China solicits opinions on social e-commerce regulation

BEIJING - China's Ministry of Commerce has published a regulation on social e-commerce on its website, soliciting public opinion by the end of July.

Social e-commerce, which emerged in 2013 in China, combines social media with e-commerce. E-commerce platforms Xiaohongshu and Pinduoduo are two examples.

Xiaohongshu users post their purchases and others who like the items can directly go to the product page by clicking tags. On Pinduoduo, users post the items they want to buy and invite others to cut the price by buying the same items or clicking on the posts.

According to the regulation, social e-commerce platforms and service providers shall be registered with industrial and commercial departments.

Social e-commerce operators who meet the requirements of industrial and commercial registration can be registered, while those who are not eligible for registration can only do business by registering on a social e-commerce platform using their name, address, valid identity information, and form of contact.

The regulation said social e-commerce operators, platforms, and service providers cannot disclose, falsify or damage users' personal information which they have collected, and cannot provide the information to others without the consent of users.

The regulation requires e-payment providers to be responsible for authenticating users' identities and ensuring that identity confirmation and payment authorization systems are safe and credible.

Consumers have the right to choose products and services they like and the right to refuse forced sales by social e-commerce operators. Consumers have the right to gain compensation from social e-commerce operators if they are physically harmed by the products and services they purchase, the regulation said.

The regulation called on social e-commerce operators, platforms, and service providers to establish online dispute settlement mechanisms.

Social e-commerce will reach 1.14 trillion yuan ($170 billion) in 2018, with a year-on-year increase of 66.7 percent, according to a report released at the 2018 China Internet Conference earlier this month.