New e-Commerce law in force (China)

Published on 10 January 2019

In recent years, China’s e-commerce market has boomed and is now the world’s largest. In recognition of this, China has introduced its first comprehensive legislative framework governing e-commerce activities.

Why does it matter?

The new e-commerce law has several highlights to protect brand owners and consumers. The key changes affecting retailers include:

IP protection

  • All e-commerce businesses will be required to register with an official body to obtain a business licence, except for individuals selling self-produced agricultural products, home-made handicrafts etc.

  • E-commerce platforms will be held jointly responsible with merchants if they know or should know counterfeit items are sold. If the e-commerce platform operator fails to act on a report of counterfeit violations, they will face penalties of up to 2,000,000 RMB.

  • The new law provides for a “notice and take down – counter notice and recovery” procedure. It is worth noting that upon receiving the counter notice, the rights owner shall lodge a complaint or file a lawsuit within 15 days. Otherwise, the platform operator will promptly terminate all measures it has adopted.

Unfair competition

  • All operators online and offline will have fair competition obligations.

Reinforced consumer rights

  • E-commerce operators will be banned from fabricating sales statistics and posting false user reviews and/or deleting genuine reviews. Also merchants must clearly disclose any unfair conditions they place on sales and cannot simply assume consumers’ consent.

What action should you take?

  • Seek advice on the effect of the changes on any of your e-commerce activities in China

  • Register to obtain a business licence

  • Take steps to ensure compliance with these new laws. Particular attention should be paid to brand protection, unfair competition and reinforced consumer rights.
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