In todays commercial landscape, celebrity endorsements have become a vital marketing strategy for companies to promote products and services. Leveraging their massive influence and fan base, celebrities can rapidly boost brand recognition and product sales. However, alongside these significant commercial benefits come growing legal risks. In recent years, lawsuits stemming from celebrity endorsements have become increasingly common.
Based on the recent cases of celebrity endorsement disputes and current laws and regulations, this paper systematically summarizes the core legal risks of celebrity endorsement, and provides feasible risk control strategies for celebrities, their agent teams and legal practitioners to build a legal safety line as reference.
Research background and problem proposal
According to data from the State Administration for Market Regulation, nationwide administrative penalty cases involving celebrity endorsements grew at an average annual rate of 23.7% from 2020 to 2025. The total value of civil disputes related to these endorsements surged from 860,000 yuan in 2020 to 3.42 million yuan by 2025 (all figures are derived from big data analysis and provided for reference). This trend demonstrates that celebrity endorsements have evolved from mere commercial partnerships legally regulated activities requiring strict compliance with regulatory standards.
As public figures, celebrities endorsement activities carry significant demonstrative influence and market guidance power. Article 38 of Chinas Advertising Law (2018 Amendment) first explicitly defines natural persons as advertising endorsers, establishing legal obligations such as "duty of experience" and "truthfulness guarantee." However, judicial practice has revealed systemic deficiencies in the industrys legal risk awareness and prevention mechanisms, with frequent disputes arising from celebrities failure to fulfill these obligations, product quality defects by advertisers, or endorsements for competing products under contract agreements.
Categorized analysis of legal risks of celebrity endorsement
In practical operations, aside from project-based business models in film, television, music, and variety shows, celebrity endorsements for brands and promotional activities constitute one of the primary means for stars to obtain commercial returns. However, while bringing benefits to celebrities, these actions also involve a series of potential risks (product liability, contractual breach liability, artist ethics) and multifaceted (civil, administrative, and even criminal) legal liabilities. We have preliminarily categorized these risk types to clarify the distinct characteristics of legal risks at different stages.
(1) Risk of false publicity: from administrative violation to civil liability
Typical case: Jing Tians endorsement of false advertising administrative punishment case
1. Case:
In May 2022, the market regulatory department of Guangzhou city imposed administrative punishment on actress Jing Tian for illegal advertising endorsement:
Guangzhou Infinite Health Technology Co., Ltd. hired Jing Tian to endorse its "fruit and vege" products in advertisements. These products are classified as ordinary food items. The company failed to provide valid evidence demonstrating their claimed efficacy in "preventing absorption of fats and sugars." Despite being fully aware that ordinary food products cannot be advertised with therapeutic or health benefits under relevant regulations, and without proper verification of the products claimed effects, Jing Tian still promoted the products "fat and sugar absorption prevention" claims through her personal name and image in advertisements. This constitutes a violation of the Advertising Law. The illegal earnings from Jing Tians endorsement totaled 2.579 million yuan. In accordance with Article 61 of Chinas Advertising Law, the Tianhe District Market Supervision Bureau imposed administrative penalties on Jing Tian, confiscating illegal earnings and imposing a fine of 4.6422 million yuan (with total confiscated amount reaching 7.2212 million yuan).
2. Legal basis
Article 28 of Chinas Advertising Law stipulates: "Advertisements that deceive or mislead consumers through false or misleading content constitute false advertising. The following circumstances shall be deemed false advertising: (2) Information regarding a products performance, function, origin, purpose, quality, specifications, composition, price, manufacturer, validity period, sales status, honors received, etc., or information about a services content, provider, form, quality, price, sales status, honors received, and related commitments concerning goods or services, which deviates from actual conditions and substantially influences purchasing decisions..."
Article 61 of the Advertising Law stipulates: "Advertising endorsers who commit any of the following violations shall have their illegal gains confiscated by market regulatory authorities and be fined one to two times the amount of such gains: (1) Making recommendations or certifications in medical, pharmaceutical, or medical device advertisements in violation of Item 4 of Paragraph 1, Article 16; (2) Providing endorsements or certifications for health food advertisements in violation of Item 5 of Paragraph 1, Article 18; (3) Making recommendations or certifications for products or services they have not used or received in violation of Paragraph 1 of Article 38; (4) Recommending or certifying products or services in advertisements despite knowing or having reason to know that the advertisements are false."
3. Key points of legal determination
(1) Duty of Care: The celebrity failed to exercise due diligence in verifying essential product information regarding efficacy, ingredients, and qualifications. By blindly trusting promotional materials from advertisers or distributors, they neither raised objections nor declined endorsement requests for claims that clearly exceeded ordinary product functionality (e.g., medical benefits claimed by regular food products), thereby constituting "actual knowledge" of false advertising.
(2) Professional duty of care: The court has established the principle of "professional duty of care" in many cases, and believes that stars, as professional spokesmen, should bear a higher duty of review for the authenticity of the content than ordinary consumers.
(2) t and several liability risk: increased obligations in high-risk areas
Typical case: a civil compensation case of spokesperson caused by the explosion of a P2P platform
1. Case:
In 2018, Hunan TV host Du Haitao created several video ads for the online investment platform Wanglibao. When Wanglibao later collapsed, Du Haitao was sued by a Shandong investor. The plaintiff claimed that as the platforms spokesperson, Du had failed to fulfill his duty of due diligence, demanding compensation of 46,381 yuan in actual losses plus 12,888 yuan in anticipated investment returns.
2. Legal basis
Article 56 of the Advertising Law stipulates: "For false advertisements concerning goods or services vital to consumers lives and health that cause harm, the advertising operators, publishers, and endorsers shall bear t liability with the advertisers. For false advertisements of goods or services not covered by the preceding provision that cause harm, those advertising operators, publishers, and endorsers who knowingly or should have known about the advertisements falsity but still design, produce, distribute, recommend, or endorse it shall bear t liability with the advertisers."
3. Key points of legal determination
(1) Responsibility priority: In judicial practice, in the field of goods/services related to life and health, "no-fault t liability" is implemented; in other fields, "presumption of fault liability" is applied;
(2) Determination of causal relationship: The court adopts the "enhanced trust theory", that is, whether the celebrity endorsement behavior substantially enhances the transaction confidence of consumers.
(3) Contract performance risk: imbalance of interests caused by defects in the terms
Generally speaking, standardized endorsement contracts typically require celebrities or artists to commit during the contract period and for a certain post-contract period to refrain from violating relevant laws and regulations, abstain from drug use, and avoid making negative statements that could undermine national unity. These clauses aim to protect brands from severe losses caused by the celebrities reputation collapse or decline. However, ironically, celebrities and artists themselves may find themselves in a passive position due to brand partners product defects, political stances, or controversial endorsements from competitors.
Typical case 1: Li Wens "Chloe" endorsement contract termination case
1. Case:
In 2019, several international luxury brands were criticized for failing to respect Chinas territorial sovereignty. Coach was criticized for incorrectly labeling Taiwan and Hong Kong as independent nations, which hurt national sentiment and sparked public discontent and controversy. After the exposure of the Coach anti-China incident, spokesperson Liu Wen immediately announced on Weibo the termination of her collaboration with Coach, attaching a lawyers letter to clarify her position. In the statement, she emphasized the importance of Chinas sovereignty and territorial integrity, firmly upholding Chinas sovereignty. Another key focus arising from this was the potential hefty penalty fees that might be imposed.
Kouche later issued a statement respecting Lius decision to terminate the cooperation, stressing that it has never considered and will not make any claims against Liu in the future, and that both parties will work together to properly handle the follow-up matters.
2. Key points of legal determination
From the perspective of professional law, this case involves many complex legal issues such as jurisdiction and application of law, legitimacy of termination behavior and rationality of liquidated damages, which are worth in-depth analysis.
Without discussing specific jurisdictional issues, if the law of China is applied, the key to determining whether Liu Wen can unilaterally terminate the contract lies in whether Coachs actions meet the termination conditions stipulated in the contract. If the contract contains clauses such as "Coach shall not engage in acts that damage the spokespersons image" or "Coach shall not make statements or conduct that disgrace the dignity of China", and considering that Coachs actions harming the sentiments of the Chinese people would negatively impact Liu Wens image, then Liu Wen has the right to unilaterally terminate the contract in accordance with the contractual agreement.
Case 2: Ju Jingyis endorsement contract dispute with "Guoben Skincare"
1. Case:
In 2017, Shenzhen Xiandi Company signed a Brand Endorsement Agreement with Shanghai Jiushang Company, appointing Ju Jingyi as the brand ambassador for their "Guoben Skincare" line. The contract explicitly prohibited endorsements for products directly competing with those she was promoting. However, during the contract period, Ju Jingyi posted promotional content on social media platforms for multiple brands including Laneige, Lancôme, Avene, Yuxi, Saint Laurent, and Huaxizi. Shenzhen Xiandi Company claimed these products constituted direct competition with "Guoben Skincare," asserting that both Shanghai Jiushang and Ju Jingyi had breached the agreement. The company demanded full refund of all fees and payment of liquidated damages.
2. Legal basis
Article 509 of the Civil Code of the Peoples Republic of China The parties shall fully perform their obligations in accordance with the contract. The parties shall, in accordance with the nature and purpose of the contract and the trading practices, perform such obligations as notification, assistance and confidentiality in accordance with the principle of good faith.
Article 563 stipulates: "Under any of the following circumstances, the parties may terminate the contract:(4) one party delays in performing its obligations or commits other breach of contract which makes it impossible to achieve the purpose of the contract......"
3. Key points of legal determination
The determination of competitive relationship: Whether there is a competitive relationship can not be simply determined by the category of products or services, but should be comprehensively defined from the aspects of brand positioning, product price, consumer groups, substitutability in the market, sales channels and other aspects to determine whether there is direct competition between products.
Analysis and prevention of legal risks in celebrity endorsement
(1) Before endorsement
1. Risk points before endorsement
(1. The product or service has not been fully reviewed
If the star does not fully examine the products or services he or she is endorsing before acting as an endorser, it may lead to false publicity risks. For example, he or she will blindly endorse the products without verifying the quality, efficacy and qualification of the products.
(2. Choose an illegal and compliant partner
Collaborating with an illegal brand or agency may expose the star to legal disputes. For example, if the partner engages in illegal activities such as false advertising or tax evasion, the star may be implicated.
(3. The terms of the endorsement contract are not specified
The endorsement contract is an important legal document between the star and the brand. If the terms of the contract are not clear, disputes may arise between the two parties in the process of performing the contract. For example, the contract does not specify the term of the endorsement, the cost of the endorsement, the liability for breach of contract and other terms.
2. Risk prevention and control measures
(1. Adequate review of products or services
Before endorsing products or services, celebrities and their teams should engage professional agencies or lawyers to conduct a comprehensive review. The review should cover product quality, efficacy, certifications, market reputation, etc., ensuring that the endorsed products or services are legally compliant, authentic, and reliable.
(2 Choose a legal and compliant partner
When choosing partners, we should have an in-depth understanding of the brands reputation, qualification and business status. We should avoid cooperating with brands that have illegal behaviors or bad records to reduce legal risks.
(3. Agreement on core rights and obligations
a. Endorsement authority clause
The four-dimensional limitation method is adopted to clarify the scope of use —— time dimension (precise to year, month and day), space dimension (specify the specific media and region), content dimension (limit product model/service items), and method dimension (prohibited from being used in vulgar or illegal scenarios).
b. Risk isolation clauses
① Clearly enumerate scenarios that allow unilateral termination of contracts, including "the brand party being listed in the business abnormality list", "products failing quality inspections", "occurrence of major production safety accidents", and "the brand party publishing improper statements violating Chinas laws and regulations, committing or allegedly committing acts violating criminal or administrative laws and regulations, or violating Chinas laws, regulations, and policy requirements leading to criminal or administrative investigations or penalties".
② It is agreed that "if the infringement dispute occurs after the star has fulfilled the statutory review obligation, the brand party shall bear the ultimate responsibility", but it should be noted that this agreement cannot be opposed to the mandatory provisions of law;
③ Make it clear that the losing party shall bear the reasonable expenses such as attorneys fee and preservation fee.
(2) The period of endorsement
1. Risks in endorsement
(1. False propaganda
In the process of endorsement, if the brand and the star make exaggerated or false publicity for the products or services, it will constitute false advertising and bear corresponding legal responsibilities.
(2 Failure to perform the obligation of prior use
According to the Advertising Law, products or services endorsed by stars must have been used by them. If stars fail to fulfill the obligation of prior use and endorse products or services that have not been used, they will face administrative penalties.
(3. Endorsement of products or services that are prohibited
The Advertising Law clearly stipulates that some products or services are prohibited from being endorsed, such as medical care, drugs, medical devices, health food and so on. If stars endorse these products or services, it will be illegal.
2. Risk prevention and control measures
(1 Ensure that the publicity content is true and legal
In the process of endorsement, stars should strictly abide by the provisions of the Advertising Law and other relevant laws and regulations to ensure that the publicity content is true and legal. At the same time, the publicity content should be reviewed to ensure that it is consistent with the actual situation.
(2 Performance of prior use obligations
Before endorsing a product or service, the star should personally use the product or accept the service to ensure that he/she has a real experience and understanding of the product or service. In the endorsement publicity, he/she should recommend and prove based on facts, and should not endorse products or services that he/she has not used.
(3 Refuse to endorse products or services that are prohibited
Celebrities must understand the provisions in laws and regulations such as the Advertising Law regarding products or services prohibited from endorsement, and refrain from endorsing them. For example, products or services medical products, pharmaceuticals, medical devices, and health supplements are strictly prohibited from being endorsed. Celebrities should strictly comply with these regulations to avoid legal violations.
(III) After endorsement
1. Risks after endorsement
(1 Product quality problems
Celebrities may be held tly and severally liable if the products they endorse have quality problems that cause harm to consumers, such as defects in products that cause personal or property damage to consumers.
(2 Breach by the Brand Party
If the brand violates the contract, such as failing to pay the endorsement fee on time or using the celebritys portrait without authorization, the star needs to safeguard his/her rights and interests through legal channels.
(3 personal image damage
If the star has negative news during the endorsement period, such as illegal crimes, moral corruption, etc., it may affect its personal image, which may lead to the termination of the contract by the brand, or even cause legal disputes.
2. Risk prevention and control measures
(1 Focus on product quality and brand trends
After endorsement, the star should continue to pay attention to the quality of the products and the brand dynamics. If the product is found to have quality problems or the brand party commits illegal behavior, the star should take timely measures, such as terminating the endorsement contract or issuing a statement, so as to avoid being involved in it.
(2. Actively maintain personal image
Stars should pay attention to their own image management and avoid negative news during the period of endorsement. They should maintain a good public image, abide by laws and regulations and social ethics, and enhance their sense of social responsibility.
(3 Establishing a legal risk early warning mechanism
Stars and their teams should establish a legal risk early warning mechanism, conduct regular legal risk assessment on endorsement activities, find out potential legal risks in time, and take corresponding measures to prevent and resolve them.
conclusion
Behind the glamorous halo of celebrity endorsements lies a heavy burden of legal responsibility. From Jing Tians hefty fines to financial platform endorsement claims, from contractual traps to severe tax penalties, these cases all serve as a wake-up call: prudent ion, thorough due diligence, strict contract control, dynamic oversight, and adherence to tax laws are the essential path for celebrities to avoid endorsement-related legal risks. In an era of increasingly robust legal frameworks, stricter regulatory oversight, and heightened consumer awareness of rights protection, only by prioritizing legal compliance as the core of business considerations, enhancing professional legal expertise, and establishing comprehensive risk management systems can celebrities and their teams navigate the endorsement market steadily and achieve a win-win situation between commercial value and social responsibility. The legal red line must never be crossed; only through professional risk-avoidance capabilities can celebrities ensure the enduring vitality of their endorsement careers.
