The system of legislation on e-commerce in the People's Republic of China
Ensuring effective legal regulation of public relations requires the availability of a system of legal sources that meets objective requirements. Currently, e-commerce is developing rapidly around the world, and the People's Republic of China is the fastest growing country in this field. This article examines the system of legislation on e-commerce in the People's Republic of China. The main stages of the development of e-commerce legislation in the People's Republic of China and important issues that Chinese scientists and legislatures have paid attention to are revealed. The subject of this article is an analysis of the current state of legal regulation of e-commerce in China. The main trend in the development of e-commerce legislation in the People's Republic of China is analyzed from the point of view of technological development and strengthening of the comprehensive e-commerce law. Special attention is paid to the rule of e-commerce platforms.
Keywords: e-commerce, PRC, legislation, legislative trend, e-commerce platforms, platform operator.
E-commerce is gradually becoming an integral part of the global economy. Due to the rapid growth of e-commerce and for its further regulation, e-commerce legislation is actively developing in China.
The development of the Law of the People's Republic of China "On Electronic Commerce" has basically passed through three stages.
The first stage began in 2000. The National People's Congress decided to maintain Internet security, and the State Council unveiled Measures to Manage Internet Information Services and Telecommunication Rules. These legal acts formed the basis of the current legal system of e-commerce.
The second stage falls on 2001-2008. Over the past eight years, e-commerce in China and the world has experienced a period of ups and downs. The Law of the People's Republic of China "On Electronic Signature" was promulgated in 2004. And already in 2005, the Central Bank issued Rules for Electronic Payments (No. 1), and the Ministry of Commerce issued Guidelines on Online Transactions (interim). These are the rules formulated by the legislature during a period of low e-commerce development, which we call the initial stage.
The third stage is after 2008, when the development of e-commerce has clearly entered a stage of intensive development and is rapidly spreading to the entire Chinese society. A series of innovations in mobile e-commerce, internet finance, and taxi hailing software, including the annual November 11 promotion and Alibaba's listing in the United States, have made e-commerce the focus of public attention. In this case, the implementation of appropriate legislative policies and measures has become more intensive.
In 2010, the People's Bank of China issued Measures for the Administration of Payment Services for non-financial organizations, requiring non-financial organizations providing payment services to obtain a "license to carry out payment activities."
In 2011, 9 ministries (bureaus), including the Ministry of Commerce, the Ministry of Industry and Information Technology, the Ministry of Public Security and the People's Bank of China, issued a Notice on further measures to combat intellectual property infringement, as well as the production and sale of counterfeit and low-quality products in the field of online shopping.
In February 2012, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Commerce and other eight ministries and commissions jointly issued a Notification on Promoting Healthy and Rapid development of e-commerce. In March 2012, the Ministry of Commerce published "Several opinions on the use of e-commerce platforms for the development of foreign trade", and in April 2013 The National Development and Reform Commission, the Ministry of Finance, the Ministry of Agriculture and other 13 ministries (bureaus) jointly issued a Notice to further promote the healthy and rapid development of e-commerce. In October 2013, the Ministry of Commerce issued the Conclusions of the Ministry of Commerce on the implementation of e-commerce.
In 2014, the State Administration of Industry and Trade published Measures for the Supervision and Administration of Online Transactions, etc.
Such legislative acts in the field of electronic commerce became the basis for the promulgation of the Law of the People's Republic of China "On Electronic Commerce".
In addition, during the analysis of research in the field of e-commerce legislation in China from 1999 to 2020, it can be noted that from 1999 to 2004, scientists mainly paid attention to specific e-commerce issues and used keywords such as electronic contracts, electronic signatures and data messages <1>.
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<1> Wang Danxia. Research on some legal issues of e-commerce. Dalian Maritime University, 2000, 2000.
From 2005 to 2010, keywords were relatively diverse, and it was a period of steady development of research in the field of e-commerce legislation in China.
The main new key phrases during this period were "legal system" <2>, "tort liability", "intellectual property rights", "legal norms", etc.
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<2> Li Sizhi. Comparison and education of the legal environment of e-commerce between China, Japan and Korea [J] // Business Times. 2007. N 34. p. 27 - 28, 2007(34):27-28.
The issues of intellectual property rights in e-commerce and the creation of a comprehensive law on e-commerce were acute at that time and represented the basic legal theory of the need to create a comprehensive law on e-commerce in the future.
From 2011 to 2020, scientists in the theoretical circle paid attention to the regulation of operators of e-commerce platforms. The research interest mainly consisted in discussing issues related to operators of e-commerce platforms, such as tax collection and administration <3>, protection of consumer rights and interests, as well as security obligations <4>.
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<3> Xie Bofeng. Views on some issues of China's e-commerce taxation policy [J] // Finance and Trade Economics. 2014. N 11. P. 5 - 12:, 2014(11):5-12.
<4> Xue Jun. Preliminary interpretation of the responsibility of the platform in the legislation on e-commerce [J] // A study of China's market surveillance. 2019. N 1. P. 18 - 21, 2019(1):18-21.
This is due to many illegal actions of e-commerce platform operators using their dominant position in electronic transactions.
Thus, it can be noted that research in the field of e-commerce legislation in China has different key topics in different periods. Starting from earlier questions regarding electronic contracts, electronic signatures and others, and ending with more recent questions related to e-commerce platform operators and security obligations, it can be found that changes in the research topics of e-commerce legislation are closely related to the development trends of e-commerce in China.
Research in the field of e-commerce legislation in China is also focused on the technological development of e-commerce and the improvement of the e-commerce legislation system. In particular, trends in research on e-commerce legislation mainly include the following.
Firstly, from the point of view of technological development, it is necessary to expand the scope of regulation of the Law of the People's Republic of China "On Electronic Commerce".
The emergence of new technologies such as artificial intelligence, big data and cloud computing has brought new business models and huge industry advantages to China's e-commerce, but at the same time, phenomena such as "big data algorithms" and other consumer rights violations by platform operators using their dominant position have emerged in electronic transactions.
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<5> Li Fengxia, Li Chenxi, Lu Yang. The state of research, the process of evolution and trends in legislation on e-commerce in China // Modern Economics. 2021. N 12. pp. 115 - 121. 115 - 121.
For example, since 2013, during the e-commerce festivals "June 18" and "November 11", the media publish news that the operator of the Tmall platform requires sellers to "choose one operator", i.e. during the promotion period, sellers participate only on the Tmall platform <6>. In March 2018 Walmart online store has stopped the Alipay payment system in western China and has satisfied only the WeChat Pay system as a mobile payment method <7>. Also in April 2018, the operators of the takeaway food platforms Meituan and Eleme disconnected sellers from the Didi platform <8>. This behavior has been occurring more and more in recent years.
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<6> Chen Lei. "Exclusively cooperating" with Tmall, the online store will incur huge losses [N]. Southern Metropolis Daily, 2017-7-12:AA12, 2017-7-12:AA12.
<7> Chen Jing. Pay with the condition "choose one of two" [N], Economic Daily, 2018-4-4:9, 2018-4-4:9.
<8> Wen Jing. Meituan, Didi, Eleme were urgently interviewed - the three main food delivery platforms respectively stated that they would immediately fix the situation as needed [N]. Beijing Youth Daily, 2018-4-12:A13, 2018-4-12:A13.
Based on this, in February 2021, the Antimonopoly Commission of the State Council of China formulated and issued an Antimonopoly Guide on the Platform Economy, which provided for some measures to prevent the monopoly of Internet platform operators.
In addition, the Law of the People's Republic of China "On Network Security", Measures for the Supervision and Administration of Online Transactions (draft for comments), the Regulation on the Regulation of the Internet Information Services Market and other relevant regulations contain some provisions to prevent unfair competition from companies using online platforms.
It is also worth noting that one of the important issues currently in China is the regulation of big data algorithms. In this regard, on November 16, 2021, the Chinese Cyberspace Administration, the Ministry of Industry and Information Technology, the Ministry of Public Security and the State Administration for Market Regulation reviewed and approved the Regulation on the Management of Recommendations on Algorithms in Internet Information Services, which comes into force on March 1, 2022.
The next important issue is to strengthen the comprehensive e-commerce law. At an early stage, China adopted separate regulations in the field of e-commerce, the purpose of which was to solve specific problems in the development of e-commerce.
For example, the Law of the People's Republic of China "On Electronic Signature", adopted in 2004, is aimed at resolving legal issues related to data messages and electronic signatures, and Measures for the administration of payment services for non-financial organizations, issued in 2010, also contained administrative provisions regulating behavior in the field of electronic payments.
However, with the development of e-commerce, this legislative model made it difficult to achieve unity of regulatory legal acts in the field of e-commerce. As a result, the legislative bodies chose the model of a comprehensive law, and the Law of the People's Republic of China "On Electronic Commerce" was adopted in 2018.
Security issues in the process of e-commerce transactions are also an important issue in this area.
In addition to the Law of the People's Republic of China "On Electronic Commerce", the relevant provisions of the current laws of the People's Republic of China on supervision of online platforms mainly include: the Law of the People's Republic of China "On Consumer Protection", the Law of the People's Republic of China "On Unfair Competition", the Law of the People's Republic of China "On Prices", the Law of the People's Republic of China "On Food Safety", the Law of the People's Republic of China "About advertising", etc.
Also, the Civil Code of the People's Republic of China, adopted in 2020, provides for relevant provisions on contracts (e-commerce) concluded using the Internet, and the legal force of these contracts.
The Law of the People's Republic of China "On Network Security" provides for the right to regulate information about the platform, i.e. to grant network operators the right to control information provided by users and, on their own initiative, stop transmitting information and eliminate negative impacts if necessary.
With regard to the protection of personal information, the right to privacy and personal data protection was strengthened in Chapter 6 of Book four of the Civil Code of the People's Republic of China. In addition, on August 20, 2021, the Law of the People's Republic of China "On Personal Data Protection" was adopted (entered into force on November 1, 2021).
It should also be noted that the rules of the platform play an important role in the system of legislation in this area.
The platform's rules cover user service agreements, privacy policies, evaluation rules, user integrity agreements, security management measures, complaints of violations, dispute resolution and other aspects.
The formation of platform rules is created by the operators of e-commerce platforms based on the needs of the market and solving various transaction problems against the background of imperfect national laws.
For example, when the Ministry of Transport and other ministries formulated and revised Temporary Measures to Administer the Management of Online Taxi Services, they relied entirely on the content of the rules of many platforms (for example, Didi, CaoCao Travel and Dida Travel).
In addition, due to the risks of virtual transactions and information asymmetry on e-commerce platforms, government supervision has become more complex and there is a need for platform autonomy.
On the one hand, e-commerce platform operators can install a full license verification mechanism, information disclosure and other mechanisms in accordance with the platform rules to prevent high-risk sellers from entering the platform.
On the other hand, platform operators take full advantage of information technology and establish regular spot checks in accordance with the rules of the platform to carry out comprehensive supervision of the sellers of the platform. E-commerce platform operators discover illegal facts through active monitoring and consumer complaints in order to initiate verification and possible liability for platform sellers.
In order to promote the broader development of e-commerce, e-commerce platform operators have introduced many innovations in the field of consumer protection. In most cases, the judicial authorities recognize and maintain the necessary rights to manage the platform in accordance with the service agreement, and effectively encourage and guide the development of the autonomy of the platform through judicial practices.
For example, in the case of Fuzhou Jiunong Trading LLC v. Shanghai Xunmeng Information Technology LLC <9> on a network service agreement, although the court ruled that there were differences between the platform's rules on "consumer compensation" and the rules for damages in the national law, it still recognized the content of the platform's rules on both sides. First of all, the "consumer compensation" rule is the result of an agreement between the platform operator and the platform seller, and there is no coercion regarding the will of the platform seller. In addition, the rule on "consumer compensation" complies with the requirements of the law.
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<9> The decision of the first instance in civil cases of the People's Court of Changning District, Shanghai (2017) N 0105-20204.
To summarize, it should be noted that the system of e-commerce legislation in China is gradually developing, and currently it consists of national laws and platform rules.
National laws mainly include the Law of the People's Republic of China "On Electronic Commerce", the Law of the People's Republic of China "On Network Security", Temporary Measures for the Administration of online taxi services, Measures for supervision and administration in the field of food safety, etc. And the most common rules of the platform are such as the General Rules of the Taobao Platform and the Agreement about the service of Meituan users, the General rules of the Didi platform users and others.
There is a division of labor and cooperation between national laws and platform rules, as well as differences. Most of the platform's rules are a repetition and clarification of national laws. Only a small number of the platform's rules are new rules based on existing regulation.
Most of the platform's rules still comply with national laws, and only a small part of the platform's rules contradict national laws. However, the current legislation gives national judicial authorities the right to approve, supplement, amend and refute the rules of the platform.
