China adopts e-commerce law to improve market regulation

2018-09-01
Xinhua

BEIJING — China’s top legislators passed an e-commerce law aimed at improving regulation of the flourishing market on Aug 31.

It was adopted after a fourth reading at the bimonthly session of the Standing Committee of the National People’s Congress (NPC) that ended on Aug 31.

The law, which is set to “protect legal rights and interests of all parties” and “maintain the market order,” requires all e-commerce operators to fulfill their obligations to protect consumers’ rights and interests as well as personal information, intellectual property rights (IPR), cyberspace security and the environment.

“The law specifies regulations concerning operators, contracts, disputes settlement and liabilities involved in e-commerce as well as the market development,” Yin Zhongqing, a lawmaker, said at a press conference held by the General Office of the NPC Standing Committee on Aug 31.

The law, which clarifies e-commerce operators into e-commerce platform operators, merchants on e-commerce platforms, and those doing business on their own websites or via other web services, covers not only famous platforms such as Alibaba’s Taobao but also those selling goods via social networks including the popular chatting app WeChat.

The law puts more emphasis on the obligations and responsibilities held by platform operators, the most advantaged players in the country’s e-commerce market, and strengthens protection for the relatively disadvantaged consumers, according to Yin.

According to the law, which paid great attention to consumer’s privacy, options and rights to know, operators must follow related laws and regulations when collecting and using consumers’ personal information. Operators should clearly point out tie-in sales to consumers and cannot assume consent.

The law also bans e-commerce operators with dominant market positions from excluding or restricting competition. Platform operators who unreasonably restrict transactions on their platforms may face a penalty of 500,000 yuan ($73,260), or up to 2 million yuan in serious cases.

A penalty of the same range may also be applied to platform operators if they fail to take necessary steps against IPR infringement by merchants on their platforms that they are aware of or should be aware of.

“The law prioritizes supporting and promoting the sustainable and sound development of e-commerce, which is an emerging industry,” Yin said.

The country promotes cross-border e-commerce, and supports the participation of small and micro businesses, said the law, which stated that operators engaging in cross-border e-commerce should abide by laws and administrative regulations regarding import and export.

China’s cross-border e-commerce trade saw its turnover rise 80.6 percent from 2016 to 90.24 billion yuan last year. While official data shows a sharp rise in complaints lodged related to cross-border e-commerce. Milk, milk powder and other foods, diapers, health care products and cosmetics are the goods involved in the most complaints.

The law also said the State Council, local governments at or above county-level as well as related departments should take measures to support and promote environmentally friendly packaging, storage, and transportation in e-commerce, adding that delivery service providers should use eco-packaging.

The draft e-commerce law was first reviewed in December 2016 then later deliberated in October 2017 and June 2018 by the NPC Standing Committee.

The law will take effect on Jan 1, 2019.