China recently implemented a new e-commerce law from January 1, 2019. It was first reviewed in December 2016 and deliberated upon by the NPC in October 2017 and June 2018.
Key regulations include:
Regulating unfair competition: Article 22 of the new legislation highlights fair competition obligations for all e-commerce operators, with special emphasis on those with dominant market positions.
Shared liability for platforms: E-commerce platforms will now be jointly responsible for the sale of fake goods on their site. Under the new law, platform operators must respond in a timely manner to reports of violations or face penalties of up to US$30 million.
Consumer rights reinforced in e-commerce domain: Consumers will now have stronger legal protections under the new e-commerce law. Merchants must clearly disclose any clauses or bundles they have placed on sales and cannot assume consent from the consumer.
Protect consumers against fake reviews: the ban of fake reviews includes not only those reviews written by hired agents, but also positive reviews written by customers in exchange for monetary rewards.
Taxation and Business Registration: requires e-commerce operators to register as market entities, with certain exceptions, such as individuals who sell their own agricultural products or handcrafts or who carry out sporadic and small transactions. (E-commerce Law art. 10.)
Protection of Personal Data: The Law requires e-commerce operators to clearly specify to users the procedures for inquiring about, correcting, and erasing user information, and for cancelling users’ accounts.
Regulating Logistics Service: logistics suppliers cannot delay delivery for the reason of “slow logistics” or “stock shortage”.
Strengthing IP protection: E-commerce platforms cannot collect customer data contrary to law.
Highlighting customs, taxation and foreign exchange issues for cross-border e-commerce.
Regulating non-bank payment institutions: payment institutions are required to set up internal control and monitoring systems to effectively verify client identities, properly store client data and transaction records, and take responsible for client payment loss.