In Japan, the Act against Unjustifiable Premiums and Misleading Representations (AUPMR) serves as the primary law regulating the content of consumer-oriented advertisements.

Key enforcement and regulatory authorities include the Consumer Affairs Agency (CAA), local governments and the Japan Fair Trade Commission (JFTC).

The CAA and local governments can issue cease-and-desist orders for violation of the AUPMR. Furthermore, for violations of Article 5(i) and (ii) of the AUPMR, the CAA can issue orders to pay surcharges. In contrast, the JFTC only has authority to investigate the case and report it to the CAA.

Article 5 states that no entrepreneur may make a representation as provided for in any one of the following items in connection with the transaction of goods or services which the entrepreneur supplies:

• (i) any representation where the quality, standard or any other particular relating to the content of goods or services is portrayed to general consumers as being significantly superior to that of the actual goods or services, or is portrayed as being, contrary to fact, significantly superior to those of other entrepreneurs who supply the same kind of or similar goods or services as those supplied by the relevant entrepreneur, thereby being likely to induce customers unjustly and to interfere with general consumers’ voluntary and rational choice-making; and
• (ii) any representation by which price or any other trade terms of goods or services could be misunderstood by general consumers to be significantly more advantageous than the actual goods or services, or than those of other entrepreneurs who supply the same kind of or similar goods or services as those supplied by the relevant entrepreneur, thereby being likely to induce customers unjustly and to interfere with general consumers’ voluntary and rational choice-making.

Under the AUPMR, the business operator – which means a person or entity engaged in commerce, the manufacturing industry, the financial industry or other businesses – can be held liable when it makes a misleading representation for the transaction of goods or services that it supplies.

The AUPMR regulates “representations” made by a business operator as a means of inducing customers regarding the content of goods or services supplied by the business operator, or the trade conditions or other matters concerning the transactions that are designated by the Prime Minister. This includes not only flyers and web advertisements but also sales pitches, etc.

No prior approval from the government or other authorities is required to make “representations”.

Intellectual property rights are protected by laws such as the Copyright Act; therefore, it should be noted that the use of the intellectual property can infringe those rights. While there are no specific laws concerning portrait rights, they are protected, allowing claims for damages or injunctions against infringement.

When a business operator (or a trade association) concludes or establishes an agreement or rules for preventing violation of the AUPMR and obtains approval from the Commissioner of the CAA and the JFTC, the business operator’s representation does not constitute misleading representation as long as it makes representation in accordance with the agreement or rule.

The participation in the agreement is voluntary, and a business operator may freely withdraw from it.

Consumers can file a lawsuit against the business operator, claiming for damages based on tort, and claiming a refund based on the invalidity of the contract.

A qualified consumer organisation can bring an injunction and redress for damages to consumers.

A case was recently decided in favour of the business operator for the first time, in a lawsuit for the revocation of an administrative disposition by the CAA, under the AUPMR.

There are no special concerns that advertisers should keep in mind.

The AUPMR was enacted in 1962 and was initially overseen by the JFTC. In 2009, oversight of the AUPMR was transferred to the newly established CAA to allow for more proactive enforcement against misleading representations to consumers. Since then, the number of enforcements concerning misleading representations has increased.

Under the AUPMR, a surcharge was implemented in 2014, the stealth marketing regulation was implemented in 2023 and the commitment procedure was enacted in 2024.

The determination is based on whether the representation indicates that the content (quality, standard, etc) of goods or services or the trade conditions of the transaction are significantly superior or more advantageous than they actually are.

As long as they fall under the definition of “representations” referred to in 1.4 What is Advertising?, all representations are subject to regulation under the AUPMR.

The AUPMR requires materials indicating reasonable grounds that support the representation, such as results obtained through testing and investigation, opinions of experts, expert organisations or specialised institutions, or academic literature, and so on. The contents demonstrated in the materials need to be approximately aligned with the displayed effects of representation.

If the content of a demonstration indicates that the product or service is significantly superior to what it actually is, this may constitute a misleading representation under the AUPMR.

Additionally, if the advertiser is found to have been involved in determining the demonstration’s content without a disclosure, such as public relations (PR) – for instance, when requesting an influencer to perform the demonstration – it can be categorised as stealth marketing, which is prohibited under the AUPMR.

If endorsements and testimonials are considered a business operator’s representations but are also recognised as being difficult for general consumers to identify as such, this constitutes a violation of the regulation of stealth marketing under the AUPMR.

Additionally, such representations can constitute misleading representations under the AUPMR if the endorsements and testimonials are false or if their contents are modified.

There are no special rules that apply to environmental claims in advertisements. Nonetheless, if a business operator makes a representation that misleads general consumers into regarding the impact on the environment as less than it is, this can constitute a violation of the AUPMR. An administrative disposition was made against such a representation in recent years.

There is a legal obligation to display specified mandatory information in advertisements under the Act on Specified Commercial Transactions (ASCT) regarding certain types of transaction.

In addition to misleading representations on quality and superiority and on transaction terms, the AUPMR also covers other types of unjustifiable representations designated by the Prime Minister. These designated representations are:

• misleading representations concerning the country of origin of products;
• representations concerning soft drinks without fruit juice;
• misleading representations concerning the cost of consumer credit;
• representations concerning bait advertising;
• representations concerning bait advertising for real estate;
• misleading representations concerning paid nursing homes; and
• representations that are difficult for general consumers to discern that they are made by business operators (stealth marketing).

There are no special rules that address stereotyping in advertising or inclusion, diversity and equity.

There are no special rules related to advertising to children.

There are currently no special rules related to “dark patterns” in advertising.

The use of sponsor identification or branded content can infringe a trade mark protected under the Trademark Act or constitute an unfair competition conduct violating the Unfair Competition Prevention Act. 

If the advertising that has the look and feel of editorial or entertainment content is considered a business operator’s representation, but is also recognised as being difficult for general consumers to identify as such, this constitutes a violation of the AUPMR.

Comparative advertising claims are also subject to regulation under the AUPMR.

The AUPMR does not restrict using the name of a competitor or a competitor’s trade mark, but the use thereof can infringe intellectual property rights (such as the trade mark or copyright), depending on the specific facts of the case.

If the competitor’s representation infringes the intellectual property rights of the advertiser, the advertiser can claim damages based on tort and seek an injunction based on intellectual property laws.

If the competitor makes a misleading representation, the advertiser can bring an injunction and claim compensation for damages, alleging that the representation constitutes unfair competition conduct under Unfair Competition Prevention Act.

An advertiser can report the case to the CAA, but it is at the CAA’s discretion whether to investigate and issue an administrative disposition.

There are no special rules related to ambush marketing.

If the marketing uses a trade mark or copyright, etc, it can infringe intellectual property rights (such as the trade mark or copyright) and can constitute unfair competition conduct.

There are no specific rules that apply only to online or social media advertising.

Liability depends on the advertiser’s involvement in determining the content of the representation.

Regarding content posted by a third party on a website operated by an advertiser, advertising regulations including the AUPMR may be applied to the advertiser, as the entire website is likely to be deemed to constitute a representation by that advertiser.

In contrast, concerning social media, the advertiser will be held responsible for compliance with advertising regulations if they are assessed as having caused the third party to make the post, either explicitly or implicitly.

Advertisements and confirmation screens regarding contract details prior to the completion of applications on social media platforms may also be subject to the legal obligation to display mandatory information under the ASCT.

There are no unique rules or regulations that apply to the use of major social media platforms.

Regarding sending an email for marketing, the Act on Regulation of Transmission of Specified Electronic Mail (ARTSEM) requires the consent of the recipient, in principle. On violation of the ARTSEM, an administrative disposition ordering improvement is issued.

There are no specific rules applicable to inbound and/or outbound telemarketing.

The ARTSEM (described in 6.1 Email Marketing) is applicable to text messaging.

Under the Act on the Protection of Personal Information (APPI), personal data may only be used within the scope of the purposes of use that has been predetermined and publicly announced (or notified to the individual). If consumer advertising is not included in those stated purposes of use, targeted advertising or retargeting cannot be performed.

There are no specific rules that apply to collection or use of personal information from children.

There are no other particularly important rules related to advertising.

Under the AUPMR, the offering of premiums by means of lotteries is restricted.

The maximum value of a single premium is limited to 20 times the value of the transaction to which the premium is attached. (If the transaction value is JPY5,000 or more, the limit is capped at JPY100,000.)

Additionally, the total value of all offered premiums must not exceed 2% of the projected total sales revenue of the transaction.

Even in cases where the winner is determined by skill-based competition, the offering of premiums is subject to the AUPMR’s prize restrictions, without distinction from cases determined by chance, such as lotteries.

Unless the facility is categorised as a game centre or similar establishment, no special prior permission is generally required.

Discounts that deviate from the scope of normal business practices are subject to the premium restrictions under the AUPMR.

Furthermore, excessively low pricing that unduly affects the competitive environment may constitute a violation of the Antimonopoly Act.

In the case of mail-order sales targeting consumers, there is an obligation to clearly specify the contract details, including the automatic renewal terms, in advertisements and on the application form/final confirmation screen prior to the application.

There are no legally binding rules or guidance related to the use of artificial intelligence (AI) in connection with the development of advertising content.

There are no special rules related to making claims that a product is developed through the use of AI, is powered by AI or has AI-related capabilities.

There are no special rules related to the use of chatbots.

The Financial Instruments and Exchange Act and the Payment Services Act are applicable to the advertising, marketing or sale of cryptocurrency and/or non-fungible tokens (NFTs).

There are no special rules or regulations in this jurisdiction that apply to advertising within the metaverse.

Regarding the advertisements of drugs and medical devices, the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices prohibits exaggerated advertisements (including statements leading to the false impression of certification by a physician, etc) and advertisements before the requisite approvals are obtained. 

There are no special rules related to the placement of products in entertainment content. The AUPMR, including the stealth marketing regulation, may regulate this area depending on the specific facts of the case. 

It is necessary to examine each product and service on a case-by-case basis.