New Provisions in the Second E-Commerce Draft of China

Last year in the month of November, the Standing Committee of the National People’s Congress of China published the second draft of the e-commerce law in China. The Second Draft is formulated with the view to promoting the continuous and sound development of e-commerce, regulating market order, and safeguarding the legitimate rights and interests of the people.

What’s new in China’s e-commerce law-

E-commerce has exploded in China over the last decade and it is a big business in this country as the Chinese consumers spend more online than their counterparts anywhere else in the world. Keeping the enormous importance in mind the standing committee of the national people’s congress of China is given the task to draft and make changes in the e-commerce law. The Ecommerce law shall not repeat the contents already mentioned in prevailing laws and regulations such as the electronic signature law of 2004.

In the field of consumer protection the Ecommerce law will only be used in addition to the law on protection of consumers’ rights and interests. There are so many provisions that appeared in the first one are dropped in the second draft. Let’s take a look at the things mentioned in the new e-commerce draft.

  • According to the second draft e-commerce operators must comply with the country’s cybersecurity law. That signifies Inc. and other e-commerce companies would have to abide by the law’s requirements to store personal data on servers inside China, restrict exporting data overseas, and set personal information security standards.
  • E-commerce businesses require to register with local administrators, according to the draft, making it easier for consumers to acquire information about and report or sue a vendor in a dispute.
  • Foreign-owned operators of e-commerce platforms will be excluded from operating in the Chinese market. Sales of foreign products will be forced to come into China through Chinese owned or controlled platforms.
  • According to the Draft, e-commerce platform operators must provide takedown procedures, allowing IP owners to request the takedown of infringing links or even the closure of the web shop, if the IP owner can provide prima facie evidence of infringement.
  • E-commerce Law (the “Second Draft”) provides many regulations about data and information: Thus, it is laid out in detail under which circumstances data collection is allowed. Moreover, before using the private data, the use of that amount of data has to be approved by the user. However, the security of private data must be guaranteed.

The foreign e-commerce companies need to comply with this newly regulated e-commerce law of China.

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