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China's SAIC to Crack Down on E-commerce Platforms, Merchants, and Online Ads

SAIC, 5/04/16

China's State Administration for Industry and Commerce (SAIC) recently posted a message on its official website saying that it will conduct a campaign to enhance supervision of online marketplaces from May-November 2016. The notice lists numerous objectives and actions that will be taken by the administration, including:

  • From May-November, monitor and supervise online purchases of key products, including goods for children and the elderly, electronics and appliances, home improvement materials, automotive parts, apparel, and fertilizer.
  • From June-November, verify that online store operators and legally registered business entities are operating under their real names and are the sole proprietors of those stores.
  • From May to July, strengthen quality control of goods purchased online.
  • From May to November, crack down on online trademark infringement and related unlawful activities.
  • From May to November, crack down on false and illegal online advertisements, and initiate a special program to clean up online finance advertisements.
  • From May to November, maintain orderly and fair competition by cracking down on illegal activities, such as spreading false rumors online and selling counterfeit brand-name merchandise.

From June to November, local regulatory authorities will monitor platforms and ensure they are carrying out the following duties and responsibilities:

1. Inspect, register, and make public the operating credentials of third-party merchants operating through their respective platforms.

2. Clarify the responsibilities merchants have when operating via their respective platforms.

3. Formulate merchant supervision systems.

4. Inspect and supervise merchants' transaction information.

5. Take responsibility and mediate between customers and merchants to uphold consumer rights protection laws.

6. Provide clear indication of which services are self-operated and which are operated by third-party merchants.

7. Assist government regulators investigating illegal operating behavior and provide relevant information and data.

8. Pay compensation to consumers for any products a platform has guaranteed.

9. Prohibit the advertisement of false transaction volumes or transaction values from merchants.

From July-November, local government supervisory agencies will inspect and evaluate online transaction platforms and will meet with companies to discuss any problems.

From May-November, local government supervisory agencies will perfect systems for online complaints and after-market consumer rights protection, and will crack down on violations of consumer rights.

From May-November, local government supervisory agencies will record penalties incurred by online platforms or merchants, and will make this information public via the National Enterprise Credit Information System, a nationwide database of corporate information made available to assist the public in evaluating a company’s creditworthiness.

Keywords: regulation e-commerce Internet monitor SAIC complaint penalty consumer protection

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The information contained in this newsletter is based upon sources that Marbridge Consulting believes to be reliable, and we have made every effort to translate the original articles or article excerpts as faithfully as possible. However, Marbridge Consulting makes no warranty of and assumes no legal responsibility for the accuracy of either the original source material or the English language translations.

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