Regulatory Compliance

Responding to issues under the Act against Unjustifiable Premiums and Misleading Representations

What can advertising claim about a new product's effects? Are there problems with the way sale prices are compared? What information should an influencer include in a commissioned post? We receive inquiries about the Act against Unjustifiable Premiums and Misleading Representations (the "Premiums and Representations Act") from the planning stage of advertising and sales promotions. The Act regulates misleading representations and the provision of excessive premiums in connection with transactions involving goods and services.

Both the representation rules and the premium rules may apply to a single campaign. Before publication, the starting point is to organize the proposed advertising, supporting materials, and conditions for implementing the campaign. If concerns arise after publication, the starting point is to establish where and how the advertising is being displayed, the concerns raised, and the response deadline. This page directs readers to more detailed explanations according to the type of issue and the stage involved.

We assist corporate legal and marketing departments and management with identifying the applicable rules, reviewing proposed advertising and campaigns, and taking corrective action and responding to regulatory authorities after a problem has been identified.

Reviewed by Keishi Yoshikawa, Attorney at Law and Patent Attorney (Dai-Ichi Tokyo Bar Association)

Last updated: September 27, 2026

What to check first

The following are examples of matters a company may wish to check first. Organizing the information available can also make it easier to consider the issues during a consultation.

Products or services and transaction counterparties—The company checks the products or services concerned, the sales methods, and whether the transaction counterparties are general consumers or businesses.
Campaign stage and decision deadline—The company checks whether the campaign is at the stage before publication, during publication, or after completion, and when a decision is needed.
The complete set of representations concerned—The company reviews all the representations to be used, including websites, social media posts, videos, product containers and packaging, flyers, and in-store signs.
What the advertising is intended to communicate—The company lists the points emphasized in the advertising, such as effects and performance, prices and discounts, rankings and satisfaction, and country of origin.
Supporting materials—The company checks whether materials supporting the claims exist and where they are held, including test results, sales histories, survey results, and manufacturing process records.
Stated conditions and actual practices—The company checks whether the stated conditions for discounts, free offers, subscriptions, and premiums match the actual methods of sale and provision.
External involvement—If advertising agencies, retailers, influencers, or others are involved, the company checks what they were asked to do and who decided the content of the representations.
Concerns raised and deadlines—If concerns or allegations have been raised internally or externally, the company checks who raised them, the representations concerned, the documents received, and the response deadline.

These are all examples of checks for the company to carry out. Consideration of the issues can begin before all of this information is available.

How we can helpIdentifying the applicable rules / Reviewing proposed advertising and campaigns / Reviewing supporting materials / Establishing systems for managing representations / Taking corrective action after a problem is identified / Responding to authorities and consumer organizations

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Contents

1 Identify the rules relevant to the company's advertising and sales promotions
2 Select the matters to check according to the advertising claims
3 Check the promotional methods and the systems for managing representations
4 Respond to concerns and allegations and identify other relevant laws
Key legislation and official sources
Frequently asked questions

1 Identify the rules relevant to the company's advertising and sales promotions

Two areas regulated by the Premiums and Representations Act

Under the Premiums and Representations Act, a business must not make misleading representations in connection with transactions involving the goods or services it supplies. The Act also provides that the maximum individual value, aggregate value, types, methods of provision, and other aspects of premiums may be restricted, or their provision prohibited. Under this provision, separate public notices set limits for premiums offered through prize draws and similar methods, and for premiums offered to general consumers without a prize draw or contest, known as sōzuke premiums.

"Representations" in this context means advertising and other representations made by a business as a means of attracting customers and designated by the Prime Minister. The designation notice lists representations on product containers and packaging, flyers and brochures, posters and signs, advertising in newspapers and magazines or through broadcasting, and advertising and other representations on the internet and similar media.

Representation rules: characteristics, transaction terms, and designated representations

The representation rules cover three categories: representations presenting the quality, specifications, or other characteristics of goods or services as significantly superior to the actual goods or services or other relevant comparators (misleading representations as to quality); representations likely to lead general consumers to believe that prices or other transaction terms are significantly more favorable than the actual terms or other relevant comparators (misleading representations as to transaction terms); and representations designated by the Prime Minister. Designated representations include those that general consumers find difficult to identify as a business's representations, commonly called stealth marketing, and misleading representations concerning the country of origin of goods.

Transaction counterparties and the scope of the rules

The representation rules concern misleading impressions given to general consumers. For premium regulation, the Consumer Affairs Agency (CAA) states in its Q&A on premiums that prize draws and similar competitions are subject to regulation even when the recipients are businesses (CAA Q&A, Q56). By contrast, the same Q&A states that premiums offered without a prize draw or contest are regulated as sōzuke premiums when offered to general consumers, while, as a general rule, the rules do not apply to such offers to businesses (CAA Q&A, Q56).

The CAA states in its Q&A on the management measures guidelines that a business supplying components or similar items to the manufacturer of a product supplied to general consumers is also required to take the management measures required under the Act, as a business making representations to general consumers, in circumstances such as where its representations are also seen by general consumers and may directly mislead them (CAA Q&A, Q3). The company checks the uses of the goods, the audience reached by the representations, and the sales methods, rather than relying solely on their classification as intended for businesses.

Checking country-of-origin representations

The CAA's Q&A on representations states that the Premiums and Representations Act does not impose an obligation to indicate a product's country of origin in every case (CAA Q&A, Q32). However, the public notice on country-of-origin representations designates as misleading representations those that make it difficult for general consumers to identify where goods were produced, such as the use of foreign country names, flags, or writing on goods produced in Japan.

Under the notice, the "country of origin" is the country where an operation bringing about a substantial change in the characteristics of the goods took place. Detailed implementing rules specify particular processes for goods such as clothing. The implementing guidelines state that attaching labels, placing goods in containers or packaging them, merely putting goods into assortments or combinations, and simple assembly of parts do not constitute operations bringing about a substantial change. For goods for which the detailed implementing rules do not specify a process, the company organizes information on the processes carried out in each country and how the goods changed before and after processing. For food, the Food Labeling Standards prescribe origin-related labeling information, including the place of origin of ingredients, which needs to be checked separately from the Premiums and Representations Act.

2 Select the matters to check according to the advertising claims

Making claims about prices, discounts, free offers, or limited periods

For claims such as "half the regular price," "first time free," or "this month only," the issues include the basis for the comparison price, the applicable conditions, the campaign period, and how these correspond to the actual transactions. The approach to using past selling prices as a basis for comparison and related matters is explained in "Reviewing claims about prices, discounts, free offers, and limited periods."

Considering the relationship between prominent claims and disclaimers

Where a prominent claim is accompanied by a note stating conditions or exceptions (a disclaimer), the CAA's materials on disclaimers state that the issues include whether general consumers can notice the disclaimer given its text size, placement, and other features, and whether they can understand its content. The approach to prominent claims and disclaimers is explained in "Assessing advertising content: prominent claims and disclaimers."

Making claims about effects or performance

For representations concerning effects or performance, the CAA or a prefectural governor may require a business to submit, within a specified period, materials demonstrating reasonable grounds supporting the representations. If the materials are not submitted, the representations are deemed to be misleading representations as to quality for the purposes of an order to take measures. What materials may constitute reasonable grounds and how to prepare for a submission request are explained in "Supporting materials for claims about effects and performance, and rules on unsubstantiated advertising."

Making No. 1, comparative, or satisfaction claims

The CAA's Q&A on representations states that claims such as "No. 1 in sales" or "ranked first for low prices" raise issues as misleading representations when they lack reasonable grounds and are inconsistent with the facts (CAA Q&A, Q27). Checking survey subjects and methods and the scope of comparisons is discussed in "Reviewing No. 1 claims, comparative advertising, and satisfaction claims."

3 Check the promotional methods and the systems for managing representations

Using influencers or reviews

Since October 1, 2023, representations that are a business's own but are difficult for general consumers to identify as such have been designated as misleading representations under the Premiums and Representations Act (Cabinet Office Public Notice No. 19 of 2023). The implementing guidelines for that notice state that even a post appearing to be from a third party constitutes a business's representation if the business is found to have been involved in deciding its content. How to commission posts and how to present the relevant information are explained in "Stealth marketing rules and handling influencer and review advertising."

Offering premiums or running prize draws, contests, or campaigns

Goods, money, or other economic benefits offered in connection with a transaction may constitute premiums. The way the limits are set differs between prize draws and contests, in which recipients or premium values are determined by chance, such as a draw, or by relative performance, and sōzuke premiums offered by other methods. The CAA's Q&A on premiums also states that circumstances such as the actual number of winners falling below the advertised number may constitute misleading representations as to transaction terms, so, in addition to the value limits, the representations concerning the premiums and entry conditions also need to be checked (CAA Q&A, Q87). Classification of a campaign and the approach to applicable limits are explained in "Reviewing premiums, prize draws and contests, and promotional campaigns."

Establishing internal review procedures and oversight of external providers

The Premiums and Representations Act requires a business to establish the necessary systems and take other necessary measures to manage premium offers and representations properly. The Prime Minister has issued guidelines on the measures to be taken, and the measures needed differ according to the size, business model, and other circumstances of the business. Review procedures and oversight of external providers, such as advertising agencies and affiliate marketers, are explained in "Advertising review procedures, representation management systems, and oversight of external providers."

4 Respond to concerns and allegations and identify other relevant laws

When a problem is discovered internally

If a company discovers internally that its representations do not match the actual goods or transactions, the company checks the representations concerned, the extent of their publication, the nature of the discrepancy, and whether to continue using the representations, and begins considering corrective action.

The CAA's Q&A on representations states that, in determining whether representations are misleading, intent or negligence on the part of the business involved in deciding their content is not required (CAA Q&A, Q2). For surcharges, however, the Premiums and Representations Act provides that payment may not be ordered if the business is found not to have known that the representations were misleading and not to have failed to exercise reasonable care in not knowing. The business's knowledge and the degree of care it exercised are therefore relevant.

When contacted by the CAA, prefectural authorities, or a consumer organization

Response deadlines and legal effects differ according to who has made contact and the basis for the contact—for example, requests for reports or submission of materials from the CAA or prefectural authorities, or requests for disclosure of materials or claims for injunctive relief from qualified consumer organizations. Voluntary correction, regulatory investigations, commitment procedures, surcharges, and responses to qualified consumer organizations are explained in "Alleged violations of the Premiums and Representations Act, voluntary correction, and regulatory responses."

When other laws also apply

Advertising for pharmaceuticals, cosmetics, and similar products, and advertising by medical institutions, are also subject to the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (the "PMD Act") and the Medical Care Act, in addition to the Premiums and Representations Act. These rules are explained in "Responding to the PMD Act and medical advertising rules." For mail-order sales, the Act on Specified Commercial Transactions prescribes information to be displayed in advertising and on order screens, which needs to be checked separately from the Premiums and Representations Act. In some industries, fair competition codes approved under the Premiums and Representations Act have been established and are referred to as standards for representations and premium offers.

Key legislation and official sources

English translations of legislation are provided for reference. The Japanese texts are authoritative.

Article topic	Legislation or official source	Source type and English version reviewed
Representation and premium regulation, management measures, regulatory measures, surcharges, and qualified consumer organizations	Act against Unjustifiable Premiums and Misleading Representations— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 29 of 2023.
Media covered by "representations" and the designation of premiums	Designation of premiums and representations	Public notice (Japanese). English title translated by the firm.
Premiums offered through prize draws and contests	Restrictions on premiums offered through prize draws and contests	Public notice (Japanese). English title translated by the firm.
Premiums offered to general consumers without prize draws or contests	Restrictions on premiums offered to general consumers	Public notice (Japanese). English title translated by the firm.
Premium offers to businesses; campaign representations and the number of winners	CAA Q&A on premiums: Q56; Q87	Official guidance (Japanese). English title translated by the firm.
Responsibility for representations, intent and negligence, No. 1 claims, and country of origin	CAA Q&A on representations	Official guidance (Japanese). English title translated by the firm.
Management measures for component suppliers whose representations reach consumers	CAA Q&A on the management measures guidelines	Official guidance (Japanese). English title translated by the firm.
Country-of-origin representations	Misleading representations concerning the country of origin of goods; implementing guidelines; detailed implementing rules	Public notice and official guidance (Japanese). English titles translated by the firm.
Origin-related food labeling	Food Labeling Standards	Cabinet Office Order (Japanese). No English translation reviewed.
Comparison prices	Guidelines on misleading price representations	Official guidance (Japanese). English title translated by the firm.
Visibility and comprehensibility of disclaimers	Points to note on the presentation and content of disclaimers	CAA report (Japanese). English title translated by the firm.
Supporting materials for effects and performance claims	Guidelines on unsubstantiated advertising	Official guidance (Japanese). English title translated by the firm.
Stealth marketing	Public notice (Cabinet Office Public Notice No. 19 of 2023); implementing guidelines	Public notice and official guidance (Japanese). English titles translated by the firm.
Internal management systems	Management measures guidelines	Official guidance (Japanese). English title translated by the firm.
Commitment procedures	Implementing guidelines on commitment procedures	Official guidance (Japanese). English title translated by the firm.
Advertising of pharmaceuticals and related products	Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 50 of 2015.
Advertising by medical institutions	Medical Care Act— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 79 of 2018.
Information displayed in mail-order advertising and on order screens	Act on Specified Commercial Transactions— Japanese text on e-Gov	Legislation. English translation (earlier version). The translation identifies its last version as Act No. 72 of 2021.
Fair competition codes	CAA information on fair competition codes	Official information (Japanese). English title translated by the firm.

Legal information reviewed: September 27, 2026

Frequently asked questions

Are goods and services intended for businesses outside the scope of the Premiums and Representations Act?

Because the representation rules concern misleading impressions given to general consumers, they would ordinarily not apply to representations relating to transactions exclusively with businesses. However, prize draws and similar competitions are subject to regulation even when the recipients are businesses. In addition, the CAA's Q&A on the management measures guidelines states that, for example, a business supplying components for products intended for general consumers is also required to take the management measures required under the Act, as a business making representations to general consumers, in circumstances such as where its representations are also seen by general consumers and may directly mislead them (CAA Q&A, Q3).

Are representations other than online advertising also covered?

Yes. The designation notice lists representations on product containers and packaging, flyers and brochures, oral advertising, posters and signs, advertising in newspapers and magazines or through broadcasting, and advertising and other representations on the internet and similar media.

Advertising production is handled by an agency. Is the agency the party subject to regulation?

The CAA's Q&A on representations states that the representation rules under the Premiums and Representations Act cover representations made by businesses supplying goods or services, and that a business involved in deciding the content of misleading representations is subject to regulation (CAA Q&A, Q2 and Q3). Outsourcing advertising production does not, by itself, remove the advertiser from the scope of the rules.

The wording was an error, and there was no intention to mislead. Could it still be an issue?

Intent or negligence on the part of the business involved in deciding the content is not required for representations to be misleading. By contrast, a surcharge may not be ordered if the business is found not to have known that the representations were misleading and not to have failed to exercise reasonable care in not knowing, and criminal penalties become an issue where there is intent. The requirements therefore differ between procedures.

Does staying within the premium value limits mean there are no issues with a campaign?

The CAA's Q&A on premiums explains that, separately from the value limits, representations concerning premiums, the number of winners, or entry conditions may constitute misleading representations as to transaction terms if they differ from reality (CAA Q&A, Q87). One option is to review the campaign under both the premium rules and the representation rules at the planning stage.

Must a company indicate the country of origin for every product?

The Premiums and Representations Act does not impose an obligation to indicate a product's country of origin in every case. However, representations that make the country of origin difficult to identify are designated as misleading by public notice, and other legislation, such as the Food Labeling Standards, may prescribe origin-related labeling requirements.

Contact

Making an inquiry

Please let us know, as far as you are able, the advertising and campaign materials and the current status—whether the materials are yet to be published, are currently published, or have been the subject of concerns raised.