Summary of Key Points
The e-commerce law, which has been in effect for over seven years, has undergone its first comprehensive revision. This amendment primarily targets new business models such as live-streaming commerce and cross-border e-commerce to address regulatory gaps. It focuses on protecting the rights of newly employed workers, including delivery riders, and enhances enforcement measures (e.g., increasing fines and introducing penalties like temporary business suspensions). It also includes provisions for countermeasures against discriminatory practices by foreign entities. The ultimate goal is to shift the platform economy from a focus on competitive pricing to one that emphasizes quality and innovation.
Detailed Analysis
1. Delivery Riders Are No Longer “Invisible”: The Law Provides Protection
The previous e-commerce law mainly regulated platforms and merchants, leaving new types of workers, such as delivery riders and ride-hailing drivers, outside the scope of protection. This revision includes them:
- Protected Rights: Platforms are required to legally protect the rights and interests of these workers, preventing unfair practices like arbitrary fee deductions and failure to provide social insurance.
- Involvement in Governance: Workers are now included in market governance processes, providing valuable insights to regulatory authorities (e.g., whether platforms force riders to deliver beyond scheduled times), making regulation more effective.
In simple terms, if delivery riders experience unfair treatment by a platform, they have a legal basis to seek redress and no longer face an impasse in filing complaints.
2. Live-Streaming Commerce and Cross-Border E-commerce Must Comply with Regulations
The original law primarily applied to traditional brick-and-mortar retailers like Taobao and JD.com; new models like live-streaming sales and cross-border trade were largely unregulated. This revision closes these loopholes:
- Responsibility for Live-Streaming Platforms: If a platform controls the ordering process (e.g., a TikTok account hosting its own shopping mall), it is held accountable even if it does not directly operate physical stores (for instance, if fake products are sold, the platform can be fined).
- Regulation for Cross-Border E-commerce: Chinese law can address issues when foreign platforms disrupt the domestic market (e.g., by selling substandard goods). The government will also assist Chinese merchants in resolving disputes abroad.
For example, if you buy a fake product through a live stream, you could previously only seek recourse from the influencer; now, the platform is also responsible and cannot escape liability.
3. Enhanced Enforcement Measures with Higher Costs for Violations
Regulatory authorities no longer have limited options, such as fines of up to 2 million yuan or business suspensions. New measures include:
- Temporary Suspension of Services: Platforms that sell fake products may be prohibited from attracting new merchants or temporarily shut down related services (e.g., live-streaming sales).
- Increased Fines: The maximum fine has been raised from 2 million yuan to 5 million yuan, and fines can be based on a percentage of the platform’s annual revenue (e.g., if a platform earns 1 billion yuan, it could face a fine of up to 500 million yuan).
Experts note that it is not yet clear whether fines are calculated per transaction or as a percentage of total sales, leaving some discretion for authorities. It is suggested that fines be based on the number of violations to make the cost of non-compliance more evident to platforms.
4. Support for Chinese E-commerce Going Global and Countermeasures Against Foreign Discrimination
The revision includes several provisions to support Chinese e-commerce:
- Counter-Discrimination: If a foreign country discriminates against Chinese e-commerce (e.g., by preventing Chinese merchants from entering its market), China can retaliate in kind (e.g., by restricting that country’s platforms from operating in China).
- Regulation of Overseas Platforms: Chinese law can address issues when overseas platforms harm Chinese consumers or merchants (e.g., by arbitrarily closing Chinese stores).
- Blacklisting Unreliable Entities: Foreign entities that violate regulations and harm Chinese businesses can be listed and restricted from conducting business in China.
For example, if a foreign government prevents Chinese cross-border e-commerce from operating in its country, China can restrict that platform from operating in China in return.
5. Shifting the Platform Economy from Price Competition to Quality Focus
The revision aims to shift platforms away from competitive pricing and towards innovation and quality:
- Legislative Guidance: The law encourages a shift from a focus on traffic generation to innovation-driven growth and from price competition to quality improvement.
- How to Achieve This?: Experts emphasize that legal changes alone are not enough; strict enforcement is necessary. For instance, platforms that fail to properly vet products and sell substandard goods should face severe penalties, allowing high-quality merchants to thrive and consumers to purchase reliable products.
In the past, platforms might allow merchants to sell counterfeit goods to attract customers at lower prices; under the new law, such practices would result in significant fines, discouraging such behavior.
Conclusion
This revision of the e-commerce law is designed to adapt to new e-commerce trends, protect more people’s rights, and strengthen regulatory oversight. It also provides support for Chinese e-commerce companies expanding internationally. The ultimate goal is a healthier platform economy that relies on innovation and quality rather than aggressive pricing strategies. As a result, consumers will have greater protection when shopping online or ordering food delivery, and merchants will operate in a more equitable environment.