China prepares draft law to regulate e-commerce

A draft law aimed at regulating and facilitating e-commerce in the country has been tabled for review by legislators at the ongoing bi-monthly session of the National People’s Congress (NPC) Standing Committee. The draft law puts online and offline commercial activities on an equal footing, and also covers protecting the safety of e-commerce transactions.

In recent years, the boom in e-commerce had revealed loopholes in China’s legal system and commercial rules, said Lyu Zushan, deputy director with the NPC’s Financial and Economic Affairs Committee, while tabling the draft law for review.

The draft law will facilitate e-commerce growth, help maintain market order and protect consumer rights, Chinese media reported. Under the law, all e-commerce operators will have an obligation to pay taxes and would need to acquire the necessary business certificates.

As per the draft, it will be mandatory for operators to ensure the security of consumers' personal data. Those that fail will face fines up to 500,000 yuan and could have their business certificates revoked.

The draft requires e-commerce operators to protect intellectual property. It also asks third-party e-commerce platforms to offer technical support for “law enforcement activities by relevant authorities.”

At present, China is the world’s largest e-commerce market, with e-commerce trade amounting to more than 20 trillion yuan (about $2.87 trillion) in 2015, of which retail sales totalled 3.88 trillion yuan.

Last month, during its 24 hour Singles’ Day event, e-commerce giant Alibaba grossed 120.7 billion yuan in gross merchandise volume.