China Proposes New Rules Increasing Oversight of Online Advertising

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Going into the weekend, China’s market regulator proposed new rules that would increase oversight of online advertising in the country. The proposal includes policies stipulating that advertising should not affect normal internet use or mislead users, according to a report by Reuters.

In a statement, the country’s State Administration for Market Regulation said that advertising on the internet must “meet the requirements for the establishment of socialist spiritual civilization and the promotion of excellent traditional culture of the Chinese nation”.

The move is consistent with a trend in China this year that has seen the government increase regulation across a range of industries–especially technology-rated companies.

 
 

China’s search giant Baidu, along with game publisher Tencent Holdings recently warned investors that the regulatory crackdown along with the pandemic would be a burden on advertising sales in the coming quarters

According to the Reuters report:

The proposed rules call on platform operators to establish a system for registering and reviewing advertisers and adverts, and “monitor and inspect the content of advertisements displayed and published by using its information services.”

 
 

The proposed rules also call for bans on advertisements aimed at minors promoting medical treatments, cosmetics, and online games “that are not conducive to the physical and mental health of minors.”

The new rules being proposed are open for public comment until Dec. 25, the regulator added on its website.

Larger Crackdown

Back in August, the Chinese government unveiled a five-year plan outlining tighter regulation of its economy, with new rules covering technology, national security, and monopolies.

The 10-point plan, which is slated to run until the end of 2025, was released by China’s State Council and the Communist Party’s Central Committee.

Advertising on the internet must “meet the requirements for the establishment of socialist spiritual civilization and the promotion of excellent traditional culture of the Chinese nation”.

In April,  Alibaba accepted a record $2.8bn fine following an investigation that found that it had been abusing its dominant market position. The fine amounts to about 4% of the company’s 2019 revenue in China.

In September, Tencent was ordered to stop exclusive music licensing deals with record labels.

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