Stimulating consumer demand through conspicuous advertising content and legal regulations are often at odds with each other, and companies are faced with the problem of how to conduct effective advertising while complying with legal regulations.

In particular, the Consumer Affairs Agency is actively enforcing the labeling regulations of the Unjustifiable Premiums and Misleading Representations Act. There were 348 cases involving measure orders, and 57 cases which involved surcharge payment orders. (“Release of the number of legal action cases and summary of action cases on the Unjustifiable Premiums and Misleading Representations Act” published by the Consumer Affairs Agency on April 30, 2020). In recent years, there have been about 50 cases a year in which measure orders have been issued.

When a company is the subject of a measure order, it is often published and reported publicly, and this will have a significant impact on the reputation of a company, forcing it to respond quickly to customers.

In the event of misrepresentation, a company will automatically begin procedures for payment of a surcharge for up to three years. The order to pay the surcharge for the main products is critical because the amount of the surcharge is 3% of the sales of the products subject to the financial burden on a company which can be so great that it can impact the survival of the company.

We have been involved in the Consumer Affairs Agency’s investigation of the Unjustifiable Premiums and Misleading Representations Act from the outset, providing opportunities to defend companies and helping clients to understand the risks involved.

Experience in representing clients in proceedings such as requests for review by the Agency, actions in court to revoke measure orders, and petitions for stays of enforcement are essential. We have a team of attorneys who have a wealth of experience in this field. In many cases, if you are merely complying with an investigation and request from the Consumer Affairs Agency, you may end up with a measure order. To minimize the prejudice caused to a company through interviews and protests with the investigators in charge, and through effective pleading, we will suggest an appropriate plan.

The Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (the “Pharmaceutical Affairs Act”) is a law that regulates the manufacture and sale of pharmaceuticals and medical devices, and if you are a company that markets drugs, medical devices, health foods, etc., it is vital for you to be aware of this regulation.

Among the multitude of regulations of the Pharmaceutical Affairs Law, the most important regulations include exaggerated advertisements (Article 66 of the Pharmaceutical Affairs Law) and advertisements for unapproved drugs (Article 68 of the Pharmaceutical Affairs Law). Companies pay considerable attention to the contents, effects and efficacy of the ingredients contained in products although they are limited by what can be included in their advertisements.

However, there are heavy sanctions against violators, such as penalties for violation of Article 66 of the Pharmaceutical Affairs Law (Article 85(iv)), and for violation of Article 68 of the Pharmaceutical and Equipment Law (Article 72-5) and penalties (Article 85(v)).

On the other hand, it is not necessarily clear what constitutes “false or exaggerated articles” nor what “pharmaceuticals” are in terms of regulation of advertising for unapproved drugs, etc., so you need to examine and confirm various administrative notifications, guidelines and self-regulations etc. In other words, the Pharmaceutical Affairs Law is a field of many laws and regulations that need to be researched and reviewed. It requires a great deal of time and effort to study all of these laws and regulations by yourself before starting to manufacture and sell products, since the laws and regulations themselves are complex and difficult to understand.

We have experience and knowledge on what kind of information is allowed in advertisements on websites and product packaging for various products such as health foods, cosmetics and electrical appliances at the request of companies. After clarifying what the problem is and what kind of advertising methods can be used to resolve the problem, we can propose practical content that will not compromise the appeal of your advertisements.