China Seeks to Update its Legislation to Address Burgeoning E-Commerce Market


With increasing internet penetration throughout the country, the e-commerce industry, like other industries in China, is growing at a swift pace. This was recently demonstrated by the online shopping frenzy for Singles Day (光棍节) which is China's 'Anti-Valentine's Day' and takes place on November 11 every year, with RMB 35.01 billion transacted over Alipay alone via Taobao Marketplace and Tmall. However the relevant legislation in China has not kept pace with the new issues thrown up by this astonishing growth. As a result, the Chinese government has, in the past year, released laws, regulations and guidelines focusing on e-commerce consumer protection and unlawful disclosures of personal data, and is trying to update previous laws to meet the new challenges of e-commerce with Chinese characteristics.

Recently, China's State Administration of Industry and Commerce ("SAIC") issued a draft of the new Online Commodity Trading and Related Services Administrative Procedures (网络商品交易及有关服务管理办法) on 11 September 2013 (the "Draft Online Trading Procedures"), with the objective of revising and clarifying the Online Commodities Trading and Related Services Tentative Administrative Procedures (网络商品交易及有关服务行为管理暂行办法) issued by it on 31 May 2010 (the "Tentative Online Trading Procedures"). The aim of the Tentative Online Trading Procedures was to regulate online commodity trading conduct and to protect consumers and business operators engaging in online trading.

In addition, China's Ministry of Commerce ("MOFCOM") also released a draft of the Online Retailing Conducted on Third-Party Platforms Transaction Rules Administrative Procedures (网络零售第三方平台交易规则管理办法) on 26 September 2013 (the "Draft Transaction Rules Procedures"), which aims to regulate transaction rules stipulated by third-party service platforms (such as Taobao, Yihaodian and so forth). The above-mentioned drafts represent a further attempt to regulate the booming e-commerce industry, while providing a more secure environment for e-commerce. The very fact that these drafts have been issued suggests that that there are still a number of unresolved issues relating to e-commerce in China that the current legislative framework is ill-equipped to address.

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