Amended Chinese Advertising Law Provides New Tool to Protect Privacy

On April 24, 2015, China amended its Advertising Law for the first time since its initial promulgation in 1994.  The amended Advertising Law (the “Amended Law”) will take effect on September 1, 2015.  In the absence of a comprehensive data protection law in China, the Amended Law introduces certain provisions addressing data and privacy issues, in addition to existing data privacy rules which are scattered in various laws and regulations.

Below are some noteworthy changes introduced in the Amended Law in connection with the data protection:

• No advertisement may, among other things, compromise personal or property safety, or divulge private personal information (Article 9).  Any advertiser violating the rule will be subject to an order to stop advertisements and a monetary penalty ranging from RMB 200,000 to RMB 1,000,000 (approximately US$32,000 to $161,000).  Furthermore, the advertiser’s business license may even be revoked if it commits a serious violation of this rule.
• Without the recipients’ consent or request, no entity or individual may send advertisements to their residences or vehicles, or send them advertisements by electronic means.  The law is, however, silent on the nature of consent required (e.g., whether consent may be opt-in, opt-out, or implied through context).  Furthermore, advertisements sent by electronic means must explicitly state the sender’s true identity and contact details, and provide recipients with unsubscribe facilities (Article 43).  Any advertiser violating the rule will be subject to a cease-and-desist order and a monetary penalty ranging from RMB 5,000 to RMB 30,000 (approximately US$800 to $4,800).
• Pop-up advertisements must contain clearly-indicated “close” signs to ensure that the user may close the advertisement by just “one click” (Article 44).  Any advertiser violating the rule will be subject to a rectification order and a monetary penalty ranging from RMB 5,000 to RMB 30,000 (approximately US$800 to $4,800).

The Amended Law not only reiterates the general data protection principle of protecting a “privacy right,” but also imposes specific requirements for sending advertisements and using pop-ups.  Notably, in addition to routine civil remedies, the Amended Law introduces administrative sanctions for breaches of advertising privacy rights for the first time in China.

It is noteworthy that the Amended Law comes just months after the Interactive Internet Advertising Committee of China (i.e., a subcommittee of the China Advertising Association) issued the Chinese Internet Targeted Advertising Industry Standard on the Framework of Users’ Information Protection (the “Industry Standard”) on March 15, 2014.  Though the Industry Standard is not mandatory, it does provide certain good practice guidance for online behavioral advertising.  For example, the Industry Standard directs advertisers to include a link to a privacy statement in websites and apps explaining the scope and method of the information collection, and to provide users with an option to stop the information collection for targeted advertising purposes.  Also, the Industry Standard directs advertisers collecting users’ sensitive information (such as health information, race, political views, religion, gene and fingerprint) for the purpose of online targeted advertising to obtain users’ explicit consent.

While not specifically addressing cookies or online tracking, the Amended Law shows a definite intent to introduce much tighter control on data and privacy protection in both online and offline advertising activities.  Advertisers who engage in advertising activities in China should review their existing advertisement operating procedures to ensure they comply with these new data protection provisions under the Amended Law.