Image: Chanel

A couple of skin-lightening products marketed to Chinese consumers have landed Chanel on the wrong side of market regulators. The French luxury titan has been hit with a $30,500 administrative penalty and a formal order barring it from making unsubstantiated claims in connection with its marketing of its Le Blanc Masque Healthy Light Creator Mask and Sublimage La Crème Ultimate Skin Regeneration Texture Suprême products, the Jing’an District Administration for Market Regulation recently announced. 

After receiving consumer complaints about the effectiveness of Chanel’s Le Blanc Masque and Sublimage La Crème, namely, in connection with the products’ advertised skin-lightening capabilities, the Jing’an District Administration for Market Regulation initiated a probe and found that despite Chanel’s marketing messages, neither of the two creams “contain ingredients [capable of performing] such functions.” Moreover, the market regulator stated that Chanel could not provide clinical substantiation to prove the merit of its product-performance claims, such as that they could “inhibit melanin” and “fade dark spots.”

In levying the fine and advertising ban on Chanel in a decision dated November 12, the Jing’an District Administration for Market Regulation cited violations of the Advertising Law of the People’s Republic of China, namely Article 28, which prohibits “any advertisement that defrauds or misleads consumers with any false or misleading content shall be a false advertisement,” as reported by Shanghai Daily. Specifically, the market watchdog pointed to paragraph 2 as applicable in the case at hand, as it defines a “false advertisement” as one in which there is “any inconsistency [between] the actual circumstances” of a product and the advertising claims made as to the product’s “performance, functions, place of production, uses, quality, specification, ingredient, price, producer, term of validity, sales condition, and honors received, among others, or the service’s contents, provider, form, quality, price, sales condition, and honors received, among others, or any commitments, among others.” 

Chanel has since amended its advertising in China, according to the Jing’an District Administration for Market Regulation. 

It is worth noting that Chanel’s descriptions for the same skincare products on the U.S. e-commerce site do, in fact, make mention of lightening and dark spot “diminishing” effects, thereby, raising potential substantiation questions in the U.S., which would fall within the realm of the Federal trade Commission. The description of the Le Blanc Masque Healthy Light Creator Mask, for example, cites lightening properties, describing the cream as “a three-in-one revitalizing, brightening and restoring formula [that] works overnight to cool as it helps restore skin’s healthy pure light.” It further states in connection with that product that “upon waking, the complexion is luminous and refreshed. Skin is 23 percent more radiant, 40 percent more hydrated and 23 percent more even-toned,” based on a “clinical evaluation of 23 women after four weeks of use.”

As for the Sublimage La Crème, Chanel’s e-commerce site lists in connection with the product that “skin is 52 percent more radiant and 36 percent more firm, while dark spots appear diminished by 32 percent” as a result of use, based on clinical evaluations of between 19 and 31 women for four weeks.

The Broader Picture for Chinese Cosmetics

Hardly the first company to come under fire in China in connection with its skincare offerings, La Mer was taken to task – or better yet, court – two years ago in China on false advertising grounds. Hao Yu, a well-known Chinese beauty blogger, filed a pre-lawsuit writ against La Mer and Estee Lauder in September 2018 in a civil court in Shanghai, alleging that despite La Mer’s representations about its marquee product, its pricey Crème de la Mer does not “restore damaged skin,” such as burn scars.

Alleging that Estée Lauder Co.-owned La Mer was making such “exaggerated” warranties on its official website in China (but not in the U.S. or other international versions of its site), Yu claimed that the $1 billion skincare company and its parent were running afoul of China’s false advertising law. In addition to a court order forcing La Mer to alter its advertising language in regards to the effects of its Miracle Broth™ and Crème de la Mer product, Yu asked the court to require La Mer to apologize to Chinese consumers who he claims have been deceived by the brand’s advertising statements, and compensate those who have purchased the products due to its misleading claims.

While the outcome in Yu’s case has not been publicized by the court, what is clear is that Chinese lawmakers have been working overtime in their efforts to overhaul regulations that govern China’s booming cosmetics industry. In February 2019, for instance, China’s Food and Drug Administration issued several new regulations in the cosmetics space, including an outright ban on companies’ abilities to marketing their cosmetics as having “medical benefits.”

More recently, in June 2020, the Chinese State Council released the Cosmetic Supervision and Administration Regulation (“Regulation”). A significant and long-awaited overhaul to the 30-year-old Cosmetics Hygiene Administration Regulation, the new Regulation will make a sweeping number of changes to the previously-existing law – from the inclusion of e-commerce-specific updates to addressing how the process of gaining approval for new ingredients will be handled, all of which place an emphasis on compliance throughout the entire life cycle of individual cosmetics and beauty products, and increases responsibilities of cosmetic license holders to ensure product safety and quality for the ultimate benefit of Chinese consumers. 

Aiming to “strengthen the management of cosmetic product safety and quality by shifting more of the burden to registrants and notifiers,” according to Keller and Heckman LLP’s David Ettinger, Yin, Dai, and Jenny Xin Li, the new Regulation will require registrants and notifiers of new cosmetic ingredients/products “to publish their reference materials in support of the product’s function claims on designated government websites” and fine annual reports for three years on the ingredient’s safety and usage to the local authority.

Slated to go into effect on January 1, 2021,the Regulation will also “classify cosmetic products into two categories per their inherent risk levels, i.e., ‘special cosmetics’ vs. ‘general cosmetics,’” and subjects “special cosmetics” – such as skin lightening products – to pre-market registration, while general cosmetics are subject to notification to the local administrative agencies.

Retail sales of cosmetics in China – from native Chinese companies to the cosmetics divisions of Western luxury goods purveyors, skincare companies, and big-names in beauty goods – increased by approximately RMB 40 billion ($5.72 billion) between 2018 and 2019, alone, valuing the market at a whopping RMB 300 billion ($42.91 billion) or more as of last year.