China proposes social credit blacklist to combat data mishandling in its logistics sector

China is looking to crack down on its logistics sector, with plans to add companies that mishandle personal data to a social credit blacklist, according to a document published by the country’s top national planning agency on Thursday.

Why it matters: China’s logistics sector is driven by the world’s largest e-commerce market. Given the volume of personal information needed to collect and deliver goods, there is room for mishandling and leaking private information.

• Creating a blacklist for the logistics sector is part of a broader initiative to deploy punishments across governmental departments to enforce existing laws.
• The move is the latest in a series of measures to control rampant data issues that plague consumers in the country.

Details: The draft document released by the National Development and Reform Commission (NDRC) is open for comment until August 14, the government body said in a statement.

• Companies could be blacklisted for illegally collecting, disclosing, or distorting personal information, as well as providing data to others without consent.
• Details of blacklisted individuals and companies will be published on the Credit China website, a website for social credit and blacklist information.

Context: China has laid out plans to create an oft-discussed social credit system, the backbone of which is expected to be completed by 2020.

• The Chinese government is attempting to address issues of data mishandling in the country. Regulators have set up a cross-ministry task force to investigate apps that over-collect data. Numerous tech firms have so far been targeted, including Alibaba’s food delivery arm Ele.me, social e-commerce platform Xiaohongshu, and voice recognition firm iFlytek.
• The initiative has found that popular financial services apps had not sufficiently protected user data.
• China is using social credit as a mechanism to enforce laws,  creating cross-departmental punishments, a system in which a company or individual is penalized by multiple government entities if it is blacklisted by one.
• The Chinese government hopes to gain insights into how people in the country behave and how to control them by aggregating records throughout its ministries and departments.