(1) Further Standardizing the Regulation of Online Live Marketing
With the vigorous development of the online live-streaming industry in China, China increasingly attaches importance to the rule of law and standardized guidance in this field. To this end, the State Administration for Market Regulation (the "SAMR") has issued the Guiding Opinions on Strengthening the Regulation of Online Live-streaming Marketing Activities (Draft for Comment), the China Advertising Association has formulated the Code of Conduct for Online Live-streaming Marketing, and the Media Shopping Committee of China Business Confederation has drafted and formulated the Group Standards for the Live Shopping Industry: the Basic Code of Operation and Service for Live Video Shopping (Draft for Comment), to help the online live-streaming marketing industry operate legally and standardizing. Meanwhile, in the process of further standardizing the supervision, the industry associations also punish some broadcasters in violation of the laws and regulations and self-discipline rules.
Ø Guiding Opinions on Strengthening the Regulation of Online Live-streaming Marketing Activities (Draft for Comment) (the "Guiding Opinions (draft)")
On July 29, 2020, the SAMR promulgated the Guiding Opinions (draft). The Guiding Opinions (draft) mainly regulate online live-streaming marketing from three aspects, namely, clarifying relevant players' legal liabilities, strictly regulating online live-streaming marketing behaviors, and investigating and punishing illegal online live-streaming marketing behaviors in accordance with the law. The specific contents are as follows:
Main Points Principal aspect | Relevant Contents Relevant Content |
Online platform operator | Online platform operators providing online business premises, transaction matching, information dissemination services etc, and providing live-streaming technical services for business operators, which sell commodities or provide services or promote commodities or services through online live-streaming, shall perform the responsibilities and obligations of E-commerce platform operators pursuant to the provisions of the E-commerce Law. |
Participation of Online Platforms in Advertising and Promotion | Where an online platform operator advertises and promotes online live-streaming marketing activities, it shall perform the responsibilities and obligations of advertisement publishers or advertising operators in accordance with the Advertising Law. |
Commodity Seller | Those who sell goods or provide services through online live-streaming shall perform corresponding duties and obligations in accordance with relevant laws. |
Online Anchors | If the conduct of online anchors constitutes a commercial advertisement, the responsibilities and obligations of the advertisement publisher, advertisement operator or advertisement endorser shall be performed by online anchors in accordance with the Advertising Law. |
Marketing of Goods or Services | Establish and implement the inspection and acceptance system for incoming goods, and check relevant supporting documents in accordance with laws. Online live-streaming shall not be allowed to sell goods or services prohibited by laws and regulations from production and sales; online live-streaming shall not be allowed to sell tobacco products and other goods or services prohibited by laws and regulations from commercial marketing and promotion; online live-streaming shall not be allowed to sell specific full-nutrition formula food and other goods or services prohibited by laws, regulations and rules from online transactions. |
Advertisement Review and Release | Advertisements shall be published in accordance with the advertisement review provisions, and shall not be published without being reviewed; no advertisement of medical treatment or drug, which shall be reviewed before publication as required by laws and regulations, shall be published in the form of online live broadcast. |
Advertising Endorsement | It is prohibited to carry out advertising endorsement activities in online live-streaming marketing activities by using minors under the age of 10, or entrusting natural persons, legal persons or other organizations that have been imposed administrative penalties for making recommendations or certifications in false advertisements within last three years. |
Electronic Commerce | Primarily investigate and punish illegal behaviors such as fictitious transactions, deletion or fabrication of user comments without authorization, failure to take necessary measures against operators on the platforms who infringe legitimate rights and interests of consumers, failure to fulfill the obligation of qualification examination, failure to fulfill the obligation to guarantee personal and property safety of consumers, etc. |
Infringement on the Legitimate Rights and Interests of Consumers | Focus on investigating and punishing illegal activities of consumers such as request for repair, redo, replacement, return of goods, make-up for quantity shortage, refund of payment for goods and services, or compensation for losses, and intentional delay or refusal without reason. |
Unfair competition | Focus on investigating and punishing illegal activities such as implementation of false or misleading commercial publicity activities, assisting other operators to conduct false or misleading commercial publicity activities, business confusion, commercial defamation and improper prize-attached sales, etc. |
Quality of the Products | Focus on investigating and punishing illegal activities such as adulterating, passing fake imitations for genuine, selling seconds at best quality prices, passing substandard products off as standard ones, falsifying the place of origin of products, forging or falsely using the factory names and addresses of others, selling "three non-products" and infringing others' intellectual property rights. |
Food Safety | Stress shall be laid on investigating and punishing such illegal activities as selling food without operation permit, selling food not in compliance with the safety standards and selling food with false production date or exceeding the quality guarantee period. |
Illegal Advertising | Focus on investigating and punishing such illegal activities as issuing false advertisement deceiving or misleading consumers, issuing illegal advertisement violating good social morals and advertisement endorsement in violation of regulations. |
Price Violation | Focus on investigating and punishing illegal activities such as fabricating or spreading price increase information and inveigling consumers into transactions by false or misleading price information. |
Ø Code of Conduct for Online Live-streaming Marketing (the "Code of OLM")
On June 24, 2020, the China Advertising Association ("CAA") formulated Code of OLM. The Code focuses on providing a guide to the conduct of various market players engaged in online live-streaming marketing activities. Non-live video marketing that falls under the scope of advertising activities shall comply with the provisions of the Advertising Law; other marketing activities shall be regulated with reference to these specifications. The Code of OLM applies to online live-streaming marketing activities in which business operators, broadcasters and other participants sell goods to or provide services for users in the form of live streaming on e-commerce platforms, content platforms, social networking platforms and other network platforms.
Ø Basic Specifications for Operation and Services of Live Video Shopping (Draft for Comment) (the "Specifications (Draft)")
On May 18, 2020, the China Business Federation Media Shopping Committee (the "CFTU") drafted and formulated the group standards for the live shopping industry — the Specifications (Draft). This draft mainly proposes the relevant administrative requirements concerning the quality of commodities, management of operators, live broadcasters, services of MCN institutions, outsourcing of logistics and etc.
Ø 48 Anchors Being Blacklisted by the Online Performances (Live Broadcast) Branch of China Performance Industry Association
On August 9, 2020, the China Performance Industry Association Online Performances (Live Broadcast) Branch blacklisted 48 anchors for engaging in activities in violation of the laws and regulations, and banned them from being registered and broadcasting live in the industry for five years. Therefore, the competent authorities have begun to gradually regulate online live-streaming activities.