Delai Huang was fined 560,000 yuan for repeated false propaganda Promoting South American aloe vera is actually domestic

Source: China Economic Network

China Economic Network Beijing, March 23 The administrative penalty decision (Shanghai Municipal Supervision and Rainbow Office [2023] No. 092022001089) released on the website of the Shanghai Municipal Administration for Market Regulation shows that Shanghai Delai Cosmetics Co., Ltd. published false advertisements and was fined 560,000 yuan by the Shanghai Hongkou District Market Supervision Administration. Penalty decision date March 6, 2023.

After investigation, it was found that the advertiser, Shanghai Delai Biotechnology Co., Ltd., entrusted the parties to conduct advertising in order to increase the sales of cosmetics produced and operated by the company, expand brand influence and attract consumer attention. The parties concerned will then promote the advertising content of cosmetics produced and operated by Shanghai Delai Biotechnology Co., Ltd. and publish it through its registered and operated WeChat public account "Delai Huang". On November 24, 2022, law enforcement officers inspected the scene; On December 8, 2022, the Hongkou District Market Supervision Administration received the handling of illegal advertising leads from the Shanghai Municipal Administration for Market Regulation, and from November 22, 2022, Shanghai Delai Cosmetics Co., Ltd. published relevant articles on the WeChat public account of "Delai Huang", suspected of violating the provisions of relevant laws and regulations.

On May 7, 2022, the parties posted a tweet through the WeChat public account "Delai Huang" "Yeast water necessary for summer, crush a thousand yuan fairy water, the king of cost performance!" The cosmetics advertised are "Delai Revitalizing Beauty Water" (record number: 沪G makeup network 备字2021506659). The tweet claimed that the cosmetic product contained "up to 60% bifida yeast to maintain the two-way balance of water and oil", but the proportion of "bifida yeast fermentation product filtrate" added by the entrusted manufacturer to the "bifida yeast fermentation product filtrate complex" in the production of the cosmetics was only 49.55%, which neither reached 60% of the "bifida yeast fermentation product filtrate complex" nor 60% of the net content of the cosmetics. Knowing that the actual content of the "bifida yeast" ingredient in the cosmetic product was less than 60%, the party wrote a false advertising copy that was inconsistent with the actual situation and released it to the public.

On July 31, 2022, the subject tweeted through the WeChat public account "Delai Huang" "How to quickly give first aid after exposure?" Take a quick look here! The cosmetics advertised are "Delai Moisturizing Repair Aloe Vera Essence Gel" (record number: Shanghai G makeup network 备字2022005107). The tweet included advertising content such as "selected from Curacao high-quality aloe vera", "aloe vera is from Curacao, West Indies, where aloe vera grows all year round, the soil is very suitable for aloe vera", "Delai aloe vera gel ingredient is Curacao aloe vera leaf water" and other advertising content. The parties knew that the water source of aloe vera leaves used in the cosmetic formula was actually China, and the aloe vera raw materials used were grown and produced in China, rather than aloe vera from the West Indies of South America, and wrote false advertising and publicity copy that was inconsistent with the actual situation and released it to the public.

On June 27, 2022, the party tweeted through the WeChat public account "Delaihuang" "The peptide ingredients that noble women and anti-aging are using, it actually has it!" The cosmetics promoted are "Delai Chen Ten Heavy Peptide Beauty Water" (record number: Shanghai G makeup network preparation 2021509272), "Delai Chen Ten Heavy Peptide Beauty Lotion" (record number: Shanghai G makeup network preparation 2021509302), "Delai Chen Ten Heavy Peptide Beauty Cream" (record number: Shanghai G makeup network preparation 2021511147) and "Delai Chen ten heavy peptide beauty essence" (record number: Shanghai G makeup network preparation 2021509307) 4 ordinary makeup products. The tweet has "acetyl hexapeptide-8 is known as applying meat du, which not only prevents facial dynamic lines, but also lightens existing false lines." With ace whitening ingredients niacinamide, centella asiatica, purslane, soothing anti-inflammatory" and other advertising content. None of the above 4 cosmetics reported efficacy of anti-inflammatory effects. When the parties knew that the cosmetics were ordinary cosmetics and did not have anti-inflammatory effects, the parties implied that the cosmetics itself had anti-inflammatory effects by the efficacy of the cosmetic ingredients.

The above three promotional articles published by the WeChat public account "Delai Huang" were designed and produced by the employees of the parties and confirmed by Shanghai Delai Huang Biotechnology Co., Ltd., and then published by the parties on the above WeChat public accounts. The above cosmetics are all produced and filed by Shanghai Delai Biotechnology Co., Ltd. entrusted by COSMAX (China) Cosmetics Co., Ltd. The parties were wholly-owned subsidiaries of Shanghai Delai Biotechnology Co., Ltd. at the time of publishing the above-mentioned WeChat promotional articles, and had not signed a contract with the advertiser, Shanghai Delai Biotechnology Co., Ltd., so the advertising expenses could not be calculated.

The Hongkou District Administration for Market Regulation held that the above-mentioned conduct of the parties violated the provisions of Article 17 and Article 28, Paragraph 2, Item 2 of the Advertising Law of the People's Republic of China. Pursuant to the third paragraph of Article 55 and the third paragraph of Article 58 of the Advertising Law of the People's Republic of China and the first paragraph of Article 28 of the Administrative Punishment Law of the People's Republic of China, the parties are ordered to stop the illegal conduct, and the administrative punishments for the parties are as follows: Order the parties to stop the illegal conduct, and fine them RMB 10,000.

According to interface news reports, Delai Huang is an Internet celebrity beauty brand that has risen rapidly from the short video platform Kuaishou. According to the "2023 Kuaishou Beauty Daily Chemical Data Report" released by Kuaishou and Magnetic Engine, in 2022, Delaijian ranked second in the GMV generated by Kuaishou. Second only to the Korean beauty brand Whoo, these two brands are the only beauty brands on Kuaishou with an annual GMV of more than 1 billion yuan.

According to China Net Finance, according to a number of public information such as Beauty Network, the rapid rise of "Delai Huang" in the e-commerce ecology of a short video platform is a functional skin care product brand founded by the Maoqi team, which once rushed into the platform's anchor TOP5.

Article 17 of the Advertising Law of the People's Republic of China stipulates that, except for advertisements for medical treatment, drugs and medical devices, any other advertisements involving disease treatment functions are prohibited, and medical terms or terms that are likely to confuse the promoted goods with drugs and medical devices shall not be used.

Article 28 of the Advertising Law of the People's Republic of China stipulates that if an advertisement deceives or misleads consumers with false or misleading content, it constitutes false advertising. In any of the following circumstances, an advertisement is false:

(1) Goods or services do not exist;

(2) Information such as the performance, function, origin, use, quality, specification, composition, price, producer, expiration date, sales status, and honors of the goods, or information such as the content, provider, form, quality, price, sales status, and honors of the services, as well as information such as promises related to the goods or services, are inconsistent with the actual situation, and have a substantial impact on the purchase behavior;

(3) Using fictitious, forged, or unverifiable scientific research results, statistical materials, survey results, abstracts, quotations, and other such information as supporting materials;

(4) Fabricating the effect of using goods or receiving services;

(5) Other situations where false or misleading content is used to deceive or mislead consumers.

Article 55 of the Advertising Law of the People's Republic of China stipulates: Where false advertisements are published in violation of the provisions of this Law, the market regulatory department shall order the publication of advertisements to stop, order the advertisers to eliminate the impact within the corresponding scope, and impose a fine of between three and five times the advertising costs, and where the advertising expenses cannot be calculated or are obviously low, give a fine of between 200,000 and 1,000,000 RMB; Where there are three or more illegal acts within two years or there are other serious circumstances, a fine of between 5 and 10 times the advertising expenses is given, and where the advertising expenses cannot be calculated or are obviously low, a fine of between RMB 1 million and RMB 2,000,000 may be given, and the business license may be revoked, and the advertising review organ shall revoke the approval documents for advertising review, and shall not accept its application for advertising review within one year. Where medical establishments have illegal conduct provided for in the preceding paragraph, and the circumstances are serious, in addition to being punished by the market regulatory department in accordance with this Law, the administrative departments of health may revoke the diagnosis and treatment subjects or the practice license of the medical establishment. Where advertising agents or advertisement publishers know, or should know, that the advertisement is false but still designs, produces, represents or publishes it, the market regulatory department confiscates the advertising expenses and gives a fine of between three and five times the advertising expenses, and where the advertising expenses cannot be calculated or are obviously low, give a fine of between 200,000 and 1,000,000 RMB; Where there are three or more illegal acts within two years or there are other serious circumstances, a fine of between 5 and 10 times the advertising expenses is given, and where the advertising expenses cannot be calculated or are obviously low, a fine of between 1 and 2,000,000 RMB is given, and the relevant departments may suspend advertising operations and revoke business licenses. Where advertisers, advertising agents, or advertisement publishers have conduct provided for in paragraphs 1 and 3 of this article, which constitute a crime, criminal responsibility shall be pursued in accordance with law.

Article 58 of the Advertising Law of the People's Republic of China stipulates: Where any of the following acts are committed, the market regulatory department shall order the publication of advertisements to stop, order the advertisers to eliminate the impact within the corresponding scope, and impose a fine of between one and three times the advertising costs, and if the advertising expenses cannot be calculated or are obviously low, give a fine of between 100,000 and 200,000 yuan; where the circumstances are serious, give a fine of between three and five times the advertising costs, and where the advertising expenses cannot be calculated or are obviously low, give a fine of between 200,000 and 1,000,000 RMB, and may revoke the business license, and the advertising review organs shall revoke the approval documents for the advertisement review, and shall not accept the application for advertising review for one year:

(1) Publishing advertisements for medical treatment, drugs, or medical devices in violation of article 16 of this Law;

(2) Violating article 17 of this Law by involving disease treatment functions in advertisements, as well as using medical terms or terms that are likely to confuse the goods being promoted with drugs or medical devices;

(3) Publishing advertisements for health food in violation of Article 18 of this Law;

(4) Violating the provisions of Article 21 of this Law by publishing advertisements for pesticides, veterinary drugs, feed, and feed additives;

(5) Publishing alcohol advertisements in violation of article 23 of this Law;

(6) Publishing education or training advertisements in violation of article 24 of this Law;

(7) Violating article 25 of this Law by publishing advertisements for goods or services that have an expected return on investment, such as investment promotion;

(8) Publishing real estate advertisements in violation of article 26 of this Law;

(9) Violating article 27 of this Law by publishing advertisements for crop seeds, forest seeds, grass seeds, breeding stock and poultry, aquatic seeds, and seed breeding;

(10) Violating the provisions of the second paragraph of article 38 of this law by using minors under the age of 10 as advertising spokespersons;

(11) Violating the provisions of the third paragraph of article 38 of this law by using natural persons, legal persons, or other organizations as advertising spokespersons;

(12) Violating article 39 of this Law by publishing advertisements in primary and secondary schools or kindergartens, or using items related to primary and secondary school students or young children;

(13) Violating the provisions of the second paragraph of article 40 of this Law by publishing advertisements for goods or services aimed at minors under the age of 14;

(14) Violating article 46 of this law by publishing advertisements without review.

Where medical establishments have illegal conduct provided for in the preceding paragraph, and the circumstances are serious, in addition to being punished by the market regulatory department in accordance with this Law, the administrative departments of health may revoke the diagnosis and treatment subjects or the practice license of the medical establishment. Where advertising agents or advertisement publishers know, or should have known, of the illegal conduct provided for in the first paragraph of this article but still design, produce, act as an agent, or publish it, the market regulatory departments confiscate the advertising expenses and impose a fine of between one and three times the advertising expenses, and where the advertising expenses cannot be calculated or are obviously low, give a fine of between 100,000 and 200,000 RMB; where the circumstances are serious, give a fine of between three and five times the advertising costs, and where the advertising costs cannot be calculated or are obviously low, give a fine of between 200,000 and 1,000,000 RMB, and the relevant departments may suspend advertising publishing operations, revoke business licenses, or revoke advertising registration certificates.

Article 28 of the Administrative Punishment Law of the People's Republic of China stipulates: When administrative organs carry out administrative punishments, they shall order the parties to make corrections or correct the illegal conduct within a time limit. Where parties have unlawful gains, they shall be confiscated, except where compensation should be made in accordance with law. Unlawful gains refer to money obtained from the commission of illegal acts. Where laws, administrative regulations, or departmental rules have other provisions on the calculation of unlawful gains, follow those provisions.

The following is the original text:

Administrative penalty decision of Shanghai Hongkou District Market Supervision Administration

Shanghai Municipal Supervision and Rainbow Office [2023] No. 092022001089

Party: Shanghai Delai Cosmetics Co., Ltd

Name of the subject qualification license: business license

Unified social credit code: 91310120MA1HYWX90M

Residence: 1st floor, Building 2, No. 1876 Chen Qiao Road, Fengxian District, Shanghai

Legal representative: Li Koulan

On November 24, 2022, the law enforcement personnel of our bureau went to the business premises of Room 2701, No. 218 Wusong Road, Hongkou District, Shanghai. The on-site inspection found that the public account "Delai Huang" registered and operated by the parties released the following advertising tweets on May 7, 2022: "Yeast water necessary for summer, crushing thousands of yuan fairy water, the king of cost performance!" The promotion of Delai Huang Rejuvenating Beauty Water has "up to 60% bifida yeast rejuvenation can maintain the two-way balance of water and oil". The cosmetics record number is Shanghai G makeup network 2021506659, its manufacturer and filing person is COSMAX (China) Cosmetics Co., Ltd., the actual content of "bifida yeast" in the cosmetics is only 49.55%. On December 8, 2022, our bureau received the handling of illegal advertising leads from the Shanghai Municipal Administration for Market Regulation, and from November 22, 2022, Shanghai Delai Cosmetics Co., Ltd. published relevant articles on the WeChat public account of "Delai Huang", suspected of violating the provisions of relevant laws and regulations. In accordance with the first paragraph of Article 19 of the Provisions on Administrative Punishment Procedures for Market Supervision and Administration, our bureau filed a case against the parties for investigation on December 12, 2022.

After investigation, it was found that the advertiser, Shanghai Delai Biotechnology Co., Ltd., entrusted the parties to conduct advertising in order to increase the sales of cosmetics produced and operated by the company, expand brand influence and attract consumer attention. The parties concerned will then promote the advertising content of cosmetics produced and operated by Shanghai Delai Biotechnology Co., Ltd. and publish it through its registered and operated WeChat public account "Delai Huang".

On June 27, 2022, the party tweeted through the WeChat public account "Delaihuang" "The peptide ingredients that noble women and anti-aging are using, it actually has it!" The cosmetics promoted are "Delai Chen Ten Heavy Peptide Beauty Water" (record number: Shanghai G makeup network preparation 2021509272), "Delai Chen Ten Heavy Peptide Beauty Lotion" (record number: Shanghai G makeup network preparation 2021509302), "Delai Chen Ten Heavy Peptide Beauty Cream" (record number: Shanghai G makeup network preparation 2021511147) and "Delai Chen ten heavy peptide beauty essence" (record number: Shanghai G makeup network preparation 2021509307) 4 ordinary makeup products. The tweet has "acetyl hexapeptide-8 is known as applying meat du, which not only prevents facial dynamic lines, but also lightens existing false lines." With ace whitening ingredients niacinamide, centella asiatica, purslane, soothing anti-inflammatory" and other advertising content. None of the above 4 cosmetics reported efficacy of anti-inflammatory effects. When the parties knew that the cosmetics were ordinary cosmetics and did not have anti-inflammatory effects, the parties implied that the cosmetics itself had anti-inflammatory effects by the efficacy of the cosmetic ingredients. The above three promotional articles published by the WeChat public account "Delai Huang" were designed and produced by the employees of the parties and confirmed by Shanghai Delai Huang Biotechnology Co., Ltd., and then published by the parties on the above WeChat public accounts. The above cosmetics are all produced and filed by Shanghai Delai Biotechnology Co., Ltd. entrusted by COSMAX (China) Cosmetics Co., Ltd. The parties were wholly-owned subsidiaries of Shanghai Delai Biotechnology Co., Ltd. at the time of publishing the above-mentioned WeChat promotional articles, and had not signed a contract with the advertiser, Shanghai Delai Biotechnology Co., Ltd., so the advertising expenses could not be calculated.

The above facts are mainly proved by the following evidence: the on-site record of the inspection of the parties, the records of the inquiries of the legal representatives of the parties, the records of the inquiries to the authorized client of Shanghai Delai Biotechnology Co., Ltd., the copy of the business license provided by the parties, the copy of the ID card provided by the legal representative of the parties, the copy of the business license provided by Shanghai Delai Biotechnology Co., Ltd., the copy of the ID card provided by the authorized client of Shanghai Delai Biotechnology Co., Ltd., the notice of handing over the case clues, A printed copy of the WeChat screenshot containing the above-mentioned advertising content, a copy of the housing lease contract provided by the parties, the "Explanation of Circumstances" issued by the parties and other evidence materials confirmed by the parties.

On February 23, 2023, our bureau served the parties with a notice of administrative punishment hearing (Shanghai Supervision Hearing [2023] No. 092022001089) in accordance with the law. The parties did not exercise their right to make statements and defenses, nor did they request a hearing within the statutory time limit.

The Bureau believes that the act of the parties entrusted by Shanghai Delai Biotechnology Co., Ltd. to publish promotional articles on May 7, 2022 and July 31, 2022 violated Article 28, Paragraph 2, Item 2 of the Advertising Law of the People's Republic of China: "Information on the performance, function, origin, use, quality, specification, composition, price, producer, expiration date, sales status, honors and other information of the goods, or the content, provider, form, quality, price, sales status, honors and other information of the service." , and information such as promises related to goods or services are inconsistent with the actual situation, which has a substantial impact on the purchase behavior; ". Pursuant to the third paragraph of Article 55 of the Advertising Law of the People's Republic of China: "Where advertising agents or advertisement publishers knowingly or should have known that the advertisement is false but still design, produce, represent or publish it, the market regulatory department shall confiscate the advertising expenses and impose a fine of between three and five times the advertising costs, and where the advertising expenses cannot be calculated or are obviously low, give a fine of between 200,000 and 1,000,000 RMB; Where there are three or more illegal acts or other serious circumstances within two years, a fine of between 5 and 10 times the advertising expenses is given, and where the advertising expenses cannot be calculated or are obviously low, a fine of between 1 million and 2,000,000 RMB is given, and the relevant departments may suspend advertising publishing operations, revoke business licenses, and revoke advertising publication registration certificates. and the first paragraph of Article 28 of the Administrative Punishment Law of the People's Republic of China: "When administrative organs carry out administrative punishments, they shall order the parties to make corrections or correct the illegal conduct within a time limit." ", order the parties to stop the illegal acts, and impose administrative penalties on the parties as follows: a fine of 10,000 yuan is wantonly and 10,000 yuan.

The conduct of the parties to publish promotional articles on June 27, 2022, entrusted by Shanghai Delai Biotechnology Co., Ltd., violated Article 17 of the Advertising Law of the People's Republic of China: "Except for advertisements for medical treatment, drugs and medical devices, any other advertisements involving disease treatment functions are prohibited, and medical terms or terms that are likely to confuse the promoted goods with drugs and medical devices are prohibited." regulations. Pursuant to the third paragraph of Article 58 of the Advertising Law of the People's Republic of China: "Where advertising agents or advertisement publishers know, or should have known, of the illegal conduct provided for in the first paragraph of this Article but still design, produce, act as an agent, or publish it, the market regulatory department shall confiscate the advertising expenses and impose a fine of between one and three times the advertising expenses, and where the advertising expenses cannot be calculated or are obviously low, give a fine of between 100,000 and 200,000 RMB; where the circumstances are serious, give a fine of between three and five times the advertising costs, and where the advertising costs cannot be calculated or are obviously low, give a fine of between 200,000 and 1,000,000 RMB, and the relevant departments may suspend advertising publishing operations, revoke business licenses, or revoke advertising registration certificates. and the first paragraph of Article 28 of the Administrative Punishment Law of the People's Republic of China: "When administrative organs carry out administrative punishments, they shall order the parties to make corrections or correct the illegal conduct within a time limit." ", order the parties to stop the illegal conduct, and the administrative punishments for the parties are as follows: a fine of RMB 10,000.

In summary, the parties were ordered to stop the illegal acts, and the combined penalties were as follows: a fine of RMB 10,000.

The parties shall, within 15 days of receiving this decision, pay the fines and forfeitures to the specific collection agency of the city's Industrial and Commercial Bank or the Construction Bank. If the fine is not paid when it is due, the Bureau shall impose an additional fine of 3% of the amount of the fine on a daily basis in accordance with Article 72, Paragraph 1 (1) of the Administrative Punishment Law of the People's Republic of China, and apply to the people's court for compulsory enforcement in accordance with law.

If the parties are dissatisfied with this administrative punishment decision, they may apply to the Shanghai Hongkou District People's Government for administrative reconsideration within 60 days of receiving this decision; It is also possible to file a lawsuit directly with the Shanghai Railway Transportation Court within six months. During the period of applying for administrative reconsideration or initiating an administrative lawsuit, the enforcement of administrative punishments does not cease.

Hongkou District Administration for Market Regulation

March 6, 2023