31 March, 2016
On 4 February 2016, the State Administration of Press, Publications, Radio, Film and Television (SAPPRFT) and the Ministry of Industry and Information Technology (MIIT) jointly issued the Provisions on the Administration of Network Publishing Services (hereinafter, “Provisions”). The Provisions, with effect from 10 March 2016, specify the definition of, licensing requirements for, management of, supervision of and other relevant issues pertaining to the online publishing service.
The Provisions are based on the Regulations on Publication Administration and the Administrative Measures on Internet Information Services published by the State Council and other related legislation and will replace the Interim Provisions on Internet Publication Administration 2002.
The Provisions contain seven articles and 61 clauses and expand on the Interim Provisions on Internet Publication Administration, which contain five articles and 31 clauses. This article provides a detailed discussion of the Provisions.
Online Publishing Service and Online Publication
Any online publishing service conducted within China shall fall within the jurisdiction of the Provisions. The Provisions provide definitions for “online publishing service” and “online publication”.
According to the Provisions, the online publishing service refers to the public dissemination of online publications through an information network. “Online publications” refers to digital works with editing, production, processing and other publishing features, including the following: (1) text, images, maps, games, animation, audio-visual books and other original digital works that contain knowledge and thoughts, in the fields of literature, art, science, etc.; (2) contents of digital works consistent with published books, newspapers, periodicals, audio-visual products and electronic publications; (3) network document databases and other digital works derived from new selections, compilations and collections of the above-mentioned works; and (4) other digital works as identified by the SAPPRFT.
SAPPRFT will separately publish a detailed business classification for the online publishing service.
Competent Government Authority and Management Mode
SAPPRFT, as the competent authority for the online publishing service industry, is in charge of the pre-approval, management and supervision of the nationwide online publishing service. MITT, as the competent authority for the internet industry, is in charge of the management and supervision of the enforcement of the nationwide online publishing service, pursuant to its jurisdiction and authority.
With respect to daily supervision and management, a multi-level management system has been put in place. Different levels of publishing administration departments within the local government and different provincial telecommunication departments shall perform their duties of supervising and managing online publishing services and assess services within their respective administrative regions, in accordance with their respective jurisdictions and powers.
Entities that intend to engage in the online publishing service shall have the following qualifications:
(1) A platform for engaging in the online publishing service with a dedicated website domain, intelligent terminal applications, etc.;
(2) A definite online publishing service scope;
(3) Technical equipment required for engaging in the online publishing service with relevant servers and data storage devices located within China;
(4) Distinct and non-repeating names and articles of association for online publishers;
(5) Qualified legal representative and principal person-in-charge. The legal representative shall be a Chinese citizen permanently residing in China with full legal capacity; at least one professional with an intermediate professional title or above shall serve as the legal representative and/or principal person-in-charge;
(6) Apart from the legal representative and principal person-in-charge, eight or more professional editor and publishing persons with publishing qualifications or relevant professional qualifications approved by the SAPPRFT; among whom at least three personnel shall hold intermediate professional titles or above;
(7) Content review and editing systems required for engaging in online publishing services;
(8) A fixed place of business; and
(9) Other requirements prescribed under the laws and regulations and required by the SAPPRFT.
In the event that publishers of books, audio-visual products, electronic publications, newspapers and periodicals intend to engage in the online publishing service, such publishers need only satisfy requirements (1) to (3).
When applying for a Network Publishing Services License, the online publisher shall first apply to the relevant provincial publishing administration authority by submitting the application form and other materials proving its licensing qualifications. After obtaining the approval of the local authority, the publisher shall apply to the SAPPRFT for its approval and obtain the License, with a validity period of five years.
In the event that the online publisher changes its registration information, capital structure, undergoes a merger or divestment, or establishes a branch, the approval procedure shall be carried out in accordance with the Provisions.
Limitation on Foreign Investment
In terms of foreign investment in online publishing services, the Provisions adopt the same practices as in the Catalogue of Industries for Guiding Foreign Investment 2015, under which the online publishing service falls within the category of prohibited foreign investment. It is expressly provided under the Provisions that, equity joint ventures, cooperative joint ventures and foreign-funded enterprises are prohibited from engaging in online publishing services.
In addition, the Provisions further broaden the administrative approval and examination scope to capture the following foreign-related issues, in order to strengthen the management and supervision of such entities:
(1) For project cooperation of online publishing service business between an online publisher and an equity joint venture, cooperative joint venture, foreign-funded enterprise or overseas organization or individual, the prior approval from the SAPPRFT shall be obtained.
(2) For the online publication of online games (including those authorized by overseas copyright holders), prior approval from the local provincial publishing authority shall be obtained, after which, approval from the SAPPRFT shall be sought.
Responsibilities and Liabilities of Online Publishers
An editor responsibility policy has been applied to online publishers to ensure the legitimacy of the content of online publications.
The online publication shall not contain content that:
(1) opposes the cardinal principles determined in the Constitution;
(2) endangers the unity, sovereignty or territorial integrity of the nation;
(3) divulges state secrets, endangers national security, or damages the honor and interests of the nation;
(4) incites ethnic hatred or ethnic discrimination or undermines national solidarity, or is aggressive towards national customs and habits;
(5) propagates heresies or superstition;
(6) disseminates rumors, disrupts social order or undermines social stability;
(7) disseminates obscenity, pornography,
gambling, violence or instigates others to commit crimes;
(8) infringes others' legitimate rights and interests by insulting or slandering others;
(9) endangers social morality or national splendid cultural traditions; or
(10) induces juveniles to imitate misconduct that violates the social morality or constitutes crimes; includes content categorized as horror, cruelty, etc., which content is hazardous to the mental and physical wellbeing of juveniles; discloses the private information of juveniles.
When publishing works have been legally published by other publishers online and the original content is re-published, the name of the original publisher, book number, issue number, online publication number and/or website information shall be indicated on the online publication in a notable manner.
If the online publisher intends to publish contents that are related to national security, social stability and other major subjects, it shall do so by filing according to the relevant regulations on primary subject selection set forth by the SAPPRFT. Any unrecorded primary subject shall not be published
The online publisher shall record the contents, time, website and/or domain name of its publication, and such record shall be kept for 60 days and shall be provided when duly requested by the relevant authority of the nation.
In the event of unauthorized online publication activities or online publication of online games (including those authorized by overseas copyright holders), such publication shall be banned by the Publication Administration Department, Administration of Industry and Commerce, and the publisher shall be ordered to close down the website and/or be subject to other punishment by the relevant provincial telecommunication department. Where such activity constitutes a crime, criminal responsibility shall be investigated in accordance with the regulations on illegal business operations. Where such activity does not constitute a crime, all relevant online publications shall be deleted, and the main facilities and special tools used in the illegal publication activities, as well as all illegal income, shall be confiscated. Where the illegal business income is more than RMB10,000, a fine not less than five times but below ten times the illegal income shall be imposed; where the illegal business income is less than RMB10,000, a fine not more than RMB50,000 shall be imposed thereon.
In the event of publishing and disseminating any online publications with prohibited content, the publisher shall be ordered to delete the relevant contents and take corrective actions within a given period by the Publishing Administration Department and all illegal income shall be confiscated. Where the illegal business income is more than RMB10,000, a fine not less than five times but below ten times the illegal income shall be imposed; where the illegal business income is less than RMB10,000, a fine not more than RMB50,000 shall be imposed thereon. In the event of a serious case, the publisher shall be ordered to suspend its business or may have its Network Publishing Services License canceled by the SAPPRFT; and the publisher’s website shall be closed down by the relevant telecommunication department according to the notice of the Publishing Administration Department. Where such conduct constitutes a crime, criminal responsibility shall be investigated in accordance with the law.
The Provisions specify the requirements and procedures for the acquisition of a Network Publishing Services License; the Provisions also further strengthen the supervision power of the relevant publishing administration authorities pertaining to the online publishing service. The primary aspects of the Provisions are as follows:
(1) Extensive Applicability
The online publications prescribed under the Provisions can be widely interpreted. Apart from this general definition, the Provisions also list the scope of online publications by enumeration. In addition, a general provision involving “other types of digital works identified by the SAPPRFT” has also been inserted.
Due to this extensive applicability, it may be difficult to determine whether a publication will fall within the scope of an online publication. Further, the contents of the Provisions may overlap with those published by the competent telecommunications department, culture department, Administration of Industry and Commerce and other relevant authorities or may raise issues concerning the linkage and application between different rules and regulations. Given the fact that the SAPPRFT will separately set forth a detailed classification of the online publishing service business, we will be expecting further detailed judgment standards regarding such business.
(2) High Threshold for Licensing Qualifications, High Approval Level, Lengthy Approval Period
The Provisions have set forth high qualification thresholds for entities that intend to engage in the online publishing service. In particular, for entities not publishing books, audio-visual products, electronic publications, newspapers and/or periodicals, stricter licensing requirements will be applied to domain names, business scopes, facilities, employee qualifications, and publication content examination policies.
According to the Provisions, when applying for a Network Publishing Services License, pre-approval from the local provincial publishing administration department shall be obtained, after which approval from the SAPPRFT shall be acquired. As the approval period for SAPPRFT is 60 days and considering the extra time required for provincial approval, the total approval period is estimated to be no less than three months.
The abovementioned high thresholds for licensing qualifications, high approval level and relatively long approval period will inevitably increase the difficulty in obtaining a Network Publishing Services License.
(3) Strict Limit on Foreign-Related Issues
Pursuant to the Provisions, foreign-funded entities are prohibited from engaging in the online publishing service. With respect to project cooperation of online publishing service business between an online publisher and a foreign-funded enterprise or overseas organization or individual, Hongbin Zhang Partner Tel:86 10 8519 2425 Jiechun Xu Associate Tel:86 10 8519 2351
or publishing an online game authorized by overseas copyright holder, prior-approval from the SAPPRFT shall be sought.
The Provisions also provide that the related server and storage devices cannot be located outside of China. The applicant shall make a written warranty guaranteeing to store its relevant server in China when applying for a Network Publishing Services License.
Moreover, the legal representative of an online publisher shall be a Chinese citizen permanently residing in China with full legal capacity, i.e., a foreigner cannot be the legal representative of an online publisher.
Hongbin Zhang, Partner, Jun He