Japan's Advertising Laws, Grey Zones, and What You Ought to Know

Japan's Advertising Laws, Grey Zones, and What You Ought to Know

Understanding cultural differences in advertising is imperative in getting your marketing just right. 

But there's even more for business owners to think about: insufficient knowledge of Japan's advertising laws may result in unwanted legal attention. 

From over-enthusiastic superlatives to unsubstantiated food claims, here are 6 points culled from relevant acts and regulations you'll want to know about as you create ads and sales copy for your business in Japan. 

Point 1. Careful with superlatives. 

The Act Against Unjustifiable Premiums and Misleading Representations (不当景品類及び不当表示防止法 Futou keihinrui oyobi futou hyouji boushihou) prohibits the use of misleading expressions and non-factual claims in adverts. One of the stipulations in this law limits using superlative terms; such claims must be fact-based, not mere opinions ("Prohibition of Misleading Representations,” Article 5.i).

For instance, words like "No.1" and "the best" are not strictly illegal. Still, you must have empirical data or research to back up any comparative claim you make—should the Consumer Affairs Agency (CAA) come knocking.

CAA is Japan's regulatory body that prompts disciplinary action for deceptive and unfair business practices. When CAA determines that an advertisement or price label is misleading, they will order the business to cease the misleading practice and take necessary steps to prevent a reoccurrence. As a disciplinary measure, CAA may publish a notice naming the company and their infraction. In some cases, they will order the payment of a fine. (For a further English explanation of CAA's role in regulating advertisements in Japan, see this article, available on Lexology.com by Atsumi & Sakai law firm.) 

Point 2. Dual pricing is regulated

The Unjustifiable Premiums act mentioned in Point 1 also regulates dual pricing ("Prohibition of Misleading Representations," Article 5.ii). Dual pricing is a common marketing tactic and not illegal in itself, but the following are three examples that fall under prohibited acts:

  • Presenting a higher-than-actual past price next to the current price for dramatic effect.

  • Inventing inaccurate retail or competitors' prices.

  • Posting false or misleading information of future price-hikes.

Having continuous or regular discount campaigns with too little cool-down time between sales periods may also be considered a violation. 

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Point 3. Stealth marketing is a no.

Stealth marketing, where the viewer is unaware they are being advertised to, is prohibited in Japan under the aforementioned Unjustifiable Premiums act ("Prohibition of Misleading Representations," Article 5.iii). The specific clause states:

"Any Representation by which any particular relating to transactions of goods or services is likely to be misunderstood by general consumers and which is designated by the Prime Minister as such, and considered likely to induce customers unjustly and to interfere with general consumers' voluntary and rational choice-making."

Therefore, while not explicitly spelled out in Article 5, law experts in Japan advise against "undercover marketing" and "native advertising":

  • "Undercover marketing" refers to the paid placement of products (often in a movie or TV show), without the knowledge of the viewer that it’s a paid product placement. 

  • "Native advertising" refers to disguising an ad as a general interest video or article. Articles or videos paying for placement must make this discernable to readers and viewers.

Pretending to be a customer or a third party and writing positive reviews for your own services would also constitute a violation of "general consumers' voluntary and rational choice-making."

Point 4. Ads for pharmaceuticals and medical devices are regulated. 

The Act on Pharmaceuticals and Medical Devices (医薬品医療機器等法 iyakuhinn iryoukikitouhou) regulates the sale of this industry, including prohibiting the following:

  • False or exaggerated ads concerning the name and its effect or efficiency.

  • Misleading consumers into thinking a doctor guarantees the effect or efficiency.

  • Marketing that suggests abortion or uses obscene documents or images.

But even before you construct sales copy, business owners who wish to sell a pharmaceutical or medical device must be Marketing Authorization Holders or contract with a Marketing Authorization Holder. (Marketing Authorization Holders must have an office in Japan and full-time employees who fill the roles of General Manager, Quality Manager, and a Safety Manager, among other stipulations.)

Go here for a full read of "Chapter IV Marketing and Manufacturing of Pharmaceuticals, Quasi-Pharmaceutical Products and Cosmetics," Act on Pharmaceuticals and Medical Devices. 

Point 5. Ads for cosmetics are regulated. 

Labeling for cosmetics is regulated under the Pharmaceutical Affairs Act (薬事法yakujihou) and must be in Japanese, with all ingredients clearly stated. There are specific words that are not allowed, and any false or misleading marketing text is prohibited. 

JETRO's guidebook on importing cosmetics to Japan refers to the Act against Unjustifiable Premiums and Misleading Representations as being applicable to the marketing of cosmetics. Their guidebook states: 

"The Act prohibits any form of improper labeling with exaggerated or false labeling that misleads consumers about the nature or quality of a product. The Consumer Affairs Agency can demand documentation of a rational basis for labeling that makes claims of superior quality etc. If the importer or reseller is unable to do so, those claims are considered to be a form of improper labeling."

If you are thinking of bringing your cosmetics to Japan, go through the correct procedures

Point 6. Ads for certain food products are regulated. 

The Health Promotion Act (健康増進法kenkouzoushinhou) prohibits unsubstantiated claims of foodstuffs in the marketing of foods. 

Specifically, if you claim that "X food product slows cholesterol absorption" or other specific health-related desired outcome, you would need to submit evidence that your food product claim is backed by verifiable evidence. 

Food products that require approval to market in this specific way are called Foods for Specified Health Uses (FOSHU). A company must receive approval from CAA to market foods for specified health uses, where the representation describes a specific health-related claim. Once the CAA has approved the food product, the company is permitted to make the health claim in their marketing. 

Final thoughts

Curious about how often companies are prosecuted for practices that lead to misrepresentation? Refer to this page (Japanese) on Consumer Affairs Agency’s official site. 

We've covered the primary issues that business owners and anyone selling anything in Japan should know about. But there's always more to be learned and uncovered. 

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