POSTED IN E-COMMERCE
It is no exaggeration to say that e-commerce is
huge in China. E-commerce sales on China’s Singles’ Day (11 November 2016) have
been hitting record-high year and year again. This year, it was reported that
online consumers of Alibaba’s Chinese website have spent over US$17 billion on
the Singles’ Day in just 24 hours.
Amid this popularity of e-commerce, the Chinese
Government is stepping up its efforts in enhancing consumer protection ins this
space. Recently, China’s State Administration for Industry and Commerce (SAIC)
released an Opinion for Online Consumer Protection in China. The Opinion
identifies the key types of consumer goods for enforcement and also touches on
the various enforcement methods that the authorities will take, e.g. random
sampling, name-and-shame, monitoring of emerging products/technology, etc. We
set out the key points from the Opinion below.
Quality
of goods traded online
·
The State Administration of Industry & Commerce
(SAIC) will rely on both consumer complaints and its own monitoring to identify
problems with quality of goods traded online. Sampling for quality will
be incorporated into annual plans of local authorities.
·
The SAIC will focus on electronic goods, household
electrical appliances, clothing, hats, shoes, children products and car
accessories for sampling for quality. This is consistent with the Law on
Protection of the Rights and Interests of Consumers which also placed more
emphasis on these goods due to their popularity on online sales platforms.
Online
sales platforms
·
The SAIC will increase its efforts against online
retailers and businesses which sell unsatisfactory products. Such
retailers and businesses will be ordered to cease sales and to remove product
information which does not comply with the law.
·
Where the breaches threaten to cause harm to persons
or property and do not comply with standards, the SAIC will also request online
platform providers to remove the relevant product or store from the
platform. The platform provider must also cease providing services to the
relevant retailers and businesses.
·
Online suppliers must establish systems to compensate
consumers and actively mediate disputes.
·
The SAIC also encourages the setting up of dispute
resolution mechanisms for cross-border online transactions.
Other
enforcement actions
·
The SAIC will strictly investigate and deal with
misleading advertisements, trade mark infringement, illegal promotions, false
credentials and false online ratings. The SAIC will also look into
illegal behaviour in the areas of returns and warranty and protection of
consumers’ personal data.
·
Emerging areas such as informational services, smart
home services, services for elders and health services will also be
monitored. The SAIC will monitor for acts which breach consumers’ rights
whilst allowing for room for innovation from providers.
Official
online complaint platform
·
The Opinion stated that the SAIC’s official online
complaint platform will be set up speedily. The complaint platform will
allow consumers to lodge online and follow up on the complaints online.
·
The complaint platform will run alongside the existing
phone complaint system.
Additional
deterrence measures
·
The results from sampling of online goods will be
released to the public by the SAIC.
·
Suppliers who receive administrative punishment three
or more times within two years will be placed on a blacklist.
·
The SAIC will utilise social media channels like
WeChat and Weibo to educate the public on consumer protection laws.
The Opinion is a sign that the SAIC is determined to
keep up with developing consumer trends. Recent laws (also see our recent
article on Implementing Regulations on the Protection of the Rights and
Interests of Consumers) and the Opinion place emphasis on protection of
consumers rights online. All e-commerce sellers and platform operators
must familiarise themselves with these new enforcement initiatives – whether
they are selling traditional popular commodities such as electronics and
clothing or emerging informational and smart home services.
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