Calls for China’s new e-commerce rules to hit big sales platforms harder 

Beijing is determined to rein in the worst practices of its online retailers – selling to a nation of 1 billion shoppers – but some say a host of new measures due to come into force in May could go further 

Calls for China’s new e-commerce rules to hit big sales platforms harder 
The new measures will regulate new types of e-commerce such as live streaming and fictitious traffic data.   

(ATF) China has told its nation of 1 billion shoppers that it is bringing in new legislation aimed at curbing the worst excesses of misbehaving e-commerce firms.

The new measures will come into force in May after criticisms that the current levels of fines were no deterrent for the likes of Alibaba, JD.com and various others. 

Officials now appear hell-bent on chopping the large commercial platforms down to size, and making sure they have full control over new technologies, such as live streaming.

Read more: Video site Bilibili gets the nod for a listing in Hong Kong

The news was broadcast on CCTV on Wednesday that, in less than two months, the newly released Internet Transaction Supervision and Administration Measures will be implemented. 

This measures will clearly regulate new types of e-commerce such as live streaming and new types of “unfair competition behaviours” such as fictitious traffic data. 

At the same time, CCTV reported that some people in the industry believe that there is room for further adjustment to the punishments and that fines to date have been miniscule, given the size of the companies.

Ouyang Rihui, deputy dean of the China Internet Economic Research Institute of the Central University of Finance and Economics, said: “[The measures] have comprehensively sorted out some new formats and new problems that have emerged in recent years. The regulations are more detailed and more actionable.”

LIVE STREAMING

Emerging fields such as live streaming and social e-commerce have been covered by the new rules. Now, the storage time for live video should be not less than three years from the end of the live broadcast.

Pan Helin, Executive Dean of the Digital Economy Research Institute of Zhongnan University of Economics and Law, said this new provision will protect the rights and interests of all parties to a certain extent. 

"The purpose of keeping [video] for three years after the live broadcast is to collect evidence and keep a record. When a dispute arises, it protects both consumers and the host’s own legitimate rights and interests.”

DATA FABRICATION

The new rules also target the issue of data falsification, and that online transaction operators must not fabricate transactions, fabricate user reviews, fabricate traffic data such as clicks and attention, or fabricate transaction interaction data such as likes and rewards. 

Ouyang Rihui says that the authorities have to be vigilant against the challenge of endless new types of unfair competitive behaviour.

"With the use of new technologies, the development of new business formats, and the emergence of new models, new types of unfair competition will definitely appear. But at present, this new approach has already eliminated some expected unfair competitive behaviour,” they said.

INDUSTRY VOICES

However, some industry voices believe that there is still room for more adjustment, particularly when it comes to fines.

Pan Helin noticed that the penalties mentioned in the current measures are mostly set as absolute penalties. In his view, for ordinary online trading operators, this punishment is sufficient, but for top trading operators and high-value trading operators, a relatively higher amount of punishment needs to be introduced. 

He said: ”The top trading operators themselves have a huge transaction volume, even thousands of small fines cannot have a disciplinary effect on them.”

Also on ATF:

Blacklisted Chinese firms eye lawsuits after Xiaomi 'win' against Trump ban

Huawei announces 5G royalty rates for smartphone makers

e-commerce JD.com Alibaba CCTV retail