Avène Advertisers Fines $29,100 for False Advertising

Avène advertisers paid two companies to purchase false interactive data on social media in order to reach Avène's KPI, which made consumers misunderstand the company's business reputation and brand influence to a great extent. The advertiser was fined 200,000 yuan (about $29,100).

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Recently, according to the penalty information published by the Shanghai Municipal Bureau of Market Regulation, Shanghai iBlue Communication Advertisement Company Limited (hereinafter referred to as iBlue Communication) was fined 200,000 yuan (about $29,100) for helping other operators to make false or misleading commercial propaganda.

The information shows that iBlue Communication signed a Service Contract with Avène in March 2022, which was valid until December 31, 2022. According to the contract, iBlue Communication and Avène also adopted an order named "Avène FY22 Annual Social Retainer Quotation", agreeing that the parties would provide Avène with Avène's official WeChat operating service and Avène's Xiaohongshu account for the period from April 1, 2022 to December 31, 2022. The specific services include the production and publication of the content of the articles on Avène's official WeChat account and WeChat official accounts, replies to comments, the writing of monthly reports, etc.

Meanwhile, according to the Key Performance Indicators ("KPI") set by Avène, iBlue Communication shall help Avène to achieve an average of 25,000 readers for the headline articles published by iBlue Communication on Avène's WeChat official account from April 2022 to December 2022. The interaction volume (including likes, favorites and comments) of each article shall reach an average of 400 articles per article. The number of followers of Avène account on Xiaohongshu shall increase by 37,500 during the above period. Avène shall require that the interaction volume of the articles published on Xiaohongshu shall reach an average of 750 pieces per article.

In order to achieve the above KPI, in the process of the above order fulfillment, iBlue Communication still paid for the above fake interaction data from its supplier Ningde Ganfanren Culture Media Co., Ltd. and Shijiazhuang Suqian Technology Co., Ltd. respectively, knowing that they used abnormal marketing channels to obtain fake followers on Wechant and Xiaohongbook and reading views on Wechat.

According to the statistics, between April 2022 and September 2022, iBlue Communication purchased a total of 32,830 followers of WeChat official accounts, 5,512 followers of Xiaohongshu account and 223,000 reading views of WeChat article, with a total purchase amount of 28,533.18 yuan (about $4151.6).

Shanghai Municipal Bureau of Market Regulation believed that iBlue Communication helps its clients to falsify the interaction data of the followers and readings of their WeChat public accounts and Xiaohongshu accounts by paying third parties to purchase false followers and false article readings. It made consumers unaware of the true followers and reading views of its clients' WeChat public account and Xiaohongshu account, which made consumers misunderstand the company's business reputation and brand influence to a great extent. This act seriously violates the commercial code of honesty and trustworthiness, disrupts the market order, deceives and misleads consumers, and violates Article 8(2) of Anti-Unfair Competition Law of the People's Republic of China, which stipulates that "operators shall not help other operators to conduct false or misleading commercial propaganda by organizing false transactions, etc.".

Ultimately, Shanghai Shenglan was fined 200,000 yuan (about $29,100).