This newsletter summarizes the latest developments in technology, media and telecom in China with a focus on the legislative, enforcement and industry developments in this area.
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Legislative developments
On 22 June, Xi Jinping presided over the 26th meeting of the Central Committee for Comprehensively Deepening Reform. The meeting emphasized accelerating the construction of the data foundation system and adopted Opinions on Building the Fundamental Data System to Make Better Use of Data Elements. Xi emphasized that the construction of the fundamental data system is related to national development and security and the state should maintain data security, protect personal information and trade secrets, promote efficient use of data and development of the entity economy, and integrate data property rights, circulation transactions, revenue distribution and security governance.
On 24 June, the Standing Committee of the National People’s Congress (SCNPC) adopted the Decision on Amending the Anti-Monopoly Law of the People’s Republic of China. The newly amended Anti-Monopoly Law of the People’s Republic of China (the “New Anti-Monopoly Law”) will come into force on 1 August 2022. The New Anti-monopoly Law clarifies the rules on its application to the platform economy, requiring that “business operators must not exploit any data or algorithms, technology, capital advantages or platform rules or otherwise to engage in any monopolistic conduct prohibited by this Law.”.
On 27 June, the State Administration of Market Regulation (SAMR) drafted 6 supportive documents of the New Anti-Monopoly Law, including the Provisions on Prohibition of Abuse of Dominant Market Position (Draft for Comment), the Provisions on Prohibition of Abuse of Intellectual Property Rights to Exclude or Restrict Competition (Draft for Comment), to solicit public opinions. The six drafts revised and improved the relevant provisions in the following areas respectively: review of the concentration of undertakings, standards for notification of concentration of undertakings, monopoly agreements, abuse of dominant market position, abuse of intellectual property rights to exclude and restrict competition and abuse of administrative power to exclude and restrict competition.
On 21 June, the SCNPC published the Anti-Telecom and Online Fraud Law of the People’s Republic of China (Draft for Second Deliberation) (the “Draft”) to solicit public opinions. The Draft puts forward requirements of the following aspects: “second real name authentication” for telephone cards, IoT cards, devices suspected of fraud, abnormal financial accounts, abnormal network accounts, APPs suspected of fraud and high-risk domain names. Furthermore, the Draft puts forward stricter compliance requirements for financial institutions, telecom enterprises and Internet enterprises.
On 23 June, the State Council issued the Guiding Opinions of the State Council on Strengthening the Construction of Digital Government (the “Opinions”). The Opinions put forward that governments should build a comprehensive security system for digital government, build an open data resource system, and lead the comprehensive digital development with digital government construction.
6. CAC issued the newly revised Administrative Provisions on Internet User Account Information
On 27 June, the Cyberspace Administration of China (CAC) issued the newly revised Administrative Provisions on Internet User Account Information (the “Administrative Provisions”), which will come into force on 1 August 2022. Compared to the 2015 version, the level of the new Administrative Provisions has been upgraded from regulatory documents to departmental regulations. The new Administrative Provisions specifies the obligations of Internet information service providers to display IP address (provincial scope) on the account information pages of Internet users.
On 14 June, CAC issued the newly revised Administrative Provisions on Mobile Internet Applications Information Services (the “New Provisions”), which will come into force on 1 August 2022. The New Provisions specify the compliance obligations of mobile Internet App providers providing App information services and mobile Internet App distribution platforms in China.
On 17 June, CAC released the Administrative Provisions on Internet Follow-up Comment Services (Revised Draft for Comment) (the “Comment Provisions”). The Comment Provisions specify the regulatory procedures and obligations that follow-up comment service providers, public account producers and operators, and users of follow-up comment services should comply with. And the Comment Provisions require that follow-up comment services shall not be provided to users who have not authenticated their identity, and that the content of follow-up comment information shall be reviewed before it is posted.
9. NRTA & MCT jointly released the Code of Conduct for Live-streaming Hosts
On 22 June, the National Radio and Television Administration (NRTA) and the Ministry of Culture and Tourism (MCT) jointly released the Code of Conduct for Live-streaming Hosts (the “Code”). The Code sets out specific requirements for live-streaming hosts, delineates the bottom line for the conduct of live-streaming hosts, regulates live-streaming marketing and sets penalties for live-streaming hosts’ violations.
On 30 May, Beijing released the Action Plan for the Open Development of the Whole Industry Chain of Beijing’s Digital Economy (the “Action Plan”). The Action Plan puts forward 23 measures covering the following aspects: accelerating data element transformation, promoting reform in the element market, creating new advantages in digital technology, empowering innovation and development in key industries, strengthening digital economy governance, and supporting digital economy development.
11. Liaoning Province released the Regulations on the Development of Big Data in Liaoning Province
On 8 June, the Standing Committee of the Liaoning Provincial People’s Congress adopted the Regulations on the Development of Big Data in Liaoning Province (the “Regulations”), which will come into force on 1 August. The Regulations are composed of chapters of “Data Element Market”, “Infrastructure”, “Data Security”, “Development Promotion”, etc., conducive to improving the data market distribution mechanism.
On 23 June, the Standing Committee of the Shanghai Municipal People’s Congress released the Regulations of Shanghai Municipality on the Protection of Consumers’ Rights and Interests (Revised Draft) (the “Regulations (Revised Draft)”) to solicit public opinions. The Regulations (Revised Draft) particularly specify the obligations of operators in new consumer scenarios, including: (1) the obligations of Internet operators; (2) the protection obligations that online game operators should comply with for minors participating in online games; and (3) the requirements of identity authentication and assistance in rights protection on live-streaming marketing platforms.
13. Shenzhen released the first ICV Administrative Regulation in China
On 23 June, the Standing Committee of the Shenzhen Municipal People’s Congress adopted the Administrative Regulation on Intelligent Connected Vehicle (ICV) in the Shenzhen Special Economic Zone (the “Regulations”). The Regulations is the first regulation in China to regulate the management of ICVs, and provide comprehensive provisions on road testing and demonstration, access and registration, and usage management of ICVs.
14. Changsha released the ICV Administrative Rules of road testing V4.0
On 6 June, Changsha released the Administrative Rules on Intelligent Connected Vehicle Road Testing and Demonstration in Changsha (for Trial Implementation) V4.0 (the “Administrative Rules 4.0”). Compared with the previous version, the Administrative Rules 4.0 adds content related to mutual recognizing licenses of road testing and demonstration. Test subjects who are qualified for road testing in other provinces and cities can be qualified for testing in Changsha after the recognition process here.
15. Chengdu released the ICV Administrative Rules of road testing
On 14 June, Chengdu released the Implementation Rules on Intelligent Connected Vehicle Road Testing and Demonstration in Chengdu (for Trial Implementation) (the “Implementation Rules”). The Implementation Rules specify the subjects of road testing, the roads (areas) for testing and demonstration, and the application review procedures.
Enforcement Developments
On 8 June, SAMR released the Annual Report on China’s Anti-Monopoly Enforcement (2021) (the “Report”). According to the Report, in 2021, the SAMR amended the Anti-Monopoly Law, formulated the Opinions on Strengthening Anti-Monopoly and Deepening the Implementation of Fair Competition Policy, investigated and dealt with “two-for-one” monopolistic conduct, banned mergers by head platform enterprises in the field of online game live-streaming, and removed the widely criticized exclusive copyright in the field of online music.
2. MPS launched special action to deal with “online armies”
On 26 June, the Ministry of Public Security (MPS) launched a six-month nationwide special action to deal with “online armies”, focusing on illegal acts such as manipulating or disrupting online public opinion, extortion through the hype of negative information and providing paid post deletion. Netizens can provide law enforcement departments with clues related to “online armies” through the website (cyberpolice.mps.gov.cn).
3. SAMR regulates the “6·18” online shopping promotion activities
On 8 June, the SAMR issued the Working Tips on Regulating the Business Activities of “6-18” Online Promotion (the “Working Tips”). The Working Tips include restating the responsibilities of platforms, strengthening the audit of goods and services, regulating advertising, prohibiting unfair competition, and strengthening communication and collaboration between government and enterprises.
4. Supplementary real-name registration for the SIM cards for vehicles is carried out in Shanghai
On 7 June, Shanghai issued the Notice on the Supplementary Real-Name Registration of the SIM Cards for Vehicles (the “Notice”). The Notice announced that from 7 June to 30 September, Shanghai would carry out the real-name registration of the SIM cards for vehicles. The Notice requires vehicle owners to complete the real-name registration; and if the real-name registration is overdue, telecom companies will “close the functions of SIM cards for vehicles other than emergency calls, emergency rescue and other functions affecting life safety”.
Industry Developments
1. 2022 Big Data Industry Summit was held and the value of data elements needs to be further released
On 28 June, 2022 Big Data Industry Summit was held, at which Zhang Jianlun, director of the Ministry of Industry and Information Technology (MIIT), said that the “14th Five-Year Plan” period is a key period for China to accelerate the construction of “Strong Manufacturing Country”, “Strong Network Country” and “Digital China” and that the big data industry will enter a new phase of common innovation, rapid development, deep application and structural optimization. Yu Xiaohui, Dean of China Academy of Information and Communication Technology (CAICT), pointed out that releasing the value of data elements is a major national development strategy in the “14th Five-Year Plan” and for a long period of time in the future, and also an important proposition for the development of enterprises.
2. China Mobile released the China Mobile 6G Network Architecture Technology White Paper
On 21 June, China Mobile released the China Mobile 6G Network Architecture Technology White Paper (the “White Paper”). The White Paper presents the industry’s first systematic design of 6G network architecture and points out that the next 3 to 5 years will be a strategic window for 6G network development, and 6G will be commercially available around 2030.
3. Shanghai released metaverse investment promotion plan
June 16 news, the 2022 Shanghai Global Investment Promotion Conference, organised by the Shanghai Municipal Government, was held in Shanghai. The Shanghai metaverse investment promotion plan was released at the conference. The plan shows that the metaverse industry is expected to exceed 350 billion CNY by 2025.
It was reported on June 20 that WeChat recently added a new entry for “virtual currency and Non-Fungible Token (NFT)” to its WeChat Public Platform Operation Guidelines, stating that if an account is involved in the issuance, trading and financing of virtual currency, WeChat Public Platform will order the public account to rectify the illegal act and will restrict some of the account’s functions or will even permanently block the account. In addition, accounts that provide services or content related to secondary trading of NFT will be also punished in accordance with this provision.
5. Kindle eBooks announced their withdrawal from the Chinese market
On 2 June, Kindle released an official statement saying that Amazon will stop supplying new Kindle eBook readers to resellers immediately and will cease operations of the Kindle eBookstore on 30 June 2023.
For further information, please contact:
James Gong, Partner, Bird & Bird
james.gong@twobirds.com
