On March 15th, 2021, the General Administration for Market Regulation got the Measure on Supervision and Management of Network Transactions published which will come into effect on May 1st this year, this Measure regulate a series of specific rules of transaction regulation, main responsibility of platforms and protection of consumers’ rights and interests.
For supervision of new forms of network transactions, the Measure clearly stipulates the determination of the operators in current network transactions such as "social e-commerce" and "live sale". Network service providers shall fulfill the obligations for the network transaction platform operator according to law if the network service provider, such as social network and webcast, provides the operator with network business place, commodity browsing, order generation, online payment and other network transaction platform services at the same time. Operators who carry out network transactions through the above network transaction platform services shall fulfill the obligations of the operators within the platform.
For registration of the network operation entities, the Measure defines specifically the two categories of exemption from registration as "convenience services" and "sporadic small amounts" stipulated in the Electronic Commerce Law of People’s Republic of China. The convenience services through network for individuals do not need to obtain permission or license for cleaning, washing, sewing, haircutting, house-moving, key-preparing, pipe-dredging, furniture repairing and household appliances, or the accumulative annual turnover is not more than RMB 100,000 Yuan.
For liability of the platforms, the Measure stipulates that the platform shall submit the identity information of the operators in the platform to the provincial market regulation department of the domicile every six months; the platform shall establish an inspection and monitoring system for the business activities within the platform and also handle and report the illegal acts in time; the platform shall not interfere with the independent operation of the operators within the platform, and shall not prohibit or restrict the operators to choose multi-platform operation and the transaction auxiliary service provider as express logistics.
For protection of consumers’ rights and interests, the Measure requires that the operator shall not set the option of tying goods as the default consent of the consumer, and shall not set the option by consumers in previous transactions as the default choice of them. Operators with automatic repayment service shall bring it to consumer’s attention in a prominent way before the consumer accepts the service and also five days before the fee repayment so that the consumer would choose independently.
For protection of personal information, it’s stated in this Measure that network transaction operators shall express the purpose, method and scope of collecting and using consumers’ personal information with their consents; shall not force or disguisedly force consumers to agree to collect and use information that do not directly related to the business activities; must obtain consumers’ consents item by item before collecting and using personal sensitive information; and must not provide them to any third party without the consent of the collector, including related parties.
Meanwhile, the Measure also put some specific regulations on new forms of unfair competition as fictitious transactions, misleading presentation and evaluations and fictitious data traffic, network transaction violations would be prohibited.
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Mr. Mike Chang (Partner)
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Email: mikechang@shanghaiinvest.com