Haitian prominently labeled "children's soy sauce" and was convicted of false propaganda

The appellant Foshan Haitian Seasoning Food Co., Ltd. v. the appellant, the Changyi Branch of the Jilin Municipal Administration for Industry and Commerce, and the Jilin Municipal People's Government, were awarded a second-instance judgment on administrative penalties in industrial and commercial administration

Jilin City Intermediate People's Court, Jilin Province

Administrative decisions

(2016) Ji 02 Line End No. 172

The appellant (plaintiff in the original trial) Foshan Haitian Seasoning Food Co., Ltd., domiciled in Wensha Road, Foshan City.

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The appellee (defendant in the original trial) is the Changyi Branch of the Jilin Municipal Administration for Industry and Commerce, and his domicile is Jiefang North Road, Jilin City.

The appellee (defendant in the original trial) jilin municipal people's government, domiciled in Chuanying District.

The appellant, Foshan Haitian Seasoning Food Co., Ltd. (hereinafter referred to as Haitian Company), sued the appellee, the Changyi Branch of the Jilin Municipal Administration for Industry and Commerce (hereinafter referred to as the Changyi Industrial and Commercial Bureau), and the Jilin Municipal People's Government (hereinafter referred to as the Jilin Municipal Government) against the administrative judgment of the Changyi District People's Court of Jilin City (2016) Ji 0202 Xingchu No. 17, against the administrative judgment of the Changyi District People's Court of Jilin City (2016) Ji 0202 Xingchu No. 17. After accepting the case, this court formed a collegial panel in accordance with law and heard the case in open court. The appellant Haitian Company entrusted agents Ye Zhong and Ouyang Caimei, the appellant Changyi Industrial and Commercial Bureau entrusted agents Li Xinzhong and He Changchun, and the Jilin Municipal Government entrusted agents Li Wenqi and Zhang Dehai to participate in the litigation. The case is now closed.

The original judgment found that in March 2014, the "Haitian" brand "Children's Soy Sauce" (200ml of Iron Fortified Brewed Soy Sauce), which was supplied by the plaintiff to the Eurasian Shangdu and other supermarkets in Jilin City, prominently marked "children's soy sauce" on its product label, and explained in text that "it is rich in iron elements, has a soft and fragrant taste, and is suitable for children over one year old", with cartoon graphics. On May 6, 2015, based on reports from the public, the defendant filed an investigation into the suspected false publicity of the "children's soy sauce" involved in the case, and after investigation and evidence collection, it was confirmed that the "Haitian" brand "children's soy sauce" and the "Haitian" brand ordinary "seafood soy sauce" product standard number were consistent, and the ingredients were only more than the "seafood soy sauce" The nutritional enhancers "ethylenediamine tetraacetate", white sugar, and dried scallops were also consistent, and the label values of the core nutrients were also consistent, and the plaintiff failed to provide relevant scientific basis for children's food. On July 17, 2015, the defendant Changyi Industrial and Commercial Bureau mailed the plaintiff a notice of the administrative punishment hearing, informing the plaintiff of the facts, reasons, basis and content of the penalty to be imposed, and informing the plaintiff of the right to make statements and defenses in accordance with the law. On August 7, 2015, the defendants held a hearing. On November 4, 2015, the defendant Changyi Industrial and Commercial Bureau issued the Administrative Punishment Decision No. 13 (2015) of Jishi Industry and Commerce Changhui Branch (2015), which found that the act of labeling "high-salt dilute fermented soy sauce" containing "iron" fortified with nutrients as "children's soy sauce" deceived and misled consumers' right to know the true attributes of the goods and the right to correct choice, violating Articles 8, 18 and 20, Paragraph 1 of the Consumer Rights and Interests Protection Law" Proprietors providing consumers with information such as the quality, performance, use, and validity period of goods or services shall be truthful and comprehensive, and must not make false or misleading publicity." According to the first paragraph of article 56 of the Consumer Rights and Interests Protection Law, "in any of the following circumstances, in addition to bearing corresponding civil liability, other relevant laws and regulations that provide for the punishment organs and punishment methods shall be carried out in accordance with the provisions of the laws and regulations..." The provisions of item 6 "False or misleading publicity of goods or services" are transferred to the "Anti-Unfair Competition Law" for punishment. According to the first paragraph of Article 24 of the Anti-Unfair Competition Law, "whoever uses advertisements or other methods to make misleading false publicity about goods, the supervision and inspection department shall order the illegal act to stop, eliminate the impact, and may impose a fine of between 10,000 and 200,000 yuan according to the circumstances", order the plaintiff Haitian Company to immediately stop the illegal act and impose a fine of 150,000 yuan. The plaintiff, Haitian, has paid the fine. Dissatisfied with the penalty decision, the plaintiff applied for administrative reconsideration on December 17, 2015. On March 10, 2016, the Jilin Municipal Government issued the Administrative Reconsideration Decision No. 44 (2015) of the Jilin Municipal Government, upholding the Defendant's Administrative Punishment Decision of jishi Industry and Commerce Changshu Zi (2015) No. 13. The plaintiff was dissatisfied and filed a lawsuit, which was accepted by this court on April 5, 2016.

The court of first instance held that the evidence provided by the defendant Changyi Industrial and Commercial Bureau could prove that the "Haitian" brand "children's soy sauce" was just ordinary iron-fortified brewed soy sauce, rather than the "children's soy sauce" marked by the plaintiff, the plaintiff failed to provide evidence to prove that "children's soy sauce" was used as the relevant scientific basis for children's food, the soy sauce package advertised on the case was "suitable for seasoning and use for children over one year old" was inconsistent with the facts, and the defendant's behavior was identified as misleading publicity, infringing on the consumer's right to know, and was not improper. The plaintiff claimed that "children's soy sauce" was only a name and did not constitute publicity, but the words and graphics of "children's soy sauce" and "suitable for children over 1 year old" were prominently used in the outer packaging of the product, which was sufficient to play a role in publicizing the function and use of the product, and the plaintiff's statement was not adopted by this court. The evidence provided by the defendant Changyi Industrial and Commercial Bureau can also prove that the "Haitian" brand "children's soy sauce" was sold within the changyi district of Jilin City, so the defendant has jurisdiction over the plaintiff's actions. According to the provisions of Article 32, Paragraph 1, Article 56, Paragraph 1, Item 6 of the Law of the People's Republic of China on the Protection of Consumer Rights and Interests, Paragraph 2 of Article 3 and Paragraph 1 of Article 24 of the Law of the People's Republic of China against Unfair Competition, the defendant Changyi Industrial and Commercial Bureau, as the administrative organ for industry and commerce, has the right to supervise and inspect and punish accordingly the suspected false or misleading publicity and acts of unfair competition, and the plaintiff believes that the defendant's reason for exceeding its authority cannot be established. Paragraph 1 of Article 24 of the Anti-Unfair Competition Law of the People's Republic of China stipulates: "Where business operators use advertisements or other methods to make misleading false publicity about goods, the supervision and inspection departments shall order them to stop the illegal conduct and eliminate the impact, and may impose a fine of between 10,000 and 200,000 yuan according to the circumstances." "The administrative penalties imposed by the defendants were not improper within the scope and scope prescribed by law. In summary, the administrative punishment behavior made by the defendant Changyi Industrial and Commercial Bureau was conclusively evidenced, the laws and regulations were correct, the legal procedures were in line with the statutory procedures, and the punishment was reasonable. The defendant Jilin Municipal Government made an administrative reconsideration act in accordance with legal procedures, the procedure was legal, and the plaintiff's reasons for arguing that the Jilin Municipal Government's reconsideration decision was illegal could not be established. Therefore, in accordance with the provisions of Article 69 of the Administrative Procedure Law of the People's Republic of China, the judgment rejected the litigation claims of the plaintiff, Foshan Haitian Seasoning Food Co., Ltd.

Haitian Company appealed: First, special provisions in different legal norms take precedence over general provisions, and the Food Safety Law clearly stipulates that matters involving food labeling should be supervised and managed by the food and drug regulatory authorities, so the appellee's administrative actions exceeded their authority, and at the same time, the law was wrong, and the penalty decision made should be revoked according to law. 1. Compared with the supervision and management power of commodities held by the industry and commerce department, the management power of the food and drug regulatory department on food belongs to the special authority. Article 125 of the Food Safety Law clearly stipulates that "the food with labels and instructions that do not conform to the provisions of this Law shall be exercised by the food and drug supervision and administration departments of the people's governments at or above the county level." "The law grants the administrative punishment power related to food labeling to the food and drug regulatory authorities, which is more conducive to the effective management of food and prevents deviations in the applicable law." 2. The penalty decision cites the national food safety standards "General Principles for The Labeling of Prepackaged Food", "Food Safety Law", etc. to argue that the so-called food label constitutes misleading publicity, while the "transfer" applies the "Anti-Unfair Competition Law" enforced by the industry and commerce department, expanding the administrative punishment power in disguise by wrongly applying the law, which obviously exceeds the authority. 2. Even if food is regarded as a general commodity, the appellee has no jurisdiction over the case. 1. The appellee did not report to the provincial-level industry and commerce department for the record before filing the case, and the procedure was illegal. 2. The appellee did not provide the normative documents on which the administrative punishment was based in accordance with law at the first instance, which also showed that his punishment had no legal and functional basis. 3. The punishment decision is illegal in the investigation and punishment procedure, and the appellant's right to make a statement and defense is not fully guaranteed. IV. The facts identified in the punishment decision are unclear and the evidence is insufficient. The penalty decision only relied on subjective inferences to determine that food labels constituted misleading propaganda, and did not produce evidence on the facts of elements such as "misleading" and "publicity", which showed that its evidence was insufficient. 5. The penalty decision exceeds the discretionary standard and is obviously improper. According to Section 6 of the Administrative Punishment Discretionary Rules of the Administrative Administration System of Jilin Province for Industry and Commerce, item 6.10 of the discretionary criteria of the Anti-Unfair Competition Law applies: "Where the value of the goods is less than 100,000 yuan, or the circumstances are relatively minor, a fine of between 10,000 and 50,000 yuan shall be imposed". Assuming that it constitutes misleading false publicity, the penalty of 150,000 yuan according to the value of the goods determined by the appellee also exceeds the discretionary rule. In summary, the administrative punishment given by the appellee to the appellant violated substantive law and procedural law and had no factual and legal basis; the first-instance judgment found that the facts were unclear and the law was wrongly applied. Request that the first-instance judgment be revoked in accordance with law, and that the administrative punishment decision and reconsideration decision made by the appellee be revoked.

The Changyi Industrial and Commercial Bureau argued that the court of first instance found that the facts were clear and the application of law was correct. The penalty decision made by the Bureau is based on the Anti-Unfair Competition Law and the Consumer Rights and Interests Protection Law, and these two laws are special provisions in protecting the legitimate rights and interests of consumers and stopping unfair competition, rather than general provisions. Although the goods referred to in this case are food and the false publicity acts are based on food labels and food packaging as the carrier, it cannot be understood that the Food Safety Law is applied first, so as to determine that the industrial and commercial organs have exceeded their authority to enforce the law. The false publicity violations determined by the Bureau refer to the misleading false publicity conducted by the appellant through additional text descriptions, graphics and advertising language in addition to the statutory content and matters of food labeling. The object of our protection is a fair, just and open market competition order, and the object of protection is the legitimate rights and interests of consumers. The principles in the Standardization Law and the Food Safety Law are quoted in the penalty decision, but only to clarify the statutory concept and true attributes of the commodity, and there is no problem of ultra vires law enforcement and applicable law errors. 2. The Bureau shall enjoy jurisdiction over the case in accordance with law, and the procedures for filing the case shall be lawful and valid. (1) The Notice of the State Administration for Industry and Commerce on Issues Related to the Supervision of Advertisements in Commodity Packaging (Industry and Commerce Guangzi (2005) No. 173) and the Guiding Opinions on Strengthening the Coordination of Advertising Law Enforcement cases (Industry and Commerce Guangzi (2004) No. 163) cited by the appellant are normative documents within the industrial and commercial system, which only have guiding significance for work, are not legally binding, and should not be used as a legal basis, and their premise is applicable to the punishment of advertising violations in accordance with the Advertising Law, which has nothing to do with this case. (2) The Bureau's case filing procedures are lawful and valid. 1. Reporting on the same day, verifying on the same day, and filing a case on the same day does not violate legal procedures or violate work logic. 2. Industrial and commercial organs have the obligation to protect the legitimate rights and interests of whistleblowers, anonymous reports are legal, and their legality cannot be questioned on the basis of professionalism. 3. Case-handling personnel are designated by the case-handling organ and then submitted to the director in charge for approval, which is in line with the actual work and in line with the Provisions on Administrative Punishment Procedures for Administrative Organs for Industry and Commerce. 3. The penalty procedure fully guarantees the appellant's right to legal remedies. (1) The Bureau served the Appellant with the Notice of Administrative Punishment Hearing in accordance with the law, fully guaranteed his right to make a statement and a defense, and convened a hearing. (2) As for the internal documents of the Bureau, such as the Approval Form for Administrative Punishment Decisions, the Report on The Conclusion of Cases, and the Draft Of the Penalty Decisions, even if they are flawed, they do not affect the appellant's substantive and procedural rights and interests. IV. There is sufficient evidence of the facts of the false publicity conduct as determined in the punishment decision. The facts of the violation and the main evidence identified in the penalty decision are already very clear and will not be repeated here. The "Inspection Report" of the commodity is tested according to the production standards it labels, and the legal labeling also refers to the legal matters marked by it, and the false publicity acts identified by the Bureau are the words, graphics, and advertising slogans other than the legal content of the labels on the outer packaging of the goods. The legal authenticity of its products is ordinary iron-fortified brewed soy sauce, rather than "children's soy sauce" specially produced for children. As for the addition of "white sugar" and "dried scallops", this fact does not change this fact, and the "seafood soy sauce" produced by it also adds raw materials such as "white sugar" and "dried scallops". V. The punishment decision applies the law correctly and the punishment is appropriate. The "Several Provisions of Jilin Province on Regulating Administrative Law Enforcement Acts Involving Enterprises" and the "Measures of Jilin Province to Regulate the Discretionary Power of Administrative Punishment" cited by the appellant are internal normative documents of the industrial and commercial system and have no legal effect. The Bureau fully refers to the Guiding Opinions of the State Administration for Industry and Commerce on the Correct Exercise of Administrative Discretion of Administrative Penalties by the Administration for Industry and Commerce, in view of the particularity of children's food, that is, children are in a critical period of growth and development, the quality of children's food directly determines their physical and mental health; and children themselves do not have the right to choose and discriminate in purchasing goods, and children's parents are generally misled out of care for their children. If this kind of illegal behavior is not stopped, its development will greatly disrupt the market, so that production enterprises will not focus on improving the inherent quality of products, but are keen on hyping concepts, gimmicks, and engaging in false propaganda, which is bound to seriously disrupt the order of market competition. Therefore, the appellant was fined 150,000 yuan, which was a heavier punishment. It is worth emphasizing that the act of false publicity has nothing to do with the production and sales volume and inherent quality of its goods, nor is it a statutory constituent element for determining its false publicity. Since last year, the Bureau has carried out special rectification with the theme of "children's food" suspected of false propaganda and handled a number of typical cases. In addition to this case, there was also a penalty of 100,000 yuan in the "Qingdao Bailemai Food Co., Ltd. for Misleading Publicity Case"; and 200,000 yuan was executed after the second-instance trial won the case. "Liaoning Shengmai Food Co., Ltd. made misleading publicity, infringement of consumer rights and interests" penalty of 150,000 yuan, the actual implementation of 300,000 yuan. The appellant could not make an erroneous conclusion that the penalty was improper by simply comparing the amount of punishment imposed by Qingdao Bailemai with this case. In summary, the facts of the administrative punishment acts of the Bureau are clear, the evidence is sufficient, the characterization is accurate, the application of law is correct, and the punishment is appropriate. The Jilin Municipal Government also made an administrative reconsideration decision to uphold the administrative penalties imposed by the Bureau in accordance with the law. The appeal was rejected in accordance with the law and the first-instance judgment was upheld.

The Jilin Municipal Government argued that the facts of the reconsideration decision made by the Jilin Municipal Government were clear and the procedures were legal. The first-instance judgment found that the facts were clear, the law was applied correctly, and the appellant's grounds for appeal were not established. The appeal is rejected in accordance with the law and the original judgment is upheld.

At the second-instance trial, the appellant adduced four more pieces of evidence on the basis of the evidence at the original trial, and after review, the four pieces of evidence provided by the appellant could be used as reference materials for the handling of the case and were not new evidence. The appellee did not provide new evidence, which was provided at the first instance.

The facts ascertained by this court through trial are consistent with those in the first instance and will not be repeated.

This court held that: First, in this case, the appellee only investigated and dealt with the issue of false publicity such as the text descriptions, patterns and propaganda language added by the appellant on the food label, and did not involve the safety and quality of food, and the investigation and handling of false publicity was within the competence of the administrative organ for industry and commerce, so the appellant's view that the appellee exceeded his authority was not established. After the products produced by the appellant were reported by consumers in the local sales process, the Changyi Industrial and Commercial Bureau of the appellee began to file a case for investigation and punishment, and according to the provisions of the Administrative Punishment Law on "administrative punishment shall be under the jurisdiction of the administrative organ of the place where the illegal act occurred", the Changyi Industrial and Commercial Bureau has jurisdiction over the case according to law. Second, from the label of the outer packaging of the soy sauce products sold by the appellant to the outside world, it is indeed marked with "children's soy sauce", "rich in iron elements, soft and fragrant, suitable for children over one year old to taste and use...", and other misleading words to describe and publicize the products, while the appellant labeled and publicized the "children's soy sauce" without the product test reports or relevant licenses issued by the state and relevant departments for children's age groups as a basis, so its publicity behavior is obviously misleading. Lack of objective authenticity. The appellant's conduct not only violated the relevant provisions of the Consumer Rights and Interests Protection Law, but also violated Article 9 of the Anti-Unfair Competition Law of the People's Republic of China, which stipulates that "business operators shall not use advertisements or other methods to make misleading false publicity about the quality, production composition, performance, use, producer, validity period, and place of origin of goods". Therefore, the appellee's administrative punishment of the appellant's illegal acts in accordance with the law is in accordance with the law, and it is not improper since the amount of punishment does not exceed the statutory range. The administrative reconsideration of the Jilin Municipal Government maintains that the penalty decision is correct and should be supported.

In summary, the original judgment found that the facts were clear, the law was correct, and the trial procedures were lawful, and should be upheld in accordance with law. The appellant's claim of appeal is not established and is not upheld by this Court. In accordance with the provisions of article 89, paragraph 1, subparagraph (1) of the Administrative Procedure Law of the People's Republic of China, the judgment is as follows:

The appeal was dismissed and the original judgment was upheld.

The acceptance fee of 50 yuan for the second-instance case was borne by the appellant, Foshan Haitian Seasoning Food Co., Ltd.

This judgment is final.

Judge Wang Jing

Judge Qian Yan

Acting Judge Guo Juanjuan

September 20, 2016

Scrivener Sui Yutong

Source: China Judgment Documents Network