Weekly Cases . . How is the "significantly low" advertising cost defined?
Aiji (Shanghai) Real Estate Brokerage Co., Ltd. in November 2015 in Shanghai Oriental Broadcasting Co., Ltd. ("Oriental Broadcasting Corporation") advertising media Shanghai Radio and Television FM97.7 frequency, AM990 frequency issued 67 times "Love House" brand ads, which contains "China Consumer Association list, Aiyo Jiya won the consumer protection model enterprise" and other promotional terms. It has been verified that the China Consumer Association has never organized rankings and evaluations such as "China Consumer List" and "Consumer Protection Model Enterprises", and the above-mentioned advertising content has no factual basis and constitutes false advertising. The parties involved in the case of advertising costs of 13695.30 yuan (the contract price after the discount), and according to the Oriental Broadcasting Corporation published the price of the publication, the above-mentioned advertising published price of 42917.46 yuan, the actual price of 31.9% of the price of the publication.
The focus of the dispute
According to Article 55 of the Advertising Law, if a false advertisement is published, the administrative department for industry and commerce shall order it to stop publishing, order the advertiser to eliminate the effect within the corresponding scope, and shall be fined three times or less than five times the advertising cost, and if the advertising cost cannot be calculated or is obviously low, it shall be fined not less than 200,000 yuan and not more than one million. In law enforcement practice, the application of this provision by the General Administration of Industry and Commerce and the Municipal Bureau of Industry and Commerce is not clearly explained at present, and it is difficult to grasp in the investigation and prosecution of specific cases. In the specific case of the implementation of punishment, law enforcement officials on the part of the parties found that the advertising costs "significantly low" application of the issue of two views.
Point of view: the parties in order to obtain the China Consumer Association award in the name of fictitious facts of publicity, with subjective intent.From the point of view of illegal effect, resulting in deception, misleading consumers and serious infringement of the reputation of the Chinese Consumer Association objective consequences, illegal circumstances are more serious, in the investigation of the case, deliberately create obstacles, if the contract discount price calculation of advertising costs, not enough to act as a deterrent to its illegal acts, should be "advertising costs significantly lower" in the Advertising Law to determine, imposed "200,000 yuan to less than 1 million yuan" punishment. The reasons for this:
First, in the law enforcement departments to start the investigation of the parties, its wanton return to the case department's law enforcement documents, subjectively did not reflect deeply on the illegal acts, objectively interfere with the normal law enforcement efficiency of law enforcement departments, should be severely punished.
Second, the publication price is the advertising publisher published by the market public price, and in the contract between the two parties clearly agreed, reflecting the real advertising price, the contract agreed to the parties discount, is the advertising publisher to give the parties preferential, and the first condition of this preferential must be on the basis of the publication price, the parties must also complete a certain amount of advertising (publishing a full year of advertising). And in this case, the illegal content of advertising is only a small part of the contract advertising, so, from the contract agreed preferential discount price to calculate the price of advertising can not fully reflect the actual price of illegal advertising.
Third, the definition of advertising costs obviously low can be considered from several aspects: First, whether the continuous time of advertising is longer, resulting in a certain social impact; Combined with the above three aspects of the actual payment of advertising costs to compare, if according to the serious circumstances to punish, the amount of five times the advertising costs can not reach the "advertising costs can not be calculated or significantly low, the penalty of more than 200,000 to less than one million" the prescribed minimum limit (i.e., 200,000 yuan), can be applied to the "advertising costs can not be calculated or significantly low" provisions of the penalty. This case is a typical example, the advertisement in Shanghai People's Radio for 26 consecutive days, a total of 67 times, false advertising content not only deceives and misleads consumers, but also affects the reputation of the Chinese Consumer Association, should be severely punished. The five-fold fine of only 68,472.50 yuan according to the actual advertising cost calculation is not enough to serve as a disciplinary action, so the "advertising cost is significantly lower" provisions should be applied to punish.
Viewpoint 2 holds that if the parties are seriously in violation of the law and refuse to cooperate in the investigation of the case, they shall be severely punished, but they must be punished by reference to the maximum penalty clause within the applicable provisions of the law.Reason: How to define advertising costs is obviously low, first, there is evidence that the parties to the contract in order to avoid legal liability, forged false contracts or law enforcement departments involved, and then re-signed the contract; In this case, there is no evidence that the parties have the above-mentioned problems.
Process the results
The discount price of advertising expenses in this case is the true statement of the parties to the target of this contract, and its price agreement behavior does not violate the relevant laws and regulations.
In the end, the Airport Bureau imposed an administrative penalty of five times the advertising expenses of the parties in accordance with the provisions of Article 55, paragraph 1, of the Advertising Law. The decision to punish the parties as follows: order to stop publishing illegal advertisements and eliminate the impact within the corresponding scope, and fine RMB68476.50 (five times the advertising cost).
The case ultimately did not take the advertising cost "obviously low" as a determination, mainly based on the current "advertising law" to determine that "advertising costs significantly low" there is no clear statement, from the point of view of stability, to the maximum amount of actual advertising costs, but the case from the nature of the violation, circumstances to measure the effect of not really reflecting the "heavy", this case for the future advertising law enforcement to bring deep thinking.
First of all, a comprehensive analysis of the case, from the subjective intent of the subject of the violation, the consequences of objective infringement and other elements of the analysis of the case of the seriousness of the circumstances.Can not because of the low advertising costs and let the illegal circumstances serious social harm of the illegal advertising parties fined "light", nor because the law provides that is "quota penalty" and let the illegal circumstances less social harm less illegal advertising parties instead of "heavy". This is also the weight of the ethics of law enforcers.
Secondly, compared with the advertising price published by the advertising publisher, the price agreed upon in the contract and the actual advertising expenses paid, whether there is collusion between the advertiser and the advertising publisher to mislead law enforcement agencies with "false contracts".At the same time, it is possible to refer to article 19 of the Supreme People's Court's Interpretation of Certain Questions on the Application of the Contract Law (II) which stipulates: "The people's court shall, in the judgment of the general operator of the transaction, make reference to the price department of the place where the transaction was traded or the market transaction price, and make a comprehensive consideration of other relevant factors to confirm it." If the transfer price does not reach the guide price of the place where the transaction is made or the market transaction price is 70 percent, it can generally be regarded as a significantly unreasonable low price. "According to the judicial interpretation, the advertising cost is obviously low, and it is used less in administrative punishment.
Moreever, reference to the relevant cases for comparative analysis, since the implementation of the new Advertising Law, with similar cases or similar cases, the advertising costs of the identification or the results of the punishment for measurement and reference, so that administrative punishment cases as far as possible in the same penalty range line.
To sum up, how we apply the "advertising costs can not be calculated or significantly low" situation in advertising enforcement, there should be a zero breakthrough in the relevant cases, so that those social harm and low advertising costs of illegal acts should be punished, which is also the legislative intention of the Advertising Law.
(This article was written by Li Yng Shen Yuming of the Airport Branch of the Shanghai Municipal Bureau of Industry and Commerce, and published in the semi-monthly issue of Industrial and Commercial Administration, No. 5 of 2017, with the original title "The Application of "Significantly Low" Advertising Costs")
Production unit: China Industrial and Commercial Publishing House Digital Publishing Department
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