The draft law on e-commerce, submitted at a six-day bimonthly session of the Standing Committee of the National People's Congress, categorizes e-commerce operators into three groups: those conducting business on their own websites, e-commerce platform operators, and stores on e-commerce platforms.
The draft was first read by the top legislature in December 2016. The latest version, submitted for the second reading, further clarifies the liabilities of e-commerce operators and punishments for infringing intellectual property and consumer rights.
According to the draft, e-commerce platform operators should be registered with the industry and commerce administrations, except for those that sell homegrown farm produce or handmade products, and others who by law do not need to be registered.
The operators are required to cancel, block, disconnect or close transactions with business operators who violate IP rights when they are aware of, or should be aware of, the offences. Those who do not take necessary action will bear joint liabilities.
They should not infringe consumers' rights by posting false advertisements, fabricating transaction information or user comments. They should deliver products and services as promised and bear the risk and liabilities of transportation.
Consumers should be informed of how to cancel their accounts without unreasonable conditions.
When e-commerce platform operators offer search services for consumers, they may display the results according to indicators such as price, sales volume and credit but the results of paid listings should be clearly labeled as advertisements.
The bill also pays great attention to dispute settlement. It requires e-commerce operators to establish convenient and efficient channels to handle complaints. During disputes with consumers, they shall provide original transaction information to the court, arbitration authority or other mediation agencies. They will be punished for faking, destroying, tampering with or refusing to hand in such information.
China has the world's largest e-commerce market, with online retail sales reaching nearly 5.2 trillion yuan (US$755.3 billion) in 2016, ayear-on-year increase of 26.2%.