China Tech Bulletin HIGHLIGHTS China approves foreign owned e-commerce companies in Shanghai FTZ Foreign companies can now establish 100%-owned subsidiaries in the Shanghai Free Trade Zone to engage in commercial e-commerce business and secure a value-added telecommunications service operating permit. Previously, only joint ventures and domestic Chinese entities could establish such companies within the Shanghai FTZ. Read our client alert here. Spotlight on closer monitoring of social media websites and notice and take down policies for ISPs in China Defamed individuals or companies, or those whose privacy rights have been breached, may rely on procedural rules set out in a new judicial interpretation from the Supreme People’s Court, taking effect from 10 October 2014. Notably, the Provisions on Several Issues Concerning the Application of the Law in the Trial of Civil Dispute Cases Involving the Utilisation of Information Networks to Infringe Personal Rights and Interests (Provisions) set out that a victim may sue an ISP to release the genuine identity of online infringers, that the place of infringement is the location where the victim resides (allowing for claims to be filed more easily) and that victims may be entitled to statutory damages. ISPs may also rely on safe harbour defences. ISPs should expand their notice and take May 2015 Recent legal developments shaping the tech industry in China In This Issue China approves foreign owned e-commerce companies in Shanghai FTZ Spotlight on closer monitoring of social media websites and notice and take down policies for ISPs in China Regulations change the way social media accounts are registered in China China moving closer to a personal information protection law Online businesses in China to comply with new consumer protection measures Encouragement given to development of a “healthy” content delivery platform for online literature Hong Kong Privacy Authority issues a Best Practice Guide for Mobile App Development Hong Kong 14th Floor, Hutchison House 10 Harcourt Road Central, Hong Kong Tel: +852 2846 1888 Fax: +852 2845 0476 Beijing Suite 3401, China World Office 2 China World Trade Centre 1 Jianguomenwai Dajie Beijing 100004, PRC Tel: +86 10 6535 3800 Fax: +86 10 6505 2309 Shanghai Unit 1601, Jin Mao Tower 88 Century Avenue, Pudong Shanghai 200121, PRC Tel: +86 21 6105 8558 Fax: +86 21 5047 0020 Introduction As China wades into global e-commerce and increasingly opens its doors to the world, there is a growing need to step up regulation of users and business operators. Providing support and guidance to industry has also become important. In this China Tech Bulletin we review some recent legal developments which matter most to your industry. 2 China Tech Bulletin | May 2015 down policies to take advantage of such a defence. All other businesses operating online platforms should step up their monitoring efforts in China and take necessary action against negative or defamatory information published on their sites. Regulations change the way social media accounts are registered in China New regulations require users to use their real name when applying for certain social media accounts in China. Blogs, microblogs, instantmessaging services, online discussion forums, news comment sections and related services are all affected. Providers of such services must implement verification measures, including verification of the account name, photos and other identification information submitted by Internet users before they are registered. Nine categories of usernames have been banned outright, including anything that harms national security or national secrets, incites ethnic discrimination or hatred or harms national unity. Names that promote pornography, gambling, violence, terror, superstition and rumours are also outlawed in the regulations. China moving closer to a personal information protection law In a recent interview published in online newspaper Xinhuanet, a key government official has announced China plans to accelerate the development of a personal data protection law. Deputy Secretary of the China Internet Network Information Office Yang Chunyan commented on the Government’s intention to implement regulatory as well as technological measures to protect personal information. Currently, there are only three ways a person can protect their personal information: through a decision in the National People’s Congress, by filing a complaint to the Illegal Information Reporting Centre and through certain related consumer protection laws. Chunyan indicated the new measures would enhance the enforcement of illegal collection, disclosure and sale of personal information in the region, but did not provide any further detail. The announcement is consistent with Government recent efforts in policing privacy: in February 2013 the Government issued the voluntary Guidelines for Personal Information Protection within Information Systems for Public and Commercial Services. The announcement also came at the same time as the Chinese Government issued new consumer protection measures (discussed below) which for the first time define “personal information”. May 2015 | China Tech Bulletin 3 Online businesses in China to comply with new consumer protection measures Businesses providing goods and services on the Internet, via television, over telephone or by mail order must abide by new consumer measures which took effect in March 2015. The Measures for the Punishment of Conduct Infringing the Rights and Interests of Consumers provide such business operators are prohibited from selling products which do not meet certain standards. Among the measures is a requirement for such business operators to accept a return of goods without cause pursuant to the relevant law without delay. Failure to respond to a return request without a justified reason within 15 days will be deemed an intention delay or refusal according to the new measures. Encouragement given to development of a “healthy” content delivery platform for online literature Principles and a plan to develop the online publication industry in an orderly, “healthy” fashion have recently been issued in an opinion by a state administrator in the press, publication, radio, film and television industry. One of the objectives encourages the establishment of a content delivery platform for literature which would weed out low quality content and plagiarised copies. The opinion also sets out strategies for online literature enterprises to engage with e-commerce, logistics and telecommunications providers to enable the plan to come into fruition. Note: foreign companies are generally prohibited from carrying out an online publication business. Hong Kong Privacy Authority issues a Best Practice Guide for Mobile App Development A “Best Practice” guide for mobile app developers was issued late last year by the HK Privacy Commissioner. Tailored for small-to-medium enterprises, it provides an easy-to-understand overview of the legal requirements of the local laws and “Privacy by Design” approach in developing products and services. Adopting a comprehensive checklist, it draws the attention of the app developers all the factors that need to be considered in building a privacy-friendly app. 4 China Tech Bulletin | May 2015 www.bakermckenzie.com To find out more about how our Information Technology & Communications Group can add value to your business, please contact: Anna Gamvros +852 2846 2137 firstname.lastname@example.org Nancy Leigh +852 2846 1787 email@example.com Howard Wu +86 21 6105 8538 firstname.lastname@example.org Zhenyu Ruan +86 21 6105 8577 email@example.com Recently Published China and Hong Kong Alerts Here are recent client alerts and newsletters published by Baker & McKenzie in Hong Kong and China relevant to the tech industry. • New Guidance on Cross Border Data Transfer: What does it mean? January 2015 • Privacy Matters January 2015 • Foreign Companies Allowed to Set Up Wholly-owned Commercial E-commerce Operations in the Shanghai Free Trade Zone Jan 2015 This bulletin has been prepared for clients and professional associates of Baker & McKenzie. Whilst every effort has been made to ensure accuracy, this client alert is not an exhaustive treatment of the area of law discussed and no responsibility for any loss occasioned to any person acting or refraining from action as a result of material in this bulletin is accepted by Baker & McKenzie. If advice concerning individual problems or other expert assistance is required, the services of a competent professional adviser should be sought. Unsubscribe To unsubscribe from our mailing list or to change your communication preferences, please contact firstname.lastname@example.org. ©2015 Baker & McKenzie. All rights reserved. Baker & McKenzie International is a Swiss Verein with member law firms around the world. 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