New regulation to protect consumers' rights in emerging ecommerce market

The bottom line of marketing requires individuals or companies engaged in livestreaming sales must inform consumers who are selling products and what goods are being sold, according to an official from China's top market regulator said on Tuesday.

Kuang Xu, head of the State Administration for Market Regulation's division for law enforcement and inspection, remarked during a briefing on introducing a regulation on how to implement the Consumer Rights Protection Law.

The State Council, the nation's cabinet released the regulation in March, which will go into effect on July 4. In a response to consumer concerns in the modern era, provisions on business operators' obligations, with specific and refined rule, including those on online consumption, livestreaming sales and personal information protection.

Kuang applauded the rapid growth of livestreaming sales, stating that the new pattern of marketing has helped stimulate and innovate consumption. However, he noted its relatively complicated business strategy, consumers now find it challenging to defend themselves when attempting to return items or report deceptive advertising.

According to data he disclosed showed that in the past five years, the market size of live-streaming sales increased by 10.5 times, however customer complaints have also increased by 47.1 times during the same period, which is significantly higher than traditional e-commerce.

To maintain the order of emerging businesses, the new regulation stipulates that those who sell goods or provide services through the internet, television or telephone must introduce their business content via the home page, video screen, voice call or catalog.

As per the regulation, the sales platforms must also disclose to consumers with the name, business address and contact information of good sellers.

"The provisions apply to livestreaming sales, which means those engaged in the business must tell consumers who sell goods and what goods are sold, in order to ensure the transparency of the business information," Kuang clarified.

Furthermore, the regulation mandates platforms that engage in live-streaming sales to establish working systems to help solve consumption-related issues and to notify users on who operates the streaming rooms and who is responsible for the live-streaming to consumers.

"The requirement is to standardize the business of live streaming sales by improving the management of platforms," Kuang continued.

At a briefing, Chen Yifang, an official from the Supreme People's Court, released at the briefing that a number of legal studies are being conducted by the top to better tackle new issues in consumption, so that consumers' legitimate rights and interests can be strongly protected, this move is to improve efficiency of carrying out the regulation.

"We're doing research on live-streaming sale, rewarding live-streaming hosts, online booking and personal information protection of consumers," said the chief judge of the SPC's No 1 Civil Adjudication Tribunal. "We're also accelerating the formulation of a judicial interpretation on handling punitive damage cases involving food and drug."

She added that the top court is also optimizing measures related to public-interest litigation regarding consumption, with more participation in relevant legislation.