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Global Media and Communications Watch The International Legal Blog for the Tech, Media and Telecoms Industry
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China strengthening consumer protection in e-commerce

0312242It is no exaggeration to say that e-commerce is huge in China. E-commerce sales on China’s Singles’ Day (11 November 2016) have been hitting record-high year and year again. This year, it was reported that online consumers of Alibaba’s Chinese website have spent over US$17 billion on the Singles’ Day in just 24 hours.

Amid this popularity of e-commerce, the Chinese Government is stepping up its efforts in enhancing consumer protection ins this space. Recently, China’s State Administration for Industry and Commerce (SAIC) released an Opinion for Online Consumer Protection in China. The Opinion identifies the key types of consumer goods for enforcement and also touches on the various enforcement methods that the authorities will take, e.g. random sampling, name-and-shame, monitoring of emerging products/technology, etc. We set out the key points from the Opinion below.

Quality of goods traded online

  • The State Administration of Industry & Commerce (SAIC) will rely on both consumer complaints and its own monitoring to identify problems with quality of goods traded online.  Sampling for quality will be incorporated into annual plans of local authorities.
  • The SAIC will focus on electronic goods, household electrical appliances, clothing, hats, shoes, children products and car accessories for sampling for quality.  This is consistent with the Law on Protection of the Rights and Interests of Consumers which also placed more emphasis on these goods due to their popularity on online sales platforms.

Online sales platforms

  • The SAIC will increase its efforts against online retailers and businesses which sell unsatisfactory products.  Such retailers and businesses will be ordered to cease sales and to remove product information which does not comply with the law.
  • Where the breaches threaten to cause harm to persons or property and do not comply with standards, the SAIC will also request online platform providers to remove the relevant product or store from the platform.  The platform provider must also cease providing services to the relevant retailers and businesses.
  • Online suppliers must establish systems to compensate consumers and actively mediate disputes.
  • The SAIC also encourages the setting up of dispute resolution mechanisms for cross-border online transactions.

Other enforcement actions

  • The SAIC will strictly investigate and deal with misleading advertisements, trade mark infringement, illegal promotions, false credentials and false online ratings.  The SAIC will also look into illegal behaviour in the areas of returns and warranty and protection of consumers’ personal data.
  • Emerging areas such as informational services, smart home services, services for elders and health services will also be monitored.  The SAIC will monitor for acts which breach consumers’ rights whilst allowing for room for innovation from providers.

Official online complaint platform

  • The Opinion stated that the SAIC’s official online complaint platform will be set up speedily.  The complaint platform will allow consumers to lodge online and follow up on the complaints online.
  • The complaint platform will run alongside the existing phone complaint system.

Additional deterrence measures

  • The results from sampling of online goods will be released to the public by the SAIC.
  • Suppliers who receive administrative punishment three or more times within two years will be placed on a blacklist.
  • The SAIC will utilise social media channels like WeChat and Weibo to educate the public on consumer protection laws.

The Opinion is a sign that the SAIC is determined to keep up with developing consumer trends.  Recent laws (also see our recent article on Implementing Regulations on the Protection of the Rights and Interests of Consumers) and the Opinion place emphasis on protection of consumers rights online. All e-commerce sellers and platform operators must familiarise themselves with these new enforcement initiatives – whether  they are selling traditional popular commodities such as electronics and clothing or emerging informational and smart home services.