China’s New E-Commerce Law

In the last 15 years or so, our buying habits changed dramatically with the global rise of online shops like Amazon or German Zalando. In China, e-commerce is even bigger. This is why the country wants stricter regulation of the booming online retail industry and more requirements for e-commerce participants. But does China’s new e-commerce law (link to the article) go far enough?

The law came into effect on January 1, 2019. A central provision is that it strengthens an e-commerce platform’s liability in dealing with intellectual property infringements. If an IPR holder believes that his rights have been infringed by sellers on an e-commerce platform, he has the right to notify the platform operator to take necessary measures such as deleting or blocking relevant product information. Upon receipt of the notice, the platform operator shall react promptly and forward the notice to the seller of the infringing product. If the necessary measures are not taken, the platform shall bear joint liability together with the seller.

The new law also includes rulings that aim at simplifying cross-border transactions in the e-commerce industry. China promised to improve management systems e.g. for customs, taxation, in- and outbound inspections, quarantine and many more. However, the norms are frame-based and general. Without detailed regulations, it seems rather unlikely that the provisions will have a significant effect on the industry.

Finally, the law now equips state authorities with unrestrained access to platform operators’ data when necessary. Previously, platforms – especially Chinese e-commerce giants – regarded their data as a core trade secret and refused cooperation. Although broader access rights might improve litigation, China’s collection of data is consistently criticized by experts both in China and in the West.

Source: The National People’s Congress of the People’s Republic of China, Image: Alibaba

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