E-commerce

China regulatory authorities plan to strengthen control over e-commerce companies. – Lexology

Summary

China plans to tighten oversight of e-commerce companies. China’s largest e-commerce platforms include Alibaba’s Taobao and Tmall marketplaces, JD.com and Pinduoduo.

China’s market regulator proposed amendments to the country’s e-commerce law, which took effect in 2019, saying that e-commerce platforms will be restricted from online business operations or even have their licenses revoked if they fail to deal with serious violations of IP rights by vendors on their platforms. The d…….

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China plans to tighten oversight of e-commerce companies. China’s largest e-commerce platforms include Alibaba’s Taobao and Tmall marketplaces, JD.com and Pinduoduo.

China’s market regulator proposed amendments to the country’s e-commerce law, which took effect in 2019, saying that e-commerce platforms will be restricted from online business operations or even have their licenses revoked if they fail to deal with serious violations of IP rights by vendors on their platforms. The draft is under review until Oct. 14.

The existing legislation requires platforms to serve as a middleman between vendors and IP rights holders when conflicts occur. Platforms should delete, shield, or disconnect links to product pages, or cancel orders after they notice, or are informed about, possible IP violations.  The amended e-commerce law would retain the potential monetary penalties for violations under the current law, up to a maximum of two million yuan (approximately $309,521).

Rightsholders would also be given more power under the revised law. They would have 20 working days, instead of 15, to respond to vendors’ arguments.

The Chinese authorities have paid more attention to the protection of intellectual property rights in recent years. During the Sino-US trade talks in 2019, China said it would raise fines for intellectual property violations and aims to reduce frequent intellectual property violations by 2022.

SAMR indicated that, among other things, the revisions to the e-commerce law are intended to tighten the protection of intellectual property rights and promote the sustained and healthy development of e-commerce. The proposed amendments are consistent with Chinese regulators’ increasing focus on regulatory control over technology companies operating in the country, including the DSL and antitrust issues.

Source: https://www.lexology.com/library/detail.aspx?g=239e2d34-e335-4fa0-b1a1-310658885e9b

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