SAIC enhances consumer protection in Internet

The State Administration for Industry and Commerce ("SAIC") issued the Opinions on Enhancing the Protection of Consumers' Rights and Interests in the Internet Sector (“Opinions”) on 19 October 2016. Within the three years after the issuance of the Opinions, the SAIC will emphasise the enforcement against activities infringing customer rights that occur in e-commerce or other Internet related business. 

The specific measures provided in the Opinions include but are not limited to (i) conduct sampling inspections and control the product quality of the goods traded online; (ii) enforce against false online advertisements and other cyber frauds; (iii) implement requirements on after-sale services; and (iv) establish transparent and efficient systems for handling customer complaints. In particular to cross-border e-commerce transactions, the Opinions also suggest setting up cross-border online mechanisms to resolve customer complaints and disputes.

Please click here for the full text (Chinese only) of the Opinions.

Negative List on Internet Market Access seeks comments

The National Development and Reform Commission published the Negative List on Internet Market Access (1st Batch; Trial Version) (“Internet Negative List”) on 20 October to seek public comment. This Internet Negative List is part of the government’s efforts to implement the national “Internet Plus” initiatives. It specifies the market access requirements for operating Internet related business within the territory of China.

The Internet Negative List covers six business categories that are prohibited for any operators to enter into, and 30 business categories that have restrictive requirements for market access. All of the requirements contained in the Internet Negative List are from the current applicable PRC laws, including those newly published ones concerning the operation of internet finance services and internet car hailing services.

The Internet Negative List applies to both domestic and foreign business operators. In particular to foreign operators, they need to satisfy all the requirements provided in this Internet Negative List as well as those provided in the FDI policies (e.g. the Catalogue for the Guidance of Foreign Investment Industries).

Please click here for the full text (Chinese only) of the Internet Negative List.

Joint initiative is taken to fight against credit manipulation

Right before the “11 November 2016/Singles Day”, which is expected to set an even bigger one-day online sales record than that of 2015 (i.e. around £9.4bn), the National Development and Reform Commission (“NDRC”) hosted a press conference on 25 October together with several other government departments including the People’s Bank of China, the Ministry of Commerce, and the General Administration of Quality Supervision, Inspection, and Quarantine.

The NDRC announced at the press conference that a joint initiative to fight against fraud online reviews and credit manipulation has been agreed among several responsible government departments. In addition, 11 giant Internet companies in China, including Alibaba, JD, Baidu, Tencent, DiDi, and S.F. Express, have entered into an information sharing agreement for the same purpose. Through such an agreement, the Internet companies promise to monitor the online reviews and credit manipulating activities on the platforms, to take measures such as deleting reviews or closing user accounts, and also to share data with the government to establish a “dishonest/bad credit list” system.

This joint anti-fraud and anti-credit-manipulating initiative is an important effort by the government in establishing the national social credit system.

Draft regulation provides protection for minors in cyberspace

The Cyberspace Administration of China published the Draft Regulations on Minor Protections in Cyberspace (“Draft”), and invites the public to submit opinions or comments by 31 October.

In accordance with the Draft, before distributing in cyberspace any information concerning violence, obscenity, horror, depression, or any other contents inappropriate for minors, an operator must provide obvious alerting signs or marks. An importer of any smart terminal devices must install minor protection software in the devices or provide methods or channels to install such software, before any imported device can be sold to users. In order to collect the personal information of a minor, an operator must make clear specifications about the collection and use, and obtain consents from not only the minor but also his/her guardians.

All these requirements can have impact on the business operation in cyberspace, and thus are worth noting for both domestic and foreign investors.

Please click here for the full text (Chinese only) of the Draft.

New regulation on car hailing business 

The Interim Measures for the Administration of Online Car Hailing Operations and Services ("Hailing Measures") and the Administrative Provisions on Cruising Taxi Operations and Services will both take effect from 1 November, which will regulate the operation of new car hailing services and traditional taxi services respectively.

Recognising that the Internet has revolutionised the traditional taxi model, the government adopts different regulatory approaches in the Hailing Measures toward the operation of online car hailing business, in order to meet the needs of, and safeguard the travelling public. Local governments are left with large discretion to formulate detailed implementation rules (e.g. setting out requirements for drivers and vehicles).

Please click here to read a Law-Now article on more information about the Hailing Measures and the relevant local rules.