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### Introduction In today's commercial society, celebrity endorsement has become an important marketing method for enterprises to promote products and services. With their extensive influence and fan base, celebrities can rapidly improve brand awareness and product sales. However, the huge commercial value brought by celebrity endorsements is accompanied by increasingly prominent legal risks, and litigation disputes arising from celebrity endorsements have been common in recent years. In light of actual cases of celebrity endorsement disputes in recent years and current laws and regulations, this article systematically sorts out the core legal risk points of celebrity endorsements and provides practical risk control strategies, which can serve as reference for celebrities, their brokerage teams and legal practitioners to build a legal security line.

Research Background and Statement of Issues

According to data released by the State Administration for Market Regulation, administrative penalty cases involving celebrity endorsements recorded an average annual growth rate of 23.7% nationwide from 2020 to 2025, while the subject matter value of relevant civil dispute cases climbed from RMB 860,000 in 2020 to RMB 3,420,000 in 2025. (The above data are all compiled from big data and for reference only.) These data reflect that celebrity endorsement has evolved from a pure commercial cooperation act into a legal act that shall strictly comply with legal norms.

As public figures, celebrities' endorsement activities have strong demonstrative effects and market guiding influence. Article 38 of the *Advertising Law of the People's Republic of China (Revised in 2018)* explicitly includes natural persons into the category of advertising endorsers for the first time, and stipulates statutory obligations such as the obligation of use experience and the obligation of authenticity guarantee. However, in judicial practice, disputes involving celebrities frequently arise from their failure to perform statutory obligations, product quality defects of advertisers, endorsement of competing products in breach of contract and other causes, which exposes systemic defects of the industry in the awareness, prevention and control of legal risks.

Typological Analysis of Legal Risks of Celebrity Endorsement

In practical operation, excluding project-based business models such as those for film and television, music, and variety shows, celebrity endorsement of brands and their publicity and promotion activities for brands or products are one of the main ways for celebrities to obtain commercial returns. However, while bringing benefits to celebrities, such activities are also accompanied by a series of (product liability, liability for breach of contract, artist ethics, etc.) and multi-dimensional (civil, administrative, or even criminal) potential risks. We have carried out preliminary classification of the above risk types, so as to more clearly elaborate the characteristics of legal risks at different stages.

(I) Risks of False Publicity: From Administrative Violations to Civil Accountability

Typical Case: Administrative Penalty Case of Jing Tian's Endorsement of False Advertising

1. Case Facts:

In May 2022, the Guangzhou Municipal Market Regulatory Authorities imposed an administrative penalty on actress Jing Tian for her illegal advertising endorsement acts.

Guangzhou Wuxianchang Health Technology Co., Ltd. engaged Jing Tian as the advertising endorser for the "fruit and vegetable" food it produces and operates. The aforesaid "fruit and vegetable" food is general food, and the company has no valid evidence to prove that it has the effect of "blocking the absorption of fat and sugar". Jing Tian, who should have known that laws and regulations stipulate that general food shall not be promoted with claims of therapeutic, health care or other effects, and without verifying the relevant effects of the endorsed food through valid channels, still declared in the advertisement in her own name and image that the endorsed food has the effect of "blocking the absorption of fat and sugar". Such acts have violated the relevant provisions of the Advertising Law. The total illegal gains obtained by Jing Tian from the aforesaid illegal advertising endorsement amounted to RMB 2,579,000. In accordance with the provisions of Article 61 of the *Advertising Law of the People's Republic of China*, the Market Supervision and Administration Bureau of Tianhe District, Guangzhou Municipality issued an administrative penalty decision against Jing Tian, imposing confiscation of her illegal gains and a fine of RMB 4,642,200, with the total amount of confiscated gains and fine totaling RMB 7,221,200.

2. Legal Basis

Article 28 of the Advertising Law of the People's Republic of China stipulates that: "Where an advertisement deceives or misleads consumers with false or misleading content, it constitutes a false advertisement. An advertisement shall be deemed as a false advertisement under any of the following circumstances: (2) Information such as the performance, function, place of origin, intended use, quality, specification, ingredient, price, producer, term of validity, sales status, honors received of a commodity, or information such as the content, provider, form, quality, price, sales status, honors received of a service, as well as information such as promises related to the commodity or service, is inconsistent with the actual situation and has a material impact on purchasing behaviors......"

Article 61 of the Advertising Law of the People's Republic of China: "Where an advertising endorser falls under any of the following circumstances, the market supervision and administration department shall confiscate the illegal gains, and concurrently impose a fine of not less than one time but not more than two times the amount of the illegal gains: (1) Making recommendations or issuing testimonials in advertisements for medical treatment, pharmaceuticals or medical devices, in violation of the provisions of Subparagraph (4) of Paragraph 1 of Article 16 of this Law; (2) Making recommendations or issuing testimonials in advertisements for health food, in violation of the provisions of Subparagraph (5) of Paragraph 1 of Article 18 of this Law; (3) Making recommendations or issuing testimonials for goods that the endorser has not used or services that the endorser has not received, in violation of the provisions of Paragraph 1 of Article 38 of this Law; (4) Making recommendations or issuing testimonials for goods or services in advertisements when the endorser actually knows or should have known that the advertisements are false."

3. Key Points of Legal Determination

(1) Duty of Prudent Review: Where a celebrity fails to fulfill the duty of prudent review concerning key information such as the efficacy, ingredients and qualifications of the endorsed goods, readily credits the materials provided by the advertiser or advertising operator, and fails to raise objections to or refuse endorsement for publicity that obviously exceeds the functional scope of ordinary goods (such as ordinary food claiming therapeutic effects), such act constitutes a circumstance where the celebrity "knows or should have known" that the advertisement is false.

(2) Professional Duty of Care: Courts have established the principle of "professional duty of care" in a number of cases, holding that celebrities, as professional endorsers, shall assume a higher obligation to examine the authenticity of the endorsed content than that required of ordinary consumers.

(II) Risks of Joint and Several Liability: Increased Obligations in High-Risk Sectors

Typical Case: Civil Compensation Case Involving Endorsers Arising from the Collapse of a P2P Lending Platform

1. Case Facts:

In 2018, Du Haitao, a host of Hunan Satellite TV, filmed a number of video advertisements for Wanglibao, an online investment platform. Following the subsequent financial collapse of Wanglibao, Du Haitao was sued before a people's court by an investor from Shandong Province. The investor argued that, as the advertising endorser of Wanglibao, Du Haitao had failed to perform his examination obligation, and claimed compensation of 46,381 yuan for losses and 12,888 yuan for expected investment returns.

2. Legal Basis

Article 56 of the Advertising Law of the People's Republic of China stipulates that: "Where false advertisements for goods or services related to the life and health of consumers cause harm to consumers, the advertising agents, advertising publishers and advertising endorsers thereof shall bear joint and several liability with the advertisers. For false advertisements for goods or services other than those prescribed in the preceding paragraph that cause harm to consumers, if the advertising agents, advertising publishers and advertising endorsers thereof design, produce, act as agents for, publish such advertisements, or make recommendations or certifications therefor while clearly knowing or ought to have known that the advertisements are false, they shall bear joint and several liability with the advertisers."

3. Key Points of Legal Determination

(1) Order of Liability: In judicial practice, "no-fault joint and several liability" shall be adopted in the fields of commodities/services involving life and health, while "presumed-fault liability" shall apply in other fields.

(2) Determination of Causality: The court adopts the "reliance enhancement doctrine", that is, the criterion for determination is whether the celebrity endorsement act has substantially enhanced consumers' transaction confidence.

(III) Risks of Contract Performance: Imbalance of Interests Arising from Defective Contractual Clauses

Generally, standard endorsement contracts contain relevant clauses requiring that celebrities and performing artists shall undertake obligations including but not limited to abiding by relevant laws and regulations, refraining from drug use, and not making negative remarks that undermine China's national unity, both during the term of the contract and for a specified period after the expiration of the contract, so as to protect the brand owner from heavier losses caused by the celebrities'/performing artists' scandals or reputation deterioration. However, in practice, conversely, celebrities and performing artists may also be placed in a passive position due to contractual stipulations concerning the brand owner's product defects, political stances, endorsement of competing products and other related matters.

Typical Case No. 1: The Endorsement Contract Termination Case between Li Wen and Coach

1. Case Facts:

In 2019, a number of international luxury brands were criticized for failing to respect China's territorial sovereignty. Coach incorrectly marked Taiwan and Hong Kong as independent countries, which hurt Chinese national sentiments and triggered public dissatisfaction and controversy. After the exposure of Coach's China-insulting incident, its brand spokesperson Liu Wen immediately announced the termination of her cooperation with Coach on Weibo, and attached a lawyer's letter to state her position explicitly. In her statement, she emphasized the importance of China's sovereignty and territorial integrity, and firmly upheld China's sovereignty. Another key focus arising therefrom is the huge amount of liquidated damages that she may be exposed to.

Coach subsequently issued a statement, in which it expressed respect for Liu Wen's decision to terminate the cooperation, and emphasized that it has never considered, nor will it ever, lodge any claim for compensation against Liu Wen. The two parties shall jointly and properly handle the follow-up matters.

2. Key Points of Legal Determination

From a professional legal perspective, this incident involves multiple complex legal issues including jurisdiction, application of law, determination of the legality of contract termination, and the reasonableness of liquidated damages, and merits in-depth analysis.

Without delving into the specific issue of jurisdiction, where the law of China applies, the key to determining whether Liu Wen may unilaterally terminate the contract lies in whether Coach's conduct meets the termination conditions agreed in the contract. If the contract between the two parties contains clauses such as "Coach shall not commit any act that damages the image of the endorser" and "Coach shall not make any remark or commit any act that insults the dignity of China", given that Coach's act which hurts the feelings of the Chinese people will produce an adverse impact on Liu Wen's image, Liu Wen shall be entitled to unilaterally terminate the contract pursuant to the stipulations of the contract.

Typical Case II: Dispute over Ju Jingyi's Endorsement Contract for "Guoben" Skincare Products

1. Case:

In 2017, Shenzhen Xiandi Company and Shanghai Jiushang Company entered into the *Brand Endorsement Contract*, under which Ju Jingyi was appointed as the brand endorser for Shenzhen Xiandi's "Guoben" skincare products. The Contract stipulates that Ju Jingyi shall not endorse any products that are in direct competition with the aforesaid endorsed products. However, during the performance of the Contract, Ju Jingyi successively published promotional copies for products of multiple brands including Laneige, Lancôme, Origins, Yue-Sai, Yves Saint Laurent and Florasis on social media platforms. Shenzhen Xiandi Company contends that the aforesaid products are in competition with the "Guoben" skincare products, and that Shanghai Jiushang Company and Ju Jingyi have committed a breach of contract, thus shall refund all relevant fees and pay liquidated damages.

2. Legal Basis

Article 509 of the Civil Code of the People's Republic of China The parties shall fully perform their respective obligations as agreed. The parties shall abide by the principle of good faith, and perform obligations such as notification, assistance and confidentiality in accordance with the nature and purpose of the contract as well as trade practices.

Article 563 provides that: "A party may rescind the contract under any of the following circumstances: (4) Where one party delays performance of its obligations or commits any other act of breach of contract, which renders the purpose of the contract unachievable......"

3. Key Points of Legal Determination

Determination of Competitive Relationship: The existence of a competitive relationship shall not be determined merely on the basis of the broad categories of products or services. Instead, a comprehensive assessment shall be carried out from multiple perspectives such as brand positioning, product pricing, consumer groups, market substitutability and sales channels, so as to ascertain whether there is a direct competitive relationship between relevant products.

An Analysis of Legal Risk Points of Celebrity Endorsement and the Prevention and Control Thereof

(I) Prior to Endorsement

1. Pre-endorsement Risk Points

(1) Failure to conduct adequate review of products or services

Where a celebrity endorser fails to conduct sufficient review of the product or service to be endorsed prior to carrying out the endorsement, such act may lead to untruthful endorsement content and trigger the legal risk of false publicity. For example, the endorser blindly endorses a product without verifying relevant information such as the quality, efficacy and qualifications of the said product.

(2. Selection of illegal and non-compliant cooperating parties)

Cooperation with illegal and non-compliant brand owners or talent agencies may expose celebrities to legal disputes. For example, where a cooperating party commits illegal acts such as false publicity and tax evasion, the celebrity concerned may be implicated.

(3) Unspecified terms and conditions of endorsement contracts

An endorsement contract is a crucial legal document between a celebrity and a brand owner. Ambiguous contractual terms may lead to disputes between the two parties during the performance of the contract, for example, clauses such as the endorsement term, endorsement fee, and liability for breach of contract are not explicitly stipulated in the contract.

2. Risk Prevention and Control Measures

(1) Conduct a thorough review of products or services

Celebrities and their teams shall, prior to giving endorsements, entrust professional institutions or lawyers to conduct a comprehensive review of the products or services to be endorsed. The review covers such contents as product quality, efficacy, qualifications and market reputation, so as to ensure that the products or services are legal, compliant, authentic and reliable.

(2) Select lawful and compliant cooperating parties

When selecting a cooperation partner, you shall conduct in-depth due diligence on the credibility, qualifications and business conditions of the brand owner. You shall avoid cooperating with brand owners that have committed illegal or non-compliant acts or have adverse records, so as to mitigate legal risks.

3 Core Stipulations on Rights and Obligations

Endorsement Authority Clause

The "Four-dimensional Limitation Method" is adopted to clarify the scope of use, including the time dimension (accurate to year, month and day), the space dimension (specifying specific media and regions), the content dimension (restricting product models / service items), and the mode dimension (prohibiting use in vulgar or illegal scenarios).

b. Risk Isolation Clause

① Expressly enumerate the circumstances under which a party may unilaterally terminate the contract, including "the brand owner is included in the List of Entities with Abnormal Business Operations", "its products fail random quality sampling inspections", "a major work safety accident occurs", "the brand owner makes improper remarks violating the laws and regulations of China, commits or is suspected of committing acts in violation of criminal or administrative laws and regulations, or is subject to criminal or administrative investigation or penalty as a result of violating the laws, regulations and policy requirements of China", among others.

② It is stipulated that "The brand party shall bear the ultimate liability for any tort disputes that still occur even after the celebrity has fulfilled his/her statutory review obligations", but it shall be noted that such stipulation shall not prevail over the mandatory provisions of the law.

③ It is explicitly stipulated that reasonable expenses such as attorney fees and preservation fees shall be borne by the losing party.

(II) Endorsement Period

1. Risks Involved in Advertising Endorsement

(1) False Publicity

Where a celebrity, together with the brand owner, conducts exaggerated and false publicity of products or services in the course of endorsement, such act shall constitute false advertising, and the aforesaid parties shall bear corresponding legal liabilities.

(2) Failure to perform the obligation of prior use

Pursuant to the provisions of the *Advertising Law of the People's Republic of China*, products or services endorsed by celebrities must have been personally used by the said celebrities. Where a celebrity fails to fulfill the obligation of prior use and endorses products or services that he or she has not used, he or she shall be subject to administrative penalties.

(3) Endorsing products or services for which endorsement is prohibited.

The Advertising Law of the People's Republic of China explicitly provides that endorsement of certain products and services, such as medical services, pharmaceuticals, medical devices and health foods, shall be prohibited. Where a celebrity endorses the aforesaid products or services banned from endorsement, such conduct shall constitute an illegal act.

2. Risk Prevention and Control Measures

(1) Ensure that the publicity content is truthful and lawful.

Celebrities shall strictly abide by the provisions of the *Advertising Law of the People's Republic of China* and other relevant laws and regulations during the endorsement process, so as to ensure that the advertising content is authentic and lawful. In the meantime, they shall conduct examination and verification of the advertising content to ensure that it conforms to the actual facts.

(2) Perform the Obligation of Prior Use

Before endorsing any product or service, a celebrity shall personally use the said product or receive the said service to ensure that he/she has genuine experience and understanding of the product or service. In endorsement and publicity activities, the celebrity shall make recommendations and certifications in accordance with facts, and shall not endorse any product or service that he/she has not used.

(3) Refuse to endorse products or services for which endorsement is prohibited.

Celebrities shall understand the provisions on products or services for which endorsement is prohibited as stipulated in the *Advertising Law of the People's Republic of China* and other relevant laws and regulations of China, and refuse to endorse such products or services. For example, with respect to products or services for which endorsement is prohibited such as medical services, medicines, medical devices and health food, celebrities shall strictly comply with the relevant provisions to avoid violating the law.

(III) Post-endorsement

1. Post-endorsement Risks

(1) Product Quality Issues

Where products endorsed by celebrities have quality problems resulting in damage to consumers, the celebrities may be required to bear joint and several liability. For example, a defective product causes personal injury or property loss to consumers.

(2) Breach of Contract by the Brand Owner

If a brand owner breaches the stipulations of the endorsement contract, such as failure to pay the endorsement fee on schedule, unauthorized use of the celebrity's portrait, etc., the celebrity shall safeguard their legitimate rights and interests through legal channels.

(3) Damage to Personal Image

If an endorsing celebrity is involved in negative news during the term of endorsement, such as illegal and criminal acts, moral corruption, etc., such negative news may damage the celebrity's personal image, thereby causing the brand owner to terminate the endorsement contract, and even giving rise to legal disputes.

2. Risk Prevention and Control Measures

(1) Focus on product quality and brand trends

After entering into an endorsement contract, a celebrity endorser shall continuously pay attention to the quality of the endorsed products and the developments of the brand. Where the products are found to have quality problems or the brand owner commits any act in violation of laws and regulations, the celebrity endorser shall take timely measures, such as terminating the endorsement contract and issuing a public statement, to avoid being implicated.

(2) Actively maintain personal image

Celebrities shall attach importance to their own image management and avoid negative news during the endorsement period. They shall maintain a sound public image, abide by laws and regulations as well as social ethics, and enhance their sense of social responsibility.

(3) Establish a legal risk early warning mechanism

Celebrities and their teams shall establish a legal risk early warning mechanism, conduct regular legal risk assessments on endorsement activities, promptly identify potential legal risks, and take corresponding measures to prevent and resolve such risks.

Conclusion

Beneath the glamorous halo of celebrity endorsements lies the weighty burden of legal liability. From the hefty fine imposed on Jing Tian to recovery claims arising from endorsements for financial platforms, and from contract pitfalls to severe penalties for tax evasion, all these cases serve as a stern warning that prudent selection, in-depth due diligence, strict contract control, dynamic supervision and strict compliance with tax laws constitute the only path for celebrities to avoid legal risks related to endorsement activities. Against the backdrop of increasingly sound laws and regulations, continuously tightened regulation, and growing awareness of safeguarding legitimate rights and interests among consumers, celebrities and their teams can only achieve steady and long-term development in the endorsement market and realize a win-win outcome of commercial value and social responsibility by placing legal compliance at the core of their business considerations, improving their professional legal literacy, and establishing a sound risk control system. The red line of the law shall never be crossed. Professional risk prevention capability is the fundamental guarantee for the long-term viability of celebrities' endorsement business.