False propaganda lies in the use of "information asymmetry". Effective regulation of false propaganda not only needs to eliminate any possibility of the occurrence of prior information asymmetry from the source, but also needs to take effective legal means to deal with the moral hazard caused by subsequent information asymmetry. In this review, we sorted out the research results of the externality problem of false publicity and the existing legislation of relevant problems, and analyzed the causes of the externality of false publicity. The ways to solve the externality problem were explored, and the existing problems in China's current legislation were pointed out, with suggestions for improvement put forward. Using the theory of information economics and public economics, we analyzed the logical relations between false publicity of health food and information asymmetry, and between information asymmetry and externality, which proved that the externality of false publicity was actually caused by information asymmetry. The current problems in Chinese system in regulating and solving the externalities of false publicity were pointed out, economic law and civil law and administrative law were suggested to be applied as the adjustment methods of economic law, and to solve the externalities caused by information asymmetry.