort to tackle with the LTMCA.
improper practices in the advertising industry,
and it has stirred controversy since its incep- Moreover, approximately 300 constitutional
tion. Consequently, its enforcement has been injunctions were filed against the LTMCA. The
essentially non-existent, one year since it for- plaintiffs of these legal actions were mostly
mally came into force. agencies, but advertisers and media agencies
also filed some of the lawsuits. In these proceed-
Initially, some entities involved in the advertising ings, it was claimed that the LTMCA should be
market in Mexico claimed that (i) the LTMCA was deemed unconstitutional and non-enforceable,
drafted without taking into consideration impor- as it was argued that its regulations were not jus-
tant elements of the industry, (ii) it was approved tified or proportional, that several fundamental
without significant discussion in Congress or rights were violated (including the right to free
with representatives of the relevant agents, commerce and freedom of expression) and that
and (iii) that certain provisions are unclear and the ambiguity in some provisions created legal
ambiguous, among other criticisms. uncertainty for the relevant participants in the
advertising industry.
These controversies increased when it was later
determined that the enforcement authority would The majority of rulings issued so far have deter-
be the Mexican Commission of Economic Com- mined that the LTMCA is indeed unconstitutional,
petence (COFECE), a government body whose based on the claims made by agencies, advertis-
purpose is to enforce antitrust regulations. ers and media outlets. It should be emphasised
that these decisions are not yet conclusive and
COFECE itself issued press releases in which it final, as they have been challenged by Senate,
was pointed out that the regulations included in Representatives Chamber and even the Mexi-
the LTMCA were not actually related to antitrust can President, and the proceedings are currently
laws, and that COFECE was not the ideal author- under prosecution before Federal Courts.
ity to enforce it. Eventually, COFECE even filed
a constitutional challenge of the LTMCA before What can we expect for the future?
the Supreme Court, based on these arguments. Presently, there is uncertainty regarding the
future of this law: considering the judicial chal-
Additionally, another authority, the Federal Insti- lenges that have been filed against the LTMCA,
tute of Telecommunications (IFT) filed a similar the issue is whether this version of the statute
challenge to the LTMCA, claiming that some will be enforced at all, or it will be necessary to
provisions of this law should be administered amend the statute before the authorities begin
by it, as the government agency responsible for enforcing it.
regulating the activities of media outlets across
different topics. However, as the LTMCA is still valid and – theo-
retically – enforceable, the industry has attempt-
Presently, both challenges await resolution ed to adapt and change, to avoid liability. Conse-
pending the Supreme Court’s decision, and, as quently, most major agencies and media outlets
183 CHAMBERS.COM
Arochi & Lindner
in Mexico have dedicated the last fifteen months to install advertising in Mexico City and includes
to reviewing and changing agreements, renego- increased penalties and stricter measures to
tiating deals to avoid incurring illegal activities, ensure compliance.
and creating new commercial projects, aimed at
compensating the losses they could suffer from Some of the main goals of this new regulation
the activities they are no longer allowed to carry are as follows:
out.
• protection of public space and the urban
In any case, it is considered very unlikely that landscape;
the Mexican government will back down in its • prevention of the abusive use of architectural
efforts to regulate this aspect of the advertis- elements that generate visual overstimulation;
ing industry. Therefore, it is almost certain that, • restrictions on the placement of advertising
eventually, some version of the LTMCA will be elements; and
fully enforced – although the questions of which • creation of rules regarding content and
authority will oversee these activities, and to specific messages used in advertising, to
what extent, remain unanswered. guarantee gender equality perspective and
to contribute to the eradication of discrimina-
In view of these circumstances, consulting tion, among other social causes.
experienced counsel is recommended for par-
ties interested in engaging in activities related to Moreover, the law prohibits or strictly limits the
media agencies or the acquisition of ad spaces installation and use of certain types of advertis-
in Mexico, as it is extremely important to ensure ing which were not expressly regulated in the
compliance with all applicable regulations, as past, such as the following:
well as to be aware of the status of laws, authori-
ties and legal challenges related to the LTMCA. • advertising media with sound;
• advertising media using drones;
Outdoors Advertising Law of Mexico City: a • inflatable advertising media, whether fixed or
revamped version of older regulations suspended in the air;
Summary of the law • figurative or abstract media, with volume or in
On 7 June 2022, a local law entered into force three dimensions; and
in Mexico City, with the purpose of regulating • projection mapping and other technology-
the installation, maintenance, permanence and based media.
removal of advertising media outdoors. This
piece of legislation, entitled Outdoors Adver- While a significant part of the OAL-CDMX does
tising Law in Mexico City (OAL-CDMX), is an not include new rules, some sections have
updated version of previous rules enacted by caused controversy, as they have been con-
the local government, and it now regulates some sidered disproportionate or excessively strict.
practices that had not been expressly addressed Consequently, several constitutional injunctions
in the past. have also been filed by different parties, with the
purpose of invalidating or avoiding the enforce-
Additionally, the OAL-CDMX creates a complex ment of certain sections of the law.
system of authorisations and permits required
184 CHAMBERS.COM
Arochi & Lindner
Arguments made in these challenges include (i) Nevertheless, it is very important for companies
claiming that the OAL-CDMX creates unjustified engaged in advertising activities in Mexico City
barriers and impediments in commercial prac- to be aware of the implications of this law, the
tices and in the activities of advertisers, media required permits and authorisation, and the sta-
agencies and owners of premises where adver- tus of the injunctions, to ensure that their prac-
tising media is installed, (ii) claiming that regula- tices will be compliant with the law.
tions are disproportionate and excessively strict,
and (iii) claiming that the law undermines free- Additionally, while this is a local law which is
dom of speech, since it seeks to limit the flow of currently only enforceable in Mexico City, it is
information and the type of messages than can considered likely that similar regulations may be
be used in advertising. enacted in other states of the country, in the near
future. Indeed, in the context of Mexico, the laws
Additionally, the law has been challenged before of Mexico City have always been regarded as the
the Supreme Court by certain local official enti- most innovative and trendsetting of the nation.
ties, claiming that Mexico City’s government is Therefore, when new legislation is passed by
invading the activities of other authorities. Pres- Mexico City’s congress, it commonly spear-
ently, all these proceedings are still under pros- heads similar efforts in other parts of Mexico.
ecution before the Mexican courts.
Additionally, it should be emphasised that all
What can we expect for the future? states already have some type of regulation
Although the OAL-CDMX was less controver- regarding outdoors advertising, which supports
sial than LTMCA, it has still created uncertainty the prediction that other local jurisdictions may
in the advertising industry, particularly among simply “update” their regulations in similar terms
agencies and companies engaged in innovative to those included in the OAL-CDMX, rather than
advertising practices that were not regulated in create a completely new law.
the past, and which are now significantly limited
or restricted. In view of the foregoing, consulting a local coun-
sel with relevant experience in the advertising
It is considered very unlikely that this law will be industry is recommended before commission-
fully overturned in the Courts, but certain sec- ing the installation of outdoors advertising, to
tions may be invalidated or modified due to the diminish legal risks and ensure compliance with
challenges that have been filed. all applicable local regulations.
185 CHAMBERS.COM
Arochi & Lindner
Arochi & Lindner (A&L) is one of the most re- alcoholic beverages, pharmaceutical, automo-
spected and recognised names in Latin Ameri- bile, apparel, luxury brands, video games, fast-
can intellectual property protection, handling moving consumer goods, sports, retailers, and
all aspects of IP including trade mark, patent, advertising agencies, among others. A&L has
copyright, IP litigation and dispute resolution, a comprehensive coverage against piracy and
IP rights enforcement, life sciences, domain counterfeiting, and, in general terms, of IP rights
names, trade secret protection, as well as ad- observance. The firm handles more than 40%
vertising, marketing, data privacy, blockchain, of the IP litigation cases in Mexico. Since 1994,
web 3.0 and metaverse, civil and commercial A&L has distinguished itself with its legal exper-
litigation, corporate and regulatory law. A&L’s tise and exceptional understanding of business
IP portfolio includes IP rights holders from the needs, expanding its areas of expertise over the
following sectors: information technologies, en- years.
tertainment, food and non-alcoholic beverages,
Authors
Adrián Martínez holds a law Sebastian Weinberg Garcia
degree, graduated with honours attained his law degree at
at the ITESM and attended the Universidad Iberoamericana. He
“Global Lawyer” Honours has been working at the
Programme at the Garrigues Information and Communication
Study Centre in Madrid. He has Technologies department at
a specialisation degree in Civil and Commercial Arochi & Lindner since September 2021.
Procedural Law. His practice is focused on Sebastian has more than five years’ experience
intellectual property litigation, counselling in intellectual property. His practice is mainly
related to the defence of intellectual property focused on advising on strategies for the
rights, administrative law consulting services, protection, enforcement, defence and
copyright and entertainment, advertising law observation of intellectual property rights,
and consumer law. Adrián has collaborated on mainly in trade mark matters, intellectual
several publications specialising in intellectual property litigation issues, and consulting on
property, administrative law, advertising law administrative law, copyright, regulatory and
and consumer law. He is a member of the advertising law.
Mexican Association for the Protection of
Intellectual Property (AMPPI) and the
International Trademark Association (INTA).
186 CHAMBERS.COM
Arochi & Lindner
José Antonio Arochi joined Pamela Gisholt has extensive

Arochi & Lindner in 2016. His experience in the protection and
practice includes strategic enforcement of the intellectual
consultation in the protection, property rights of leading
defence and exercise of companies by developing and
intellectual property rights, as implementing strategies for the
well as consulting in the fields of ICT, protection and defence of IP rights, including
regulatory, advertising and marketing. His border measures, raids, administrative and
professional background includes three years’ criminal litigation. She has extensive
experience working in a premier IP law firm in experience in domain name matters,
Washington DC. He has a law degree from consulting and review of T&C, and operational
Universidad Iberoamericana and a Master of policies in the field of ICT, as well as matters
Laws degree from the University of related to blockchain, web 3.0, NFT and
Washington. José is a member of the metaverse. Pamela is a member of the
International Trademark Association (INTA), the International Anti-counterfeiting Coalition
Mexican Association for the Protection of (IACC), National Association of Business
Intellectual Property (AMPPI) and the Lawyers (ANADE), the Internet Corporation for
International Anti-counterfeiting Coalition the Assignment of Names and Numbers
(IACC), among others. (ICANN) and the International Trademark
Association (INTA), among others.
Arochi & Lindner

Insurgentes Sur 1605
Piso 20
Col. San José Insurgentes
C.P. 03900 Ciudad de México
Mexico
Tel: +52 55 4170 2050

Fax: +52 55 4170 2113
Email: info@arochilindner.com
Web: www.arochilindner.com
187 CHAMBERS.COM
SWITZERLAND
Law and Practice
Germany
France
Bern
Contributed by: Switzerland

Lukas Bühlmann, Michael Reinle and Michael Schüepp
MLL Legal see p.210
Italy
Contents
Offers p.205
Platform p.198
188 CHAMBERS.COM
SWITZERLAND Law and Practice
Contributed by: Lukas Bühlmann, Michael Reinle and Michael Schüepp, MLL Legal
1. Legal Framework and • the Copyright Act (when displaying pictures

Regulatory Bodies or videos of third parties in advertising); and
• legislation dealing with personality rights and
1.1 Primary Laws and Regulation data protection (when displaying pictures of
Unfair Competition Law individuals or processing personal data for
The primary regulation governing advertising marketing purposes).
practices is the Swiss Unfair Competition Act.
The Unfair Competition Act (UCA) sets out Rules for specific industries, products or
(amongst others): services
The most relevant industry-specific regulations
• the basic applicable rules, such as the gen- are set out in 10.1 Regulated Products.
eral transparency principle in commercial
communication; Soft Law and Self-Regulation
• the prohibition of inaccurate, deceptive or Finally, there is soft law created by industry
misleading advertising claims about other organisations and non-profit organisations.
companies and their products (Article 3 para-
graph 1 littera a, UCA) or one’s own products The most important soft law regarding adver-
and services (Article 3 paragraph 1 littera b, tising are the so-called principles of the Swiss
UCA); Fair Competition Commission (Lauterkeitskom-
• requirements for comparative advertising mission) regarding commercial communication.
(Article 3 paragraph 1 littera e, UCA);
• requirements for below-cost offers and the These principles include, amongst others,
advertising related thereto (Article 3 para- requirements for the use of test results in adver-
graph 1 littera f, UCA); tising and requirements for direct marketing. The
• requirements for offers with premiums and principles are non-binding and not enforceable
the advertising related thereto (Article 3 para- like statutes. However, the Commission may
graph 1 littera g, UCA); render decisions, which are published and may
• requirements for email marketing (Article 3 affect the reputation of the offender.
paragraph 1 littera o, UCA);
• certain requirements for sweepstakes and 1.2 Enforcement and Regulatory
contests (Article 3 paragraph 1 littera t, UCA); Authorities
and Whereas the sector-specific regulations are often
• requirements for telemarketing (Article 3 para- enforced by the respective supervisory authori-
graph 1 littera u, UCA). ties, the more general advertising regulations are
enforced as set out below.
Advertising-Related Provisions in Other
Statutes Cantonal Civil Courts
Other relevant laws are: The UCA, and the other regulations mentioned
in 1.1 Primary Laws and Regulation, such as
• the Trademark Act (when displaying trade the Trademark Act and the Copyright Act, pro-
marks of third parties in advertising); vide for civil law remedies, which are enforced
by cantonal civil courts.
189 CHAMBERS.COM
Article 9 paragraph 1 of the UCA sets out that Swiss Fair Competition Commission
claimants can request the civil courts to: The Commission enforces its own principles
(see 1.1 Primary Laws and Regulation). The
• prohibit imminent infringements of the UCA; proceeding is rather streamlined, including tem-
• have existing infringements of the UCA plate complaint forms and the absence of oral
removed (eg, by removing promotional hearings. It is initiated upon request and ends
materials with illegal claims from the market, with a non-binding decision. The decisions are
including from websites); and published.
• declare a behaviour illegal if it should con-
tinue. 1.3 Liability for Deceptive Advertising
Civil Law Actions
Claimants may also ask for damages (Article 9 In the case of civil law litigation, the legal entity
paragraph 3, UCA). will be held liable where an employee or direc-
tor, in the course of the business activities of the
It is generally possible to request preliminary entity, committed the infringement.
injunctions against alleged infringers. However,
the requirements for such preliminary injunctions However, the UCA also permits litigation against
are rather strict under Swiss law. individuals if no legal entity is involved or if an
employee or director acts outside of their busi-
Cantonal Criminal Authorities ness activity (eg, if a director posts deceptive
The UCA and the other general regulations claims about a competitor on its private Twitter
mentioned in 1.1 Primary Laws and Regulation account). This is a grey area.
provide for criminal sanctions in the case of an
infringement, which are enforced by the cantonal Civil litigation can also be initiated against third
criminal authorities. parties. Injunctions and deletion requests are not
dependent on culpability. Therefore, a claimant
Article 23 of the UCA sets out that intentional may ask, for example, an advertising agency or
infringement of Article 3 of the UCA (among oth- hosting provider to cease displaying deceptive
er provisions) is sanctioned with imprisonment advertising. The most important issue in claims
of up to three years or a monetary penalty of up against third parties is often whether they are
to CHF540,000. There are no decisions available effectively in control of the infringing activities
in which a prison sentence was handed down. (ie, whether they have the competence to stop,
for example, deceptive advertising).
The competent criminal authorities are those of
the Swiss canton in which the criminal conduct Criminal Law Actions
has taken place or where the effect of the crimi- Criminal law actions are always directed against
nal conduct arose. individuals. The individual who is responsible for
the criminal conduct will be liable.
Criminal courts only initiate investigations based
upon complaints by competitors, consumer If criminal conduct is committed in the course
organisations or consumers with the capacity to of the business activities of a legal entity, it is
sue in the sense of Articles 9 and 10 of the UCA. often not that easy to determine the responsi-
190 CHAMBERS.COM
ble individual. In that case, criminal authorities edies are injunctions, removal of infringements,
often investigate the directors or employees who or damage claims.
were in charge of marketing decisions in the first
investigation phase. In the case of an infringement of data privacy
laws, the data subject has a private right of
Criminal proceedings are not often directed action. They can ask to have the data process-
against third parties, unless the investigations ing prohibited or blocked, or to have personal
reveal that such third parties might, in effect, be data deleted (see Article 15, DPA).
more responsible than the directors or employ-
ees of the advertiser. Third parties are some- In the case of an infringement of the UCA, con-
times the focus of investigation if the advertiser sumers/citizens have a private right of action if
has its registered seat outside of Switzerland their economic interests are threatened or dam-
and is therefore outside of the territorial scope aged by unfair behaviour (Article 9 paragraph 1,
of Swiss criminal law enforcement. UCA). Remedies would mainly be injunctions,
deletion requests and damage claims (see 1.2
1.4 Self-Regulatory Authorities Enforcement Regulatory Authorities).
As mentioned in 1.1 Primary Laws and Regu-
lation and 1.2 Enforcement and Regulatory 1.6 Regulatory and Legal Trends
Authorities, the Swiss Fair Competition Com- The case law of the Swiss Fair Competition
mission is one of the most important self-reg- Commission reveals a significant increase in
ulatory organisations governing and enforcing cases dealing with green marketing.
advertising rules.
A new approach can be seen regarding the
As the fees for the proceeding with the Com- enforcement against deceptive advertising in
mission are generally zero or rather low (com- connection with foodstuff and cosmetics. Article
pared to court fees), companies and individuals 18 of the Federal Statute on Foodstuffs and Util-
often file their complaints with the Commission ity Articles prohibits the use of deceptive claims
instead of civil courts. in advertising. As foodstuff and cosmetics are
regularly sold online, there is a trend that users
Other industry-specific self-regulation is covered of the respective platforms or online-shops are
in 10.1 Regulated Products. invited to submit comments on products. There
is a debate on whether the seller of these prod-
1.5 Private Right of Action for ucts is responsible for deceptive statements in
Consumers such comments. Swiss law does not know a
Whether consumers/private citizens have a pri- general liability of platform operators or online-
vate right of action depends on the infringed shop operators. However, certain cantonal
provisions/statutes. authorities decided that such a responsibility
cannot entirely be excluded. In case that this
In the case of an infringement of the trade mark opinion would be accepted by higher courts,
or copyright statutes, only the owners of the it would substantially affect the platform and
respective trade mark rights and copyrights online-shop operators. The operators would be
have a private right of action. The available rem- forced to control the content of comments.
191 CHAMBERS.COM
The following cases are noteworthy. mation to be provided by the sellers and to be
displayed on the platform to a rather extensive
Viagogo II degree. Moreover, the ticket exchange violated
In its decision of 27 October 2021, the Federal the UCA by increasing the price for the tickets
Supreme Court had to decide whether cer- gradually during the order process without dis-
tain marketing claims and activities by a ticket playing the effective total price in a transparent
exchange platform constituted deceptive adver- manner and without granting the user more than
tising in the sense of Article 3 paragraph 1 lit- three minutes to take the purchase decision. In
tera b of the UCA (BGer 4A_314/2021). It must that regard the Court held that the UCA was also
be emphasised that the Federal Supreme Court infringed by the displaying of claims and pop-up
did only assess the claims which were brought banners that suggested a substantial demand
forward in the appeal. The case dealt with tickets or a rare offer (“there are two other users in the
for a circus show. The claimant was the operator waiting list for these tickets”) without mentioning
of the circus for which the tickets were offered that these statements only apply to the ticket
on the ticket exchange. The Federal Supreme exchange and not to other sales channels. Final-
Court upheld the decision of the lower court that ly, the countdown displayed to finalise the order
the ticket exchange platform infringed Article 3 process was less than ten minutes.
paragraph 1 littera b of the UCA in several ways.
The ticket exchange platform infringed the UCA Swiss Meat
by claiming that certain shows of the circus were In a decision of 23 March 2022, the Swiss
already or almost sold out even though there Fair Competition Commission had to assess
were still tickets in the official sales channels. whether the campaign “Schweizer Fleisch –
The court held that the claim “sold out” could der feine Unterschied (Swiss Meat – the fine
be understood by the users in the specific situ- difference)” contained claims that constituted
ation in the way that tickets are not only sold deceptive green marketing. Please note that
out on the ticket exchange, but also in official an appeal against this decision is pending.
sales channels. The Court considered the other The statement”cattle in Switzerland eat 91.5%
advertising claims of the ticket exchange in the domestic feed” is misleading in the Commis-
same way, such as the claim that it sells tickets sion’s view. The average reader assumes that
that can no longer be purchased in other sales “feed” refers to the totality of all feed fed to cat-
channels. In addition, the high prices for the tick- tle in Switzerland. However, the so-called dry
ets on the ticket exchange also communicated matter, to which the percentage figure referred,
a scarcity of the respective tickets. Furthermore, only covers a part of all feedstuffs. Moreover, this
the ticket exchange infringed the UCA by using unit of measurement is not known to the aver-
price category descriptions and by publish- age addressee. The link between feed and the
ing seating plans which did not correspond to percentage figure given is therefore misleading.
the ones used by the circus itself. The ticket
exchange claimed that the respective informa- Biodiversity Claim
tion was not provided by the ticket exchange, In a decision of 19 January 2022, the Swiss Fair
but rather by the sellers of the tickets. The Court Competition Commission had to assess a bio-
rejected this argument and decided that it was diversity claim in connection with milk products.
the ticket exchange that determined the infor- The claim was “XY fosters and loves biodiversi-
192 CHAMBERS.COM
ty”. The Commission rejected the complaint. The tion from paragraph 1, indications on foodstuffs
respondent was able to credibly demonstrate may deviate from the facts if the deviating claim
that the grazing of meadows by dairy cows is demonstrably due to supply shortages as a
contributes to the promotion of biodiversity. The result of the COVID-19 pandemic (and if certain
average addressees could correctly place this other requirements are met).
statement in context and would also be aware
that dairy farming, if intensively practiced, can 1.8 Politics, Regulation and Enforcement
also have negative effects on nature. The political climate has not directly impacted
the regulation of advertising or enforcement.
CO2 Emissions Claim However, due to the current political climate,
In a decision of 15 September 2021, the Fair environmental claims have become an important
Competition Commission had to decide wheth- topic as companies try to emphasise the envi-
er advertising claims related to CO2 emissions ronmental or eco-friendly features of their prod-
were deceptive. The claim was “thanks to our ucts or services. At the same time, the risk of
modern fleet and efficient flight procedures, we being blamed for “greenwashing” has increased.
have reduced our CO2 emissions by more than
a third since 2000”. The complainant claimed The Swiss legislature has not yet reacted to
that the average addressee would understand this development. Environmental or ecological
the statements to mean that total CO2 emissions claims are legally assessed using the existing
had been reduced by ⅓ when comparing the provisions, in particular the general provisions
years 2000 and 2001. However, the statement on inaccurate, misleading, or deceptive claims
referred to passenger kilometres. The Commis- or certain provisions for specific products, such
sion rejected the complaint. It was declared suf- as chemical substances (see 1.1 Primary Laws
ficiently clearly that the statement of the reduc- and Regulation).
tion of CO2 emissions referred to passenger
kilometres. There was therefore no danger of It is therefore suggested that companies con-
misleading the public. sider the recommendations set out in the ICC
Framework for Responsible Environmental Mar-
The decisions of the Swiss Fair Competition keting Communications (2019) when planning
Commission regarding green marketing are in and implementing environmental marketing.
line with the rather liberal understanding of Swiss
case law as to the understanding of advertising
claims by the average addressee. 2. Advertising Claims
1.7 COVID-19, Regulation & Enforcement 2.1 Deceptive or Misleading Claims

The pandemic has generally not affected the According to the case law and literature, how
regulation of advertising and the enforcement the advertiser itself understands or interprets the
of advertising regulations. claims made in an advert is not decisive. Rather,
it is the content or meaning attributed to a claim
However, Article 12 paragraph 1bis of the Ordi- by the average addressee, taking into account
nance on Foodstuff was implemented due to the all the circumstances of the case.
pandemic and sets out that, by way of deroga-
193 CHAMBERS.COM
The understanding of the average addressee is In terms of content, the claim should contain a
determined in three steps: verifiable factual statement, which is assess-
able with evidence. Statements that cannot be
• determining the addressees to whom the objectively measured do not constitute a claim
information is directed (eg, age, social posi- in the sense of Article 3 paragraph 1 littera b of
tion, location); the UCA.
• clarifying the knowledge and skills of the
average addressee represented by the target Pure value judgements do not qualify as claims
group, including their education, language in the sense of Article 3 paragraph 1 littera b
skills, previous knowledge or understanding, of the UCA. However, whether the value judge-
low level of knowledge (eg, among young ment contains any factual statements at all must
people or children) and attention (eg, type of be assessed. The understanding of the average
claim, place of claim, advertising medium and addressee is, again, decisive.
advertising situation); and
• assessing how the average addressee (an 2.3 Substantiation of Advertising Claims
artificial construct) understands the claims. Claim substantiation depends on the nature of
the claim in question. Substantiation for mis-
Because the assessment of whether a claim is leading claims is different than substantiation
misleading, deceptive or inaccurate requires an for inaccurate claims.
objective understanding, “misleading or inaccu-
racy rates”, which are calculated empirically or As mentioned under 2.1 Deceptive or Mislead-
by means of surveys, are not used under Swiss ing Claims, it is decisive whether the (hypotheti-
law. cal) average addressee is deceived or misled, or
whether a claim is inaccurate. The standard is
Furthermore, the understanding of the average therefore, for example, not whether a substantial
addressee cannot be proven by means of repre- part of the addressees might be misled.
sentative surveys. This also results from the fact
that the determination of the objectified under- In ordinary proceedings, the court must be con-
standing is a legal question. However, surveys vinced, based on the evidence submitted, that
submitted by the claimant may nonetheless an infringement is highly probable (almost 100%
affect the assessment by the judges. probability). The courts assess all evidence with
full discretion. There is no hierarchy of evidence
2.2 Regulation of Advertising Claims under Swiss law.
The Unfair Competition Act, in particular Article
3 paragraph 1 littera b, may cover both express In cases of preliminary injunctions, the claimant
and implied claims. must convince the court that an infringement is
plausible. However, Swiss courts tend to apply
Whether an implied communication is a claim in a rather high standard (ie, it must also be highly
the sense of the UCA must be assessed based probable).
on the understanding of the average addressee
(see 2.1 Deceptive or Misleading Claims) in the
instance in question.
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2.4 Testing to Support Advertising 2.7 Environmental Claims

Claims Environmental or ecological claims are legally
There are requirements for tests set out by the assessed using the existing provisions, in par-
Swiss Fair Competition Commission. ticular the general provisions on inaccurate, mis-
leading, or deceptive claims or certain provisions
The Swiss Fair Competition Commission sets for specific products, such as chemical sub-
forth in its guidelines for tests the following stances (see 1.1 Primary Laws and Regulation).
important requirements (only available in Ger-
man, French and Italian). It is therefore suggested that companies con-
sider the recommendations set out in the ICC
• Independence – the testing institute must be Framework for Responsible Environmental Mar-
independent from the claimant/advertiser and keting Communications (2019) when planning
other third parties. and implementing environmental marketing.
• Competence – the testing institute must
have the necessary skills and experience to However, certain environmental claims are spe-
execute the tests. cifically regulated in connection with foodstuffs.
• Objectivity – the tests must not be deceptive, According to the Ordinance on Organic Farming
misleading or inaccurate; it is, for example, and the Labelling of Organically Produced Prod-
prohibited to ignore important data in the test ucts and Foodstuffs, products and foodstuffs
result. may only be claimed as “bio” or ecological if
they are produced under the requirements set
Only consumer-relevant properties should be out in the ordinance. For bio-claims in connec-
tested; the test criteria should be weighted tion with other products, the general rules of the
appropriately. Unfair Competition Act apply (ie, the claims must
not be deceptive, misleading, or inaccurate).
2.5 Human Clinical Studies
Whether human clinical studies are required In addition, Article 60 of the Ordinance on
depends on the type of claim. If advertising Chemical Substances prohibits the use of gen-
refers to clinical studies (eg, in advertising for eral, vague and undefined statements about the
medicinal products or cosmetics), respective health or environmental friendliness of a chemi-
studies must have been executed according to cal substance such as “non-toxic”, “not harm-
the rules of good clinical practice. ful to health”, “not harmful to the environment”,
“environmentally friendly”, “without emissions”,
The Federal Statute on Research with Human “ozone-friendly”, “biodegradable”, “ecological-
Beings, and the ordinances thereto, set out fur- ly safe”, “ecological”, “environmentally safe”,
ther requirements for such clinical studies. “nature-friendly” or “water-friendly” without any
further explanation. Claims regarding biodeg-
2.6 Representation and Stereotypes in radability must contain information regarding
Advertising the testing method used and the percentage of
There are no special laws in that regard. The degradability. Furthermore, it must be indicated
same general provisions as mentioned under which part of the product is degradable in case
1.1 Primary Laws and Regulation apply. the claim does not apply to the entire product.
195 CHAMBERS.COM
In its supervisory communication 05/2021 on “not harmful to the environment”, “environmen-

preventing and combating greenwashing, the tally friendly”, “without emissions”, “ozone-
Swiss financial market authority (FINMA), pro- friendly”, “biodegradable”, “ecologically safe”,
vides information on the main features of its “ecological”, “environmentally safe”, “nature-
expectations and the current state of practice friendly” or “water-friendly” without any further
in the management of collective investment explanation. Claims regarding biodegradability
schemes with a sustainability focus at fund and must contain information regarding the testing
institution level. In addition, it draws the attention method used and the percentage of degradabil-
of financial service providers offering sustaina- ity. Furthermore, it must be indicated which part
bility-related financial products to the potential of the product is degradable in case the claim
greenwashing risks in the advisory process and does not apply to the entire product.
at the point of sale.
Swissness Provisions
2.8 Other Regulated Claims The so-called Swissness provisions in the Trade-
There are types of claims that are subject to spe- mark Act (Articles 47 et seq) and the ordinances
cific rules or regulations. However, the respec- thereto govern the use of Swiss claims, Swiss
tive regulations are incorporated into different symbols and other Swiss indications of origin.
statutes and ordinances. Whether specific regu- The use of the Swiss flag is further regulated in
lations apply to concrete types of claims must the Coat of Arms Act.
therefore be assessed on a case-by-case basis.
The use of Swiss indications of origin must, in
Examples of such regulations are set out below. general, not be deceptive. Consequently, the
Swissness rules set out when a product is con-
The Tobacco Ordinance sidered to have been manufactured in Switzer-
Article 17 paragraph 3 of the Tobacco Ordinance land or when a service is sufficiently “Swiss”.
prohibits claims that give the impression that a With regard to foodstuffs, 80% of the content
particular tobacco product is less harmful than must be of Swiss origin. There are, however,
others (eg, “light”, “ultra-light” or “mild”). exceptions. Regarding industry products, at
least 60% of the manufacturing costs must arise
Health-Related Claims in Switzerland. The ordinance clarifies how to
These are generally prohibited for any products calculate the manufacturing costs.
other than medicinal products. However, Annex
14 of the Ordinance on Foodstuffs Information
includes specific permitted health-related claims 3. Comparative Advertising
for foodstuffs.
3.1 Specific Rules or Restrictions
Ordinance on Chemical Substances Comparative advertising is generally permitted
Article 60 of the Ordinance on Chemical Sub- as it improves market transparency and there-
stances prohibits the use of general, vague and fore competition.
undefined statements about the health or envi-
ronmental friendliness of a chemical substance However, comparative advertising is prohibited
such as “non-toxic”, “not harmful to health”, where it is executed in an inaccurate, mislead-
196 CHAMBERS.COM
ing, unnecessarily disparaging or unnecessar- imprisonment for up to three years or a monetary

ily imitating manner, or favours third parties in penalty of up to CHF540,000 (Article 23, UCA).
competition in a corresponding manner (Article
3 paragraph 1 littera e, UCA). In proceedings before the Swiss Fair Competi-
tion Commission, the Commission may decide
It is generally permitted to identify a competi- that the advertising is illegal and should therefore
tor by name in the advertising – as long as the cease or be removed. The Commission has no
advertising complies with Article 3 paragraph 1 authority over damage claims.
littera e of the UCA. However, identification of a
competitor may affect the assessment of wheth-
er a comparison is inaccurate, misleading, etc. 4. Social/Digital Media
Article 3 paragraph 1 littera e of the UCA even 4.1 Special Rules Applicable to Social
applies if no specific competitor is mentioned Media
(indirect comparison). It is sufficient that the There is no specific statute dealing with advertis-
advertiser’s own products and services are ing in social media.
compared, even implicitly, with other specified
or specifiable products and services. The general provisions, mentioned in 1. Legal
Framework and Regulatory Bodies, apply.
There are no different standards for comparative Furthermore, principle B.15 paragraph 1 of the
advertising. The understanding of the average Swiss Fair Competition Commission requires
addressee (see 2.1 Deceptive or Misleading that advertising for third parties in posts on
Claims) of the comparative advertising is deci- social media platforms must be recognisable as
sive. advertising.
3.3 Challenging Comparative Claims It should be noted that the addressees of adver-
Made by Competitors tising on digital media might differ from the
As discussed in 1. Legal Framework and addressees of advertising on other communi-
Regulatory Bodies, advertisers or competitors cation channels (see the discussion regarding
affected by comparative advertising may chal- the average addressee in 2.1 Deceptive or Mis-
lenge claims in civil litigation, criminal law pro- leading Claims). This was emphasised by the
ceedings, or with a complaint to the Swiss Fair Swiss Fair Competition Commission in deci-
Competition Commission. sions regarding influencer marketing on Insta-
gram. It mentioned that the addressees of the
In civil litigation, the claimant can request injunc- respective posts were the followers of the Ins-
tions, deletion or removal of illicit claims, and tagram account of the respondent. The average
damages (Article 9, UCA). addressee was described as follows: “a follower
decides for themselves which persons or com-
In criminal proceedings, the criminal authorities panies they want to follow. It can be assumed
will investigate and impose sanctions, which are that the average Swiss followers of the respond-
ent’s account are interested in the respondent’s
197 CHAMBERS.COM
sports history and life. A follower wants to learn ask them to stop the posting of third-party con-
more about the respondent, their career and life tent on the advertiser’s website or social media
by following the Instagram account. They are channels, and to have it removed.
more interested in and better informed about
the respondent than someone who is not a fol- In contrast, damage claims are generally not
lower of the account”. See, for example, appeal available against an advertiser for illicit third-par-
decision of 6 May 2020 (No 154/19 and 159/19), ty content. However, if the advertiser was noti-
reference No 14. fied about the illicit content and did not remove
it, the advertiser could become culpable (jointly
Finally, the understanding of the average with the main infringer) for the illicit post. In that
addressee is dependent on the context of the case, a damage claim might be possible.
advertising claim. The Swiss Fair Competition
Commission explicitly mentions this considera- 4.4 Disclosure Requirements
tion: “when assessing a commercial communi- There are generally no special requirements for
cation, the Commission takes particular account disclosure regarding advertising on social media
of the understanding of the relevant target group, as opposed to traditional media. However, the
the overall impression and the character of the implementation of the disclosure requirements
medium” (principle A.1 (3)). may differ. These must be assessed on a case-
by-case basis.
4.2 Key Legal Challenges
One of the main challenges facing advertising 4.5 Requirements for Use of Social
on social media is the fact that claims tend to be Media Platform
shorter than in other communication channels. There are no unique rules or regulations that
This increases the risk of an infringement of the apply to the use of the major social media plat-
general transparency principle. It also increases forms.
the risk of inaccurate, deceptive or misleading
advertising. However, principle B.15 of the Swiss Fair Com-
petition Commission makes concrete certain
In addition, it is a challenge that the advertiser general principles as set out in the UCA for
cannot control the context in which its claims are social media platforms (see 4.6 Special Rules
further distributed in social media. for Native Advertising).
Another challenge is the so-called “separation 4.6 Special Rules for Native Advertising
principle” (ie, that commercial communication Principle B.15 of the Swiss Fair Competition
must be recognisable as such and separated Commission sets out special rules regarding
from other communication). the separation of commercial communication
from editorial content. Commercial communica-
4.3 Liability for Third-Party Content tion must be recognisable as such and must be
Injunction and deletion claims are generally inde- strictly separated from editorial content. Com-
pendent of the culpability of the advertiser. Con- mercial communication must be flagged as
sequently, an infringed individual or legal entity sponsored/advertising or similar.
may initiate litigation against the advertiser and
198 CHAMBERS.COM
The Swiss Fair Competition Commission has is not sufficient to deal with these increased risks
applied principle B.15 in cases of native adver- and suggested legislative actions to the Federal
tising. Council.
4.7 Misinformation In November 2021, BAKOM issued a new report

There are no laws that specifically apply to on the activities of platform operators in the field
misinformation on topics of public importance. of public communication and opinion-forming.
However, the following regulations may cover The report explored the question of how the
certain aspects of misinformation/fake news. behaviour and use of platforms by the public
affects public communication in Switzerland
• If fake news or misinformation includes and the formation of opinion among the Swiss
defamatory or libellous statements, the population. The report concludes that existing
criminal code provisions dealing with the regulation in Switzerland is hardly up to the new
reputation of individuals can be triggered (see trends. The Federal Council has instructed the
Articles 173 and 174, Criminal Code). How- relevant Federal Department to show in a debate
ever, one of the difficulties regarding criminal paper by the end of 2022 whether social media
law actions is the fact that often social bots platforms can and should be regulated, and, if
are used for misinformation campaigns. It is so, how to regulate it. A broad discussion is then
difficult to identify the person responsible for planned on the question of the social integration
operating the social bots. and governance of intermediaries in Switzerland.
• The Unfair Competition Act does generally
not deal with influencing the political climate.
The UCA is only applicable if the misinfor- 5. Social Media Influencer
mation is directed against specific market Campaigns and Online Reviews
players.
• Social media content is generally not subject 5.1 Trends in the Use of Influencer
to the Federal Statute on Radio and Televi- Campaigns
sion (RTVG). However, social media appear- Decisions of the Swiss Fair Competition Com-
ances of certain media companies, such as mission regarding influencer marketing reveal a
the Federal Television Company (SRG), can rather liberal approach. The Commission decid-
be subject to the provisions of the RTVG (see ed that no specific disclaimer (“ad”, “sponsor-
Article 5a, RTVG). ing”, etc) is needed if the nature of a post as
• Fake news and misinformation in radio and commercial communication is recognisable
television infringes the principle of proper without such a disclaimer (see, for example,
presentation of facts and events (see Article 4 appeal decision of 6 May 2020 (No 154/19 and
paragraph 2, RTVG). 159/19), reference No 14; decision of the second
chamber of 6 May 2020, No 201/19).
In a report of 10 May 2017, the Federal Com-
munication Agency (BAKOM) came to the con- However, the Commission emphasised that a
clusion that there is an increased risk of misin- case-by-case approach is needed. The men-
formation, fake news and hate speech on social tioned decisions dealt with the posts of famous
media. BAKOM held that the existing legislation athletes and a famous influencer. According to
199 CHAMBERS.COM
the Commission, users are aware that posts of ness name; their goods; works or services; their
such individuals contain commercial communi- prices; the quantity in stock; the type of sales
cation. event; or about their business relationships, or
in a corresponding manner favours third parties
5.2 Special Rules/Regulations on in competition (highlighted by the authors)”, acts
Influencer Campaigns in an unfair manner.
Principle B.15 paragraph 2 of the Swiss Fair
Competition Commission specifically deals with An employee of a company or an influencer or
influencer marketing. agency who makes deceptive, misleading or
inaccurate claims in product reviews favours the
In addition to the general separation and trans- company in competition.
parency principle, it sets out that it is unfair to
use social media accounts in order to facilitate
commercial communication in favour of third 6. Privacy and Advertising
parties, unless the commercial nature of such
posts is made transparent. Individuals who 6.1 Email Marketing
receive sponsor donations or similar compen- Data Privacy Laws
sation for posts must make this commercial rela- The collection of email addresses is subject to
tionship transparent. the Swiss Data Protection Act (DPA). According
to Article 4 of the current DPA (Article 6, revised
5.3 Advertiser Liability for Influencer DPA), the data collection must be transparent (ie,
Content it must be recognisable to the data subject that
There is no case law in respect to advertisers email addresses are collected and processed for
being held responsible for content posted by marketing purposes).
their influencers. However, the applicable rules
in cases of influencer marketing are generally Information or notices are therefore required.
directed against the immediate infringer, (ie, the Unless the general data processing principles
influencer). In the cases decided by the Swiss (transparency, purpose limitation, proportional-
Fair Competition Commission (see 5.1 Trends in ity) are infringed, no extra conditions, such as
the Use of Influencer Campaigns), the respond- consent, need to be met based on data privacy
ent was always the influencer. laws (see below, however, regarding the UCA).
Consent is needed if email addresses are dis-
5.4 Misleading/Fake Reviews closed to third parties for marketing purposes
There is currently no case law regarding misin favour of that third party.
leading/fake reviews in Switzerland. The topic is,
however, discussed in the legal literature. Please note that the General Data Protection
Regulation (GDPR) might apply to entities with
The main provision dealing with misleading/ a registered seat in Switzerland (Article 3 para-
fake reviews is Article 3 paragraph 1 littera b of graph 2, GDPR). The GDPR might therefore
the UCA. The provision sets forth that anybody affect data collection and processing for email
who “makes false or misleading statements marketing. As this chapter focuses on Swiss law,
about themselves; their company; their busi-
200 CHAMBERS.COM
there will be no further evaluation of the GDPR In case of an infringement of Article 3 paragraph
requirements for email marketing. 1 littera o of the UCA, the affected individual may
file a complaint with the civil court and ask for an
Unfair Competition Act injunction and for removal of their mail address
Article 3 paragraph 1 littera o of the UCA deals from the mailing list (Article 9, UCA). Damage
with email marketing. It generally requires an claims are rare, as the claimant has to prove
opt-in of the recipient for email marketing. The effective financial damage. No such civil litiga-
recipient must also be informed about the option tion is on record. There are a few criminal pro-
to unsubscribe. Finally, the sender must indicate ceedings dealing with infringement of the UCA.
its correct name and address. Intentional infringement of Article 3 paragraph 1
littera o of the UCA is sanctioned with imprison-
There is an exemption from this general rule ment for up to three years or a monetary penalty
with respect to existing customers. Opt-in is not of up to CHF540,000 (Article 23, UCA). Prison is
necessary for email marketing to recipients in not realistic for such infringements, but penalties
cases where they have been informed prior to might be awarded. However, in the published
the first marketing mail about the opt-out right, case law, the criminal authorities have followed
and in cases where the emails contain informa- a rather liberal approach.
tion about the company’s own products or ser-
vices, which are similar to the ones purchased Swiss Fair Competition Commission
or ordered by the respective recipient. Principle C.4 paragraph 2 No 5 and paragraph
3 repeat Article 3 paragraph 1 littera o of the
Sanctions UCA. Consequently, complaints against illicit
The current Swiss Data Protection Act does not email marketing can also be filed to the Swiss
provide for monetary sanctions in the case of Fair Competition Commission. The Commission
an infringement; however, exceptions exist in a acts upon the request of competitors, recipients
few instances, which are not that relevant in con- of the marketing communication or consumer
nection with email marketing. However, the Fed- organisations. It can decide that the marketing
eral Data Protection and Information Commis- is illegal and must be stopped.
sioner (FDPIC) may investigate data processing
activities upon request and render non-binding The Swiss Fair Competition Commission decides
recommendations, such as to cease the data more cases of alleged illegal email marketing
processing. If the data controller is not willing than the civil courts and criminal authorities.
to accept the recommendation, the FDPIC may
file a complaint with the Swiss Federal Admin- 6.2 Telemarketing
istrative Court. Data subjects may also initiate In relation to internet-based telemarketing, the
civil litigation and ask for injunctions (see Article same rules as for email marketing apply (see 6.1
15, current DPA; Article 32, revised DPA and 1.5 Email Marketing).
Private Right of Action for Consumers). As the
court fees may be quite substantial, data sub- For other types of telemarketing, Article 3 para-
jects tend to file complaints to the FDPIC. graph 1 littera u of the UCA sets out that tele-
marketing to recipients with a respective opt-
out notice in the telephone registry is prohibited.
201 CHAMBERS.COM
Sanctions for this infringement are the same as • The data processing must be proportional
explained in 6.1 Email Marketing). (ie, only as much data as is necessary for the
purpose may be collected and processed).
It is, however, permitted to address recipients • Purpose limitation.
with an opt-out in the registry if they have opted-
in for specific telemarketing. An informed con- Consent is not needed. It is solely necessary if
sent is needed. the personality of the data subject is infringed
(Article 13, current DPA and Article 31, revised
Similar rules are included in the principle C.4 DPA).
paragraph 2 No 4 of the Swiss Fair Competition
Commission. The Commission has to deal with 6.5 Marketing to Children
illicit telemarketing on a regular basis. Advertising Regulations
Marketing to children is prohibited with regard
6.3 Text Messaging to certain products (alcohol, tobacco, etc). Oth-
Marketing communication spread by means of erwise, there are no specific rules. Yet, it should
text messaging is subject to the same rules as be taken into account that, for advertising that
email marketing. See 6.1 Email Marketing. applies to children, the standard for review will
be the average understanding of children.
6.4 Targeted/Interest-Based Advertising
General Remarks Data Privacy Laws
The general rules for targeted/interest-based With regard to the processing of personal data of
advertising are set out in the Data Protection Act. children, there are no specific regulations. How-
Whether additional rules apply must be assessed ever, the fact that the personal data of children is
on a case-by-case basis. If the effective commu- collected must be taken into account in connec-
nication should take place in the form of (person- tion with the transparency principle. Information
alised) email marketing, the specific regulations provided to children about data processing must
regarding email marketing would apply as well be written in a way that is understood by chil-
(see 6.1 Email Marketing). dren. If consent is needed for data processing,
not only is consent from the children needed,
Data Privacy Law but also approval from the parents in the case
The FDPIC has decided that web tracking or of minors.
retargeting tools generally include data pro-
cessing even though the tools only process IP
addresses. The general data processing princi- 7. Sweepstakes and Other
ples as set out in Article 4 of the current DPA Consumer Promotions
(Article 6, revised DPA) apply.
7.1 Sweepstakes and Contests
• The data subjects must be informed of the General Requirements
data processing (ie, the collected data and The following requirements must be complied
the purpose of the processing). with regarding the conduct of sweepstakes and
contests.
202 CHAMBERS.COM
Data privacy laws chase a product or conclude another contract

The processing of personal data in connection in order to participate) the respective sweep-
with sweepstakes or contests must comply with stakes and contests could be exempted from
the data privacy laws. If personal data submitted the approval obligation. Short-term promotional
by participants shall also be used for purposes lotteries and games of skill that do not involve
other than the conduct of the sweepstake/con- the risk of excessive gambling, and where par-
test, the participants must be informed about ticipation is exclusively through the purchase of
this other purpose and consent might be neces- goods or services offered at no more than mar-
sary – in particular for email marketing. ket price, are exempted from the Swiss Gam-
bling Act (Article 1 paragraph 2 littera d, Swiss
Unfair competition laws Gambling Act).
Unfair competition laws require transparent
information about the sweepstakes/contest, in 7.2 Contests of Skill and Games of
particular about eligibility for participation, the Chance
participation period, how to participate, the The Swiss Gambling Act distinguishes between
prize, etc. contests of skill and games of chance (lotteries).
Trade mark and copyright laws Contests of skill are defined as money games
Trade mark and copyright laws must be con- in which the winning chance depends entirely
sidered if third-party trade marks and pictures or mainly on the skill of the player (Article 3 lit-
are used, for example, for the description of the tera d Swiss Gambling Act). Money games are
prize if it is a third-party branded product. defined as games in which there is the prospect
of a monetary gain or other monetary advantage
Swiss Gambling Act (Geldspielgesetz) in return for a monetary stake or the conclusion
Sweepstakes and contests are most likely to be of a legal transaction (Article 3 littera a, Swiss
qualified as money games. The statute gener- Gambling Act).
ally requires money games to have an approval/
licence. However, certain sweepstakes and con- Games of chance or lotteries are defined as
tests are excluded from the Gambling Act (see money games which are open to an unlimited
below). or at least a high number of people and where
the result is determined by one and the same
Swiss Gambling Act random draw or by a similar procedure (Article
Sweepstakes and contests with free participa- 3 littera b, Swiss Gambling Act).
tion are most likely not within the scope of the
Swiss Gambling Act. Approval is therefore not Money games, including contests of skill and
needed. However, the free participation option games of chance, are subject to an approval or
must provide the participants with an equal win- licence (see Article 4, Swiss Gambling Act).
ning chance to that of paid participants. There
is, however, so far, no decision in this respect. However, and as mentioned in 7.1 Sweepstakes
and Contests, money games with free participa-
Even if participation in a sweepstake or contest tion and certain sweepstakes and contests are
were not free (ie, if the participants had to pur- exempted from these obligations. It is advisable
203 CHAMBERS.COM
and common practice to design promotional Small Money Games

sweepstakes and contests in a manner that Approval for small money games is granted by
exempts them from the approval and licence the cantonal authority in the canton in which the
duty. money game is executed (see Articles 32 et seq,
Swiss Gambling Act).
7.3 Registration and Approval
Requirements Sanctions
Games of chance and contests of skill for pro- The execution of money games without the nec-
motional purposes must generally not be regis- essary approval is subject to criminal sanctions.
tered or approved if designed in a proper man- Articles 130 et seq of the Swiss Gambling Act
ner (see 7.1 Sweepstakes and Contents and 7.2 distinguishes between large and small money
Contests of Skill and Games of Chance). games.
If such games or contests are not exempted The intentional illegal execution of large money
from the Swiss Gambling Act, an approval or games is sanctioned with imprisonment for up
licence is needed. to three years or a monetary penalty of up to
CHF540,000.
With respect to the approval process, the statute
distinguishes between large money games and The intentional execution of small money games
small money games. Large money games are without approval is sanctioned with a monetary
games of chances or contests of skill, which are penalty of up to CHF500,000.
executed in an automated manner, not only in
one Swiss canton or online. Other contests and 7.4 Loyalty Programmes
games of chance are small money games. Unfair Competition Laws
There is no special statute dealing with loyalty
Large Money Games programmes. Such programmes must therefore
Large money games must be approved by the comply in general with the Unfair Competition
inter-cantonal money game authority (Article 21, Act.
Swiss Gambling Act). Currently, the inter-can-
tonal authority is the Comlot. However, a new Which provisions in the Unfair Competition Act
authority will soon be established, the inter- apply must be assessed on a case-by-case
cantonal money game supervisory authority basis.
(GESPA).
Data Privacy Laws
Approval is subject to certain requirements, such Data processing in connection with loyalty pro-
as a registered seat in Switzerland, good reputa- grammes must comply with the Swiss Data Pro-
tion, financial stability, etc (Articles 22 and 24 et tection Act, in particular with the general princi-
seq, Swiss Gambling Act). The main issue is that ples on data processing (Article 4, current DPA
the cantons may determine the maximum num- and Article 6, revised DPA).
bers of organisers for money games. This means
that an organiser might not receive an approval
even if it complies with all requirements.
204 CHAMBERS.COM
7.5 Free and Reduced-Price Offers Additional Requirements

Prohibition against Deceptive or Misleading Reduced-price campaigns must also comply
Price Declarations with Article 3 paragraph 1 littera f of the UCA.
Article 3 paragraph 1 littera b of the UCA requires Products and services must not be offered under
that information about prices must not be inac- the cost price repeatedly and in a manner that
curate, deceptive or misleading. deceives the consumer about the performance
of the advertising company or competitors.
Furthermore, Article 18 of the UCA sets forth that
the declaration of price reductions in a mislead- Finally, free offers must comply with Article 3
ing manner is unfair. paragraph 1 littera g of the UCA if it is a premi-
um offer – purchase one product X and receive
Ordinance on Price Declaration another product for free (ie, as premium). The
Article 18 of the UCA is concretised by the Ordi- premium must not deceive the consumer about
nance on Price Declaration (PBV). the effective value of the offer. There is no
deception if the value of the main product and
Reduced-price offers are subject to several the premium are known or declared
requirements as set out in Articles 16 et seq of
the PBV. 7.6 Automatic Renewal/Continuous
Service Offers
The ordinary price, as well as the reduced one, Generally, such provisions are subject to con-
must be indicated. tractual freedom.
It must be specified for which products the Mandatory legal provisions and the following
reduced price is applicable. However, specifi- restrictions must, however, be observed.
cation is not needed if the reduced price applies
to several products, product groups, or entire Contractual relationships between a marketer
assortments. In that case, it must solely be and a consumer are often governed by gen-
specified for which categories of groups the eral terms and conditions. Based on Article 8
reduced price applies (eg, “50% off on all cof- of the UCA, general terms and conditions can
fee capsule products”). be subject to ex post judicial control. This con-
trol applies the so called “rule of unusuality”: a
The duration of the reduced-price campaign is clause, the content of which the approving party
limited. A reduced-price campaign may only last did not expect and could not reasonably have
for a maximum of two months. The campaign expected under the circumstances, shall not be
period is calculated in the following way: in the valid. This can be the case if a clause is unusual
case that the ordinary price prior to the reduced and unrelated to the business. According to the
price was charged for two months, the reduced Federal Court, automatic contract renewals are
price may last for one month (50% of the period not unusual per se. However, whether a provi-
for which the ordinary price was charged prior sion is unusual is determined from the point of
to the campaign). This also means that a new view of the approving party at the time of the
reduced-price campaign for the same product contract conclusion.
cannot immediately follow another one.
205 CHAMBERS.COM
Furthermore, Article 27 of the Swiss Civil Code The stake may not exceed CHF200. The total of
and Articles 19 and 20 of the Code of Obliga- all bets per day is limited to CHF200,000. The
tions must be taken into account for both gen- organiser requires a cantonal permit. There is
eral terms and conditions and individual agree- no entitlement to these licences, the cantonal
ments. These provisions prevent an excessive authority can grant them, but it does not have
contractual binding of a contractual party. This to (see 7.3 Registration and Approval Require-
could become relevant in the event of continued ments).
renewal of a contract and the associated obliga-
tion that a consumer enters into. 8.2 Special Rules & Regulations
Advertising must not be intrusive or misleading
A parliamentary initiative to restrict automatic (Article 74, Gambling Act). This applies, in par-
renewal of service contracts has been debated ticular, to advertising messages that create and
in the parliament. However, the Council of State reinforce a false impression in the minds of play-
rejected an amendment of the Swiss Civil Code. ers, and to advertising in a form or at a time that
is chosen in such a way that the player cannot
think about it in peace.
8. Sports Betting/Gambling
Furthermore, it is prohibited to direct advertising
8.1 Legality & General Regulatory to minors or barred persons or to advertise a
Framework money game that is not licensed in Switzerland
Sports betting, as well as other forms of gam- – this is, in particular, important for the adver-
bling, are permitted under rather restrictive tising of foreign sports betting offers to Swiss
requirements. recipients. Advertising directed personally to
players via electronic channels (eg, email, SMS,
The Swiss Gambling Act distinguishes between and messaging systems in certain applications
large and small money games (see 7.3 Registra- or social networks) must offer an easy way to opt
tion and Approval Requirements). Large money out of the advertising or to unsubscribe from the
games include sports betting and games of skill address list.
that are automated, inter-cantonal or online.
Small money games are, for example, sports
betting and small poker tournaments (with small 9. Web 3.0
stakes and winning possibilities).
9.1 Cryptocurrency and Non-fungible
Large sports betting may in principle only be Tokens (NFTs)
offered by Swisslos and Lotterie Romande. There are no specific rules or regulations regard-
ing advertising, marketing or sale of cryptocur-
Small sports betting, provided it is held on the rency and/or NFTs, but rather the application
same premises as the sports event in question, of rules and regulations depends on the legal
may also be offered by clubs and companies. qualification of the crypto-asset in question. In
In addition, sports betting must be organised particular, if a crypto-asset qualifies as a secu-
locally according to the totalisator principle; rity, the rules regarding offering and advertising
this means the bettors bet among themselves. of the Financial Services Act (FinSA) and the
206 CHAMBERS.COM
Financial Service Ordinance (FinSO) have to be tion for the promotion of a product, but their
observed, specifically Articles 35 et seq and Arti- followers are led to believe that it is a person-
cle 68 of the FinSA. In certain special cases, if a al recommendation or an objective product
crypto-asset would qualify as a unit of a collec- review).
tive investment scheme, then the specific rules
of the Collective Investment Scheme Act (CISA) Furthermore, the UCA entails rather strict provi-
apply. sions on promotional raffles/lotteries (eg, Arti-
cle 3 paragraph 1 littera t, UCA) and aggressive
However, in any case, the rules of the UCA have product marketing activities, which also apply
to be adhered to. to the metaverse.
9.2 Metaverse Even though advertising in the metaverse is

There are no specific rules or regulations regard- widely discussed in legal articles, it has not been
ing advertising within the metaverse. However, discussed by the authorities or the legislature.
the regulations which apply to advertising in This might change if the metaverse transitions
general, also apply to advertising activities in from a topic of discussion to a more concrete
the metaverse. In this regard, the UCA and the trend. According to trend barometers, this might
guidelines on fairness in commercial communi- happen in the course of 2023.
cation provided by the Swiss Commission for
Fairness (SCF) are particularly relevant. 9.3 Digital Platforms
Switzerland has not implemented any specific
According to the UCA and the above-mentioned marketing or advertising laws to account for the
guidelines, commercial communication (adver- rise of digital advertising platforms and the use
tising) shall not: of adtech. However, the provisions of the UCA
are worded rather broadly and cover many of the
• disparage or deliberately ridicule other com- issues associated with new forms of advertising.
panies, persons, products or commercial
activities; In addition to the UCA, the DPA is relevant to
• present a person or organisation as more personalised marketing activities. The new
favourable (than others) by communicating DPA, which is in many aspects similar to the
inaccurate or misleading representations or EU GDPR, will enter into force on 1 Septem-
statements; ber 2023. In contrast to the EU GDPR, there is
• imitate other (pre-existing) products or ser- no need for a specific legal basis (eg, consent)
vices in a way that might lead to confusions for all processing activities. This also applies to
with said pre-existing products or services; profiling (by private companies or persons) if the
• use inaccurate or unobjective test results in profiling does not constitute a “high risk” for the
order to promote a product or service; rights and freedoms of the data subject. Even if
• use inaccurate or unlawful indications of ori- the data subject’s consent is not required in all
gin (eg, Swiss cross for products that do not circumstances, many requirements of the DPA
originate from Switzerland); and must be respected when processing personal
• disguise the commercial purpose of advertis- data for marketing activities. For instance, infor-
ing (eg, if an influencer receives a remunera- mation and data security requirements, purpose
207 CHAMBERS.COM
limitation, data minimisation requirements and attractive sandy beach. It is also prohibited to
the requirement of keeping records of process- display spirit ads in specific locations, such as
ing activities. Moreover, transfers of personal on public transport. Finally, it is also prohibited
data to countries with an inadequate level of to distribute spirits as prizes in a sweepstake.
data protection (such as the USA) are critical
and their legal compliance must be assessed Article 1 of the Federal Statute on Banking Insti-
on a case-by-case basis. tutes sets out that the term “bank” or “banking
institute” must only be used in the advertising
The Federal Data Protection and Information (and commercial correspondence in general)
Commissioner has not yet had to decide on of institutes, which are subject to the statute
adtech solutions. In other assessments regard- and supervised by the Swiss Financial Services
ing advertising and data protection laws, the Supervisory Authority. Article 4quater prohibits
Federal Data Protection and Information Com- misleading or intrusive advertising by the Swiss
missioner had the tendency to follow decisions seat of a banking institute. Article 3 of the Ordi-
by EU Data Protection Authorities (for example, nance on Banking Institutes sets out that only
regarding the use of cookies and tracking tools). institutes with a banking licence are permitted
to advertise the acceptance of deposits from the
public.
10. Product Compliance
Article 20 of the Federal Statute on Chemical
10.1 Regulated Products Substances sets out that the advertising for dan-
The Ordinance on Beverages sets forth the cri- gerous chemicals or chemical mixtures must not
teria to be complied with by specific beverages mislead the public about the danger of the prod-
– ie, it determines when a beverage may be mar- ucts or lead to an improper use. Article 45 of
keted as mineral water, fruit water, alcohol-free the Ordinance on Chemicals prohibits the use of
beer, etc. It also sets out certain restrictions for specific terms, such as “non-toxic”, “eco-friend-
the design of the labels, marketing materials, and ly”, in the advertising for such products. Article
for the use of geographic origins (eg, whiskey). 75 of the Ordinance contains further advertising
restrictions, in particular regarding bio-claims.
The Federal Statute on Spirits (Alcohol Stat-
utes) contains two provisions dealing with (and Article 31 of the Federal Statute on Medici-
restricting) the marketing and advertising of nal Products and Medical Devices sets out as
spirits. Article 41 sets out that spirits may not a principle that it is permitted to advertise all
be sold and marketed to consumers under 18 types of medicinal products if the advertising is
years, that below-cost prices are prohibited, that directed exclusively at persons who prescribe or
free samples to an unspecified consumer cir- dispense them. It is also permitted to advertise
cle is prohibited, etc. Article 42b contains direct non-prescription medicinal products to the gen-
advertising restrictions, such as the requirement eral public. Article 32 deals with unlawful adver-
that advertising for spirits must only contain tising for medicinal products. Further details on
information, which directly relates to the prod- the advertising of medicinal products are includ-
uct or its features – it is, for example, prohibited ed in the Ordinance on Advertising of Medicinal
to include in advertising for spirits pictures of an Products. The Ordinance differentiates between
208 CHAMBERS.COM
advertising to specialists and advertising to the Articles 17 et seq of the Ordinance on Tobac-
public. co Products prohibits the use of misleading or
deceptive claims in advertising. Furthermore, it
Article 12 of the Ordinance on Foodstuffs stipu- prohibits advertising tobacco products to con-
lates a general prohibition against misleading sumers under 18 years old, in specific locations
and deceiving consumers in the advertising of (eg, close to schools) or on specific products
foodstuffs. Article 12 paragraph 3 of the Ordi- (eg, on advertising material which is distributed
nance prohibits the use of specific claims and to minors). In addition, the industry has estab-
information in advertising, such as health-relat- lished its own advertising guidance, which
ed claims (with certain exceptions), deceptive expand on the advertising restrictions set out
claims about the origin of a foodstuff, etc. in the Ordinance. Such advertising self-regula-
tions also exist regarding e-cigarettes as well as
Since the individual substances of cannabinoids oral tobacco or nicotine products. Advertising
as well as hemp extracts containing cannabi- of tobacco products and e-cigarettes is further
noids have historically not been consumed to restricted by some cantonal laws.
any significant extent in connection with food-
stuffs, products constituted in this way are regu- A new Federal Statute on Tobacco Products,
larly to be qualified as novel food. Advertising for which is expected to enter into force in the
novel food is subject to the same requirements summer of 2023, will cover e-cigarettes, oral
as set out for other foodstuff above. Please note products with tobacco or with nicotine only, and
that certain products containing CBD (permit- “heat not burn” products. The new statute con-
ted are only products with less than 1% THC) tains advertising restrictions for all of these prod-
can also be qualified as utility articles, such as ucts, such as no advertising and sale to minors,
pouches (snus) with CBD or cosmetic articles. no deceptive claims, etc. Certain sales activities,
For such utility articles, the advertising must not such as price-offs and raffles, shall be prohib-
be deceptive, misleading or inaccurate and the ited. The advertising related provisions are the
advertising must not contain any health claims most contested provisions in this new statute.
(Article 18, Federal Statute on Foodstuff and
Utility Articles). 10.2 Other Products
The most relevant specific rules for products
have been mentioned. Advertising for other
products or services must be assessed on a
case-by-case basis.
209 CHAMBERS.COM
MLL Legal is one of the most reputable inter- a first stop for issues around digitalisation and
national law firms in Switzerland. The firm’s advertising in Switzerland. Both Swiss and in-
experienced and dynamic lawyers offer innova- ternational clients, from corporations and banks
tive and solution-focused services. With offices to private families, appreciate the accessibility
in Zurich, Geneva, Zug and Lausanne, MLL is and involvement of partners at MLL in repre-
present in the key Swiss economic centres. senting their interests. The firm’s experience in
The firm has one of the strongest and largest serving clients from across a variety of sectors
IP/ICT teams in Switzerland and its team unites has given its lawyers a practical understanding
some of the most reputed experts in all legal of business that ensures delivery of legal advice
aspects related to online and offline advertis- that works in a commercial context.
ing. Its strong practice in data privacy makes it
Authors
Lukas Bühlmann heads MLL’s Michael Reinle is a partner and
ICT & Digital practice group. He a member of MLL’s ICT & Digital
has wide-ranging experience in practice group. He is particularly
assisting with contractual and experienced in advising clients
regulatory implementation of with regard to the protection of
cross-border transactions and their IP in the context of the
business concepts in the digital economy. digital economy. In addition, Michael is an
Lukas is also a member of the International Bar expert on internet-related advice in
Association (Past-Chair Product Law & e-commerce and advertising, including direct
Advertising Committee) as well as ITechLaw. marketing and digital advertising, with a
He serves as a board member of the Swiss special focus on regulated industries. He
Direct Marketing Association responsible for advises clients regarding sweepstakes and
regulation, self-regulation and data protection, contests on a regular basis. Michael is a
legal counsel to the Swiss Distant Selling regular speaker on data privacy and
Association as well as a media expert with the advertising law as well as new technologies.
Swiss Commission for Fair Advertising. He has
particular experience in luxury goods, new
technology, advertising, healthcare, media and
retail.
210 CHAMBERS.COM
Michael Schüepp has been a

member of Lukas Bühlmann’s
team since 2009 and has sound
experience in advising
companies on issues related to
unfair competition and
advertising on the internet. He is also an expert
on data protection in the e-commerce,
advertising, health and public transport
industries. Furthermore, Michael is regularly
involved in advice related to the e-commerce
activities of manufacturers and retailers and
has particularly strong know-how in the legal
aspects of the cross-border online trade of
consumer goods. He regularly publishes on
legal trends and developments in his fields of
interest.
MLL Meyerlustenberger Lachenal

Froriep Ltd.
Schiffbaustrasse 2
P.O. Box
8031 Zurich
Switzerland
Tel: +41 58 552 04 80

Email: lukas.buehlmann@mll-legal.com
Web: www.mll-legal.com
211 CHAMBERS.COM
SWITZERLAND Trends and Developments

Contributed by:
Lukas Bühlmann, Michael Reinle and Michael Schüepp
MLL Legal see p.215
Overview revise the Swiss Data Protection Act (DPA) and

Even though the Swiss authorities and the Swiss published a draft at the end of 2016. After con-
legislature are less active than their counterparts troversial debates, the Parliament passed the
in the EU, there have been interesting develop- final version of the future DPA at the end of Sep-
ments in Swiss advertising and marketing law tember 2020. One of the issues that remained
recently. This article will start by highlighting a controversial right until the end was the regu-
selection of important legislative changes. These lation of profiling, which is of considerable rel-
include an important revision of the Price Indica- evance to marketing. In June 2021, the Federal
tion Ordinance and the reform of the Data Pro- Council published a draft of the implementing
tection Act. Subsequently, a notable new court regulations. The draft has been the subject of
decision is presented, which deals with the topic considerable debate, in particular the provisions
of misleading advertising claims. that should provide guidance regarding the data
security measures to be implemented by data
Current Legislative Changes controllers. Non-compliance with the required
Price Indication Ordinance data security measures can be sanctioned with
On 1 July 2022, a revision of the Price Indica- a penalty. Interested industry associations and
tion Ordinance entered into force. The revision companies can currently file their comments on
clarifies certain topics, which are relevant for the the draft to the Federal Council. The Federal
online price indication. Council announced on 31 August 2022 that the
revised DPA will enter into force on 1 September
Each price announcement must always include 2023. It is important to mention that there will be
all surcharges that cannot be freely selected and no implementation period, which means that all
thus correspond to the actual price to be paid. new provisions will be immediately in force and
The indication of such surcharges (eg, service enforceable on 1 September 2023. It is therefore
fees) only at the end of the ordering process is important that companies start the implementa-
not permitted. Surcharges that cannot be freely tion project early enough.
selected must be integrated into the stated price
from the outset. Several new duties and stricter sanctions
The Data Protection Act is significant for all com-
It has also been clarified that shipping costs still panies in the marketing sector and will continue
do not have to be integrated into the stated price. to have a very wide scope of application. How-
They may continue to be shown separately. ever, one of the most remarkable new features
is the introduction of direct criminal sanctions
Swiss Data Protection Act against natural persons responsible for data pro-
Following the adoption of the EU General Data cessing activities up to a maximum amount of
Protection Regulation (GDPR) in 2016, the Swiss CHF250,000. This is provided instead of admin-
government launched a legislative process to istrative sanctions against corporations and
212 CHAMBERS.COM
legal persons, as is the case in EU law. Together New rules for profiling
with the extension of the powers of the Federal As mentioned in the introduction to this section
Data Protection Commissioner, this intimidating on the Swiss data protection landscape, the
sanctions regime is intended to improve enforce- regulation of profiling was particularly contro-
ment. In addition to the expansion of the rights of versial in Parliament. In the future, the definition
the data subjects, numerous duties established of profiling will be the same as under the EU
by the EU GDPR have also been adopted, such GDPR, although there are special requirements
as the duties to keep a record of data processing for high-risk profiling. Thus, in the future, Swiss
activities, to notify data breaches and to con- data protection law will define profiling as fol-
duct data protection impact assessments. For lows: “any form of automated processing of
companies domiciled abroad, it should also be personal data consisting of the use of personal
emphasised that, under certain conditions, there data to evaluate certain personal aspects relat-
is an obligation to appoint a legal representative ing to a natural person, in particular to analyse
in Switzerland. or predict aspects concerning that natural per-
son’s performance at work, economic situation,
Stricter information requirements health, personal preferences, interests, reliability,
The extension of information duties is certainly behaviour, location or movements”.
of great practical importance for the implemen-
tation of advertising campaigns and interaction The revised DPA qualifies as high-risk profiling
with data subjects for marketing purposes. In “profiling which involves a high risk to the per-
addition to the identity and contact details of sonality or fundamental rights of the data sub-
the controller, information must, at least, be project, by creating a link between data that allows
vided on the purpose of the processing and, in an assessment of essential aspects of the per-
the case of the transfer of data, the categories of sonality of a natural person”.
recipients and any foreign countries to which the
data is transferred. This also applies in the case The debates in Parliament have led to some
of obtaining data from the databases of other uncertainty as to whether high-risk profiling can
companies or publicly accessible sources. In the still be permitted without consent. Even if the
case of such indirect collection of data, informa- question will probably still lead to discussions
tion must also be provided on the categories of in the literature and jurisdiction, as things stand
data and it must be noted that in many cases it at present, it can be assumed that Parliament
will not be sufficient to simply display a privacy does not want to deviate from the established
policy on the website. Rather, the data subjects principles with regard to (high-risk) profiling. For
will have to be actively informed. Although the private controllers, consent or other justifica-
new law also contains exceptions to the information will therefore only be required in the case of
tion requirements, careful consideration must be data processing that violates personality rights.
taken when invoking these exceptions, because However, depending on the type and scope of
the violation of the information duties is subject (high-risk) profiling, this may be the case rela-
to criminal sanctions. tively quickly, and thus consent or other justifica-
tion may be required. Since there is often great
uncertainty about any justification based on an
overriding interest, obtaining consent is likely to
213 CHAMBERS.COM
be recommended in many cases in the future channels. The Court held that the claim “sold
as well. This will apply all the more if profiling out” could be understood by the users in the
is related to email marketing, where, due to the specific situation to mean that tickets are not
special regulation in the law against unfair com- only sold out on the ticket exchange, but also in
petition, consent (opt-in) must, in principle, be official sales channels. The Court considered the
obtained anyway. In order for consent to serve other advertising claims of the ticket exchange
as a safeguard and justification in the case of in the same way, such as the claim that it sells
high-risk profiling, consent must be explicit tickets that can no longer be purchased in other
under the revised DPA. This means that higher sales channels. In addition, the high prices for
standards apply with regard to the validity of the tickets on the ticket exchange also commu-
consent, although the details are controversial. nicated a scarcity of the tickets.
Important Court Decisions Furthermore, the ticket exchange infringed the

In recent months, the Federal Supreme Court UCA by using price category descriptions and
has handed down the following ruling with by publishing seating plans that did not corre-
regard to Swiss advertising and marketing law. spond to the ones used by the circus itself. The
ticket exchange claims that the respective infor-
Lawfulness of advertising claims on a ticket mation was not provided by the ticket exchange,
platform but rather by the sellers of the tickets. The Court
Viagogo II rejected this argument and decided that it is the
In its decision of 27 October 2021, the Federal ticket exchange that determines the information
Supreme Court had to decide whether cer- to be provided by the sellers and to be displayed
tain marketing claims and activities by a ticket on the platform to a rather extensive degree.
exchange platform constituted deceptive adver-
tising in the sense of Article 3 paragraph 1 lit b of Moreover, the ticket exchange violated the UCA
the UCA (BGer 4A_314/2021). It must be empha- by increasing the price of the tickets gradually
sised that the Federal Supreme Court did only during the order process without displaying the
assess the claims which were brought forward effective total price in a transparent manner
in the appeal. and without granting the user more than three
minutes to take the purchase decision. In that
The case dealt with tickets for a circus show. The regard, the Court held that the UCA was also
claimant was the operator of the circus for which infringed by displaying claims and pop-up ban-
the tickets were offered on the ticket exchange. ners which suggested a substantial demand or
The Federal Supreme Court upheld the decision a rare offer (eg, “there are two other users in
of the lower court that the ticket exchange plat- the waiting list for these tickets”) without men-
form infringed Article 3 paragraph 1 lit b of the tioning that these statements only apply to the
UCA in several ways. ticket exchange and not to other sales channels.
Finally, the countdown displayed to finalise the
The ticket exchange platform infringed the UCA order process was less than ten minutes.
by claiming that certain shows of the circus were
already or almost sold out even though there
were still tickets available in the official sales
214 CHAMBERS.COM
MLL Legal is one of the most reputable inter- a first stop for issues around digitalisation and
national law firms in Switzerland. The firm’s advertising in Switzerland. Both Swiss and in-
experienced and dynamic lawyers offer innova- ternational clients, from corporations and banks
tive and solution-focused services. With offices to private families, appreciate the accessibility
in Zurich, Geneva, Zug and Lausanne, MLL is and involvement of partners at MLL in repre-
present in the key Swiss economic centres. senting their interests. The firm’s experience in
The firm has one of the strongest and largest serving clients from across a variety of sectors
IP/ICT teams in Switzerland and its team unites has given its lawyers a practical understanding
some of the most reputed experts in all legal of business that ensures delivery of legal advice
aspects related to online and offline advertis- that works in a commercial context.
ing. Its strong practice in data privacy makes it
Authors
Lukas Bühlmann heads MLL’s Michael Reinle is a partner and
ICT & Digital practice group. He a member of MLL’s ICT & Digital
has wide-ranging experience in practice group. He is particularly
assisting with contractual and experienced in advising clients
regulatory implementation of with regard to the protection of
cross-border transactions and their IP in the context of the
business concepts in the digital economy. digital economy. In addition, Michael is an
Lukas is also a member of the International Bar expert on internet-related advice in
Association (Past-Chair Product Law & e-commerce and advertising, including direct
Advertising Committee) as well as ITechLaw. marketing and digital advertising, with a
He serves as a board member of the Swiss special focus on regulated industries. He
Direct Marketing Association responsible for advises clients regarding sweepstakes and
regulation, self-regulation and data protection, contests on a regular basis. Michael is a
legal counsel to the Swiss Distant Selling regular speaker on data privacy and
Association as well as a media expert with the advertising law as well as new technologies.
Swiss Commission for Fair Advertising. He has
particular experience in luxury goods, new
technology, advertising, healthcare, media and
retail.
215 CHAMBERS.COM
Michael Schüepp has been a

member of Lukas Bühlmann’s
team since 2009 and has sound
experience in advising
companies on issues related to
unfair competition and
advertising on the internet. He is also an expert
on data protection in the e-commerce,
advertising, health and public transport
industries. Furthermore, Michael is regularly
involved in advice related to the e-commerce
activities of manufacturers and retailers and
has particularly strong know-how in the legal
aspects of the cross-border online trade of
consumer goods. He regularly publishes on
legal trends and developments in his fields of
interest.
MLL Meyerlustenberger Lachenal

Froriep Ltd.
Schiffbaustrasse 2
PO Box
8031 Zurich
Switzerland
Tel: +41 58 552 04 80

Email: lukas.buehlmann@mll-legal.com
Web: www.mll-legal.com
216 CHAMBERS.COM
CHAMBERS GLOBAL PRACTICE GUIDES
Chambers Global Practice Guides bring you up-to-date, expert legal

commentary on the main practice areas from around the globe.
Focusing on the practical legal issues affecting businesses, the
guides enable readers to compare legislation and procedure and
read trend forecasts from legal experts from across key jurisdictions.
To find out more information about how we select contributors,

email Katie.Burrington@chambers.com
practiceguides.chambers.com

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CHAMBERS GLOBAL PRACTICE GUIDES

Advertising & Marketing

Disclaimer: The information in this guide is provided for general reference

GPG Director Katie Burrington

Advertising and Marketing: 2022 in Review demic, particularly as advertisers embraced

Dark patterns dynamic and pricing discrimination, and the

Contributing Editor Assisted by

Tel: +1 416 863 1221

1. Legal Framework and Specific Legislation

operators would be prohibited (albeit subject to Misleading Commercial Practices towards

In addition to the general “unfairness” prohi- Grey list

2.5 Human Clinical Studies Self-Regulation

2.6 Representation and Stereotypes in In addition, a governmental commission on envi-

Self-Regulation Cosmetic Products

3.3 Challenging Comparative Claims advertisements that are part of an information

Quality Control As mentioned under 4.2 Key Legal Requirement

4.6 Special Rules for Native Advertising 5.2 Special Rules/Regulations on

• any networks, agencies, platforms and other 6. Privacy and Advertising

• the ELC, in particular Articles VI.110 to Right to Opt-Out

8. Sports Betting/Gambling • with newsagents, as a secondary activity; and

According to the Act, a bet is a game of chance Participant Protection

Locations to Place Bets 8.2 Special Rules & Regulations

Self-Regulatory Code • are not issued or guaranteed by a central

Future Legal Developments Registration obligation for cryptocurrency

9.3 Digital Platforms Self-regulation

Self-regulation Associations (EFPIA) have issued such soft-

Sebastian Tytgat is a senior Elisabeth Dehareng is a partner

Hannah Matthys is a junior

Tel: +32 2 639 36 11

Law and Practice

Bosnia & Serbia

Contributed by: Herzegovina

bh.legal - Law Office Mirna Milanović-Lalić see p.64 Italy Montenegro

1. Legal Framework and • Electronic Legal and Commercial Transac-

• an order to issue a corrective statement to their owners/shareholders may also be respon-

on free evaluation of evidence. The competent • advertising of medical devices must be in

provision; 2.6 Representation and Stereotypes in

4.4 Disclosure Requirements must not encourage potentially harmful behav-

6.4 Targeted/Interest-Based Advertising ing minors; therefore, advertising messages

Organisers must not conduct promotional

The documentation to prove such payment has

8. Sports Betting/Gambling 9. Web 3.0

8.1 Legality & General Regulatory 9.1 Cryptocurrency and Non-fungible

9.3 Digital Platforms

10.2 Other Products

bh.legal – Law Office Mirna

Tel: + 387 33 558 565

Law and Practice Ecuador

1. Legal Framework and Ethics (CFM Resolution No 2,145/2016) and

1.5 Private Right of Action for Discussions related to advertising of products

Therefore, it is recommended that advertisers • they must correspond to actual practices

On the other hand, according to the applicable 3. Comparative Advertising

If an advertiser’s platform is aimed at advertising 4.7 Misinformation

5.4 Misleading/Fake Reviews 6.2 Telemarketing

The advertiser must also comply with the LGPD,

7.3 Registration and Approval 7.6 Automatic Renewal/Continuous

Nevertheless, as long as this situation – automat- 9. Web 3.0

tising of these products should be done, includ- 10.2 Other Products

There are also several resolutions issued by

Inglez, Werneck, Ramos, Cury e

Tel: +55 11 4550 5002

Trends and Developments

Inglez, Werneck, Ramos, Cury e

Tel: +55 11 4550 5002