Recently, China's network transactions have been in full swing, and new forms of business such as “social e-commerce", "live-stream sales" have kept emerging, which breath new life into the internet economy and contributes to the steady economic growth, increasing consumption, and expanding employment. However, new problems have appeared at the same time, and the community calls for the improvement of the corresponding regulatory rules. On March 15, the State Administration for Market Regulation (SAMR) took the lead and promulgated Measures for the Supervision and Administration of Network Transactions (hereinafter referred to as Measures) in response to concerns from the society. Measures is an important part of the implementation of the E-Commerce Law of the People's Republic of China as a department regulation. It gives improvement and detailed clarification of relevant laws and regulations, formulates a series of specific systems and regulations to guide internet transactions, delegate responsibilities to platforms and guarantee the rights and interests of consumers. Therefore, it is of great practical significance in improving the regulatory system of internet trading, purifying the environment for network transactions, maintaining a fair competition of online trade, and creating a safe and sound environment for online consumption.

There are 5 chapters with 56 articles in Measures, including the content of general provisions, internet trading operators, regulation and administration, legal liability and supplemental provision. Measures makes clear that the regulation of internet transactions should adhere to the principle of encouraging innovation, being tolerant and prudent, strictly observing the bottom line, and integrating online and offline regulation, puts forwards that we should establish and improve the governance system of the internet transaction market with multiple participation, effective coordination and orderly regulation, and stipulates clearly the key issues such as the registration of internet operators, the responsibility of platform operators, the protection of consumer rights and interests, and the protection of personal information.

In terms of the registration of internet operators, Measures gives specific definitions of public convenience services and occasional and low-value transactions, which can be exempted from the registration. That is, individuals legally engaged in public convenience services, including cleaning, washing, sewing, haircut, moving, keys copy, pipeline dredging, repair of furniture and household appliances without permission, or individuals with cumulative annual turnover no more than 10 thousands yuan billion are exempted from the registration legally.

For the regulation of new forms of business, Measures makes clear provisions for operators engaged in online trade activities such as “social e-commerce" and "live-stream sales". If a provider of network service (such as social networking and live streaming), provides the operator with network business premises, commodity browsing, order generation, online payment and other network trading platform services at the same time, it shall fulfill the obligations as the operator of the internet trading platform according to law. Operators who carry out internet trading activities through the network trading platform services mentioned above shall also fulfill the obligations illustrated in the law.

To delegate the responsibility of platforms, Measures outlines that platforms shall submit the identity information of the operators within the platform to provincial market regulation departments of the domicile every six months. Platforms shall establish an inspection and monitoring system for the operation within the platform, and promptly deal with and report on illegal acts. In addition, platforms shall not interfere with the operation of the operators within the platform, and shall not prohibit or restrict the operators’ rights on choice of operating on multiple platforms, choice of express logistics and other transactions to support service providers.

For the protection of consumers' rights and interests, Measures requires that operators should not obtain consumer's content on product bundling by using a default setting and should not set the option chosen by the consumer in previous transactions as the consumer's default choice. Operators who require automatic extension and automatic renewal service shall remind the consumers of their choice on the extension and renewal in an explicit way before the consumer accept the service and five days before extension and renewal.

In terms of the protection of personal information, Measures stipulates that the operators of internet transactions should illustrate explicitly the purpose, the method and the scope when they collect and use the information of consumers and they should get consent of the consumers. It is prohibitive to force the consumers to agree with their collection and use of information without direct relevance to the operation. The operators shall obtain consumers’ consent in every item before collecting and using personal sensitive information, and shall not provide the information to any third party, including related parties.

Measures also stipulates in explicit terms on new forms of unfair competition including fictitious transactions, misleading display and evaluation and fictitious traffic data, and prohibits all kinds of online consumption infringement.

The issuance and implementation of the Measures will help guide and urge operators of internet trading operate in accordance with the law, standardize the network transactions, protect the legitimate rights and interests of network consumers, and promote the sustained and sound development of China's digital economy. The Measures shall enter into force as of 1 May 2021, and the original Measures for the Administration of Network Transactions shall be repealed at the same time.

Source: SAMR

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