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on Sunday, 30 September 2018
in Business in China

Eight Highlights of the New E-commerce Law

On 31st August 2018, the fifth meeting of the Standing Committee of the 13th National People's Congress was held in Beijing. The meeting passed the "Electronic Commerce Law", which will be implemented from 1st January 2019. This will be the first comprehensive law in the field of e-commerce in China that will regulate e-commerce behavior and guarantee the legitimate rights and interests of the main parties involved.

What follows is a summary of the key points:

1.  Micro-businesses, live sales etc. are all included in the e-commerce law

With the rapid development of e-commerce, ways of shopping in China have undergone drastic changes. Sales are found not only on e-commerce platforms such as Taobao and Jingdong, but through friends and live broadcasts. The "E-commerce Law" clarifies that platforms such as Weishang are included within the scope of the law, thus being bound by its regulations.

2.  User data security is guaranteed

The new law follows the China Cybersecurity Law and also adopts some of the European Union’s General Data Protection Regulation’s (GDPR), as an e-commerce platform should obtain consent for acquiring private data and information and should clearly state the purpose of this data it collects. Where this is not adhered to the fine could be as high as 1 million RMB.

3.  Taobao individuals will need to be registered

At present, individuals do not require industrial and commercial registration. Once this law comes into effect e-commerce operators should handle the registration of market entities in accordance with the law.

4.  “Click farming” will be banned

Sellers will be banned from inducing consumers to leave favorable comments on items or hire workers to click on advertising links to increase revenue. The "E-Commerce Law" clearly states that e-commerce operators must not use fictitious transactions or fabricated user evaluations to deceive or mislead consumers.

5.  Online combined sales of goods must not be a default

The "E-Commerce Law" clearly states that e-commerce binding additional goods or services to their products should be clearly brought to the attention of the consumer. The default of consent should not lie with the presumption of additional services. Those who violate this provision will face a fine of 50,000 RMB - 200,000 RMB. Where the circumstances of the case are grave, the fine shall be between 200,000 RMB - 500,000 RMB.

6.  The consumer will be protected from unreasonable delays and deposits

During the “Double Eleven Festival”, delays with online shopping products make users anxious. The new e-commerce law stipulates that operators shall deliver their goods or services to consumers in accordance with the time agreed and bear any risks and liabilities for delays, unless the consumer chooses a separate courier.

The Law also states that if an e-commerce operator requires a deposit, it shall clearly detail the refund procedure for the deposit and may not set any unreasonable conditions. Where there has been a violation with regards to the deposit, a fine may be imposed.

7.  Unauthorized deletion of negative comments will lead to a fine.

The "E-Commerce Law" states that platform operators must not remove consumer’s evaluations of the products or services they sell on their platforms, even if they are negative. Where comments are removed, the operator may be fined 20,000 RMB - 100,000 RMB and if the circumstances are serious, the fine could be as high as 500,000 RMB.

8. Transaction information should be kept for at least 3 years

Details of e-commerce transactions should be traceable for a minimum of 3 years. Where it is not, a platform could face a maximum fine of 500,000 RMB. This may lead to greater use of cloud storage.


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