--- title: "2019 – China's New E-commerce Law Comes into Force" url: 'https://argobs.com/en/2019-entra-in-vigore-la-nuova-legge-sulle-commerce-in-cina' markdown: 'https://argobs.com/en/2019-entra-in-vigore-la-nuova-legge-sulle-commerce-in-cina.md' lang: en date: '2019-02-25' description: "On 31 August 2018, the Standing Committee of the National People's Congress published the new e-commerce law, which then came into force on 1 January 2019. The new law regulates a market worth over 1,000 billion euros a year (about half of global sales according to eMarketer) with over 700 million …" taxonomy: category: - contraffazione - proprieta-intellettuale --- # 2019 – China's New E-commerce Law Comes into Force 25 February 2019 | Counterfeiting, Intellectual property On 31 August 2018, the Standing Committee of the National People's Congress published the new e-commerce law, which then came into force on **1 January 2019**. The new law regulates a market worth over **1,000 billion euros a year (about half of global sales according to eMarketer) with over 700 million users**. It is therefore of primary importance to understand how this law has begun to shape the Chinese online market and how it is affecting Chinese and international companies and their strategies. Many aspects of the new law restate and build on elements already codified in Chinese law, but some matters have been specified and amended that are worth dwelling on. The main new features introduced by the legislation are as follows: **INTELLECTUAL PROPERTY PROTECTION** The law clarifies a principle already present in Chinese law, namely that e-commerce platforms are held liable for infringements if, once aware of the violation, they fail to take the "**necessary measures**" to stop sales from continuing. The law, however, does not specify what the necessary measures are and does not clarify what level of proactivity is required of e-commerce platforms. As regards reports from trademark owners and holders of other intellectual property rights, the law provides that whenever a report is submitted, it must include evidence. This principle risks undermining the system set up by some e-commerce platforms (for example **Alibaba**), which provides a reduced burden of proof for **Good Faith Complainants** (parties with a high percentage of correct reports). In future, it is therefore to be hoped that the Chinese government will soften the notion of evidence required in notices, avoiding disrupting a system that had produced numerous benefits for brand owners. **Penalties** for non-compliant platforms range from **7,500 to 75,000 dollars and, in the most serious cases, up to about 300,000 dollars.** **REVIEWS AND COMMENTS ON E-COMMERCE SITES** The new law explicitly bans fake reviews, a practice that was widespread in previous years. The term **fake reviews** refers not only to people hired specifically to post positive comments about a product, but also to all those cases in which **discounts or refunds were offered to consumers in exchange for five stars and a positive comment**. As regards reviews, the law also expressly prohibits platforms from deleting negative comments on products. In connection with the previous section, this rule will be very useful to brand owners, who will be able to examine reviews to find clues pointing to counterfeit products. **BUSINESS LICENSE** **Sellers operating on e-commerce platforms will be required to display their business license**. Only very few exceptions to this obligation will be allowed. For example, occasional sellers or sellers of self-produced handicraft or agricultural products will be exempt. Those who fail to comply may face **fines of up to 1,500 dollars.** On the e-commerce platforms' side, this new rule entails **the obligation** to **notify non-compliant sellers that they must publish the documents required by law**. There is therefore no obligation for platforms to automatically exclude sellers who do not display business licenses and company registry extracts. This rule will make it easier for the authorities to identify those who sell **counterfeit products** online and, more generally, **illicit or dangerous goods**. In addition, the registration requirement will affect the **parallel import** of foreign products into China. Until recently this practice was carried out by unregistered individuals resident abroad, who bought products on behalf of Chinese consumers and then resold them on **Taobao** and other e-commerce platforms (in many cases without declaring their income to the authorities). **The obligation to register, and consequently to pay taxes and declare imports to customs**, will cause significant changes in the sector, leading to the disappearance of all those "non-professional" sellers. **PERSONAL DATA PROTECTION** The E-commerce Law also refers to **personal data protection**, recalling the data protection rules already in force in Chinese law. In particular, Article 24 of the e-commerce law specifies that operators of e-commerce sites must set out the methods and procedures users must follow to **update, amend or delete their personal data**. In addition, when a user requests the deletion of their data, it must be erased immediately (except for data whose retention is required by law). --- ## Navigation - Parent: [News](https://argobs.com/en/news.md) - Previous: [The Translation Error in the Italian Version of the European Copyright Directive](https://argobs.com/en/errore-traduzione-direttiva-copyright.md) - Next: [What Are European Trademarks?](https://argobs.com/en/che-cosa-sono-i-marchi-europei.md)