China’s market regulator introduced on Monday a set of e-commerce laws pertaining to more recent developments in the sector, including livestreamed sales, user data privacy, and forced exclusivity.
Why it matters: The new rules addressing newer innovations in China’s massive e-commerce industry are an important complement to the E-commerce Law that came to effect in 2019.
Details: The State Administration for Market Regulation, China’s market regulator, unfurled (in Chinese) rules regulating transactions made online at the annual 315 consumer rights protection gala held Monday.
- The rules require platforms which sell via social e-commerce and livestream e-commerce as well as merchants on these platforms to comply with the responsibilities of online transaction marketplaces as described in the law. Selling via livestreams and social media are innovations that have gained popularity since the release of the e-commerce law in 2019.
- Livestream e-commerce platforms are required keep the videos for at least three years after the end date of the live video session.
- The platforms have to gain user consent for the collection and utilization of personal information including biometric data, medical and health information, and financial accounts.
- The new rules will also ban services that engage in misleading practices such as falsifying selling volume and audience numbers, or promoting favorable reviews over others.
- The guidelines also prohibit practices that facilitate “forced exclusivity,” including suppressing product listing rankings of merchants who decline to sell exclusively on one platform, removing or blocking such online stores, and raising service fees for such sellers.
- The measures are important for “improving the online transaction supervision system, regulating the online transaction space, maintaining fair competition, and creating secure online consumption,” a report from state-backed news agency Xinhua cited the regulator as saying.
Context: China has stepped up regulation of the flourishing e-commerce industry over the past few years.
- China’s Electronic Commerce Law came into effect in 2019.
- In June, the China Advertising Association (CAA) issued rules banning false and misleading advertising on livestreams and requiring real-name registration from both merchants and individual livestreamers.