On 25 October 2013, China’s Standing Committee of the
National People’s Congress of the People’s Republic of
passed an amendment to modernise the Law
on Protection of Consumer Rights and Interests (Consumer
Protection Law), the first overhaul since it’s adoption in
1993. The amended Consumer Protection Law will take effect from 15
March 2014 and will provide specific protection for consumer
privacy in China for the first time. The amendments reinforce the
Decision on Enhancing Internet Information Protection from December
2012. As a result, binding privacy protection obligations will now
extend to sellers of consumer goods as well as internet service
providers and telecommunication providers in the context of the
increasing popularity of e-commerce.
Under the amendments businesses will be required to:
Obtain explicit consumer consent to the collection and use of
their personal information
Expressly inform consumers of the purposes, method and scope
the use of their personal information
Keep all consumer information confidential
Are banned from selling, illegal providing or otherwise
disclosing consumer information to others
Put in place technical measures to adequately secure consumer
Take active steps to mitigate damage in the event of actual or
suspected unauthorised disclosure of consumer information
Obtain explicit consent prior to contacting consumers with
commercial or marketing information
It is anticipated the amended Consumer Protection Law will
greatly enhance consumer privacy rights and boost commerce in
China. Jia Dongming, director of the civil law working committee
under China’s Standing Committee commented
“Strengthening consumer confidence will benefit the whole
nation's economic development and boost domestic
However, critics believe any benefits are equally outweighed by
the costly burden this will place on businesses. Organisations will
have to sharpen their internal data management and appoint data
protection officers to ensure they keep step with the requirements
of the revised Consumer Protection Law. A failure to comply could
result in companies facing the increased penalty of 500,000 yuan, a
significantly greater deterrent than the previous fine of 10,000
yuan. Beyond the administrative expense, costs are likely to spiral
even further with the burden of proof shifting from the consumer to
businesses in the event of disputes. In such scenarios consumers
are likely to win out, bolstered by the support of China’s
Consumer’s Association which will now be able to initiate
class-action litigation on behalf of consumers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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With the increase in usage of technology in businesses, the ease of doing business has undoubtedly gone up, but this also presents certain concerns including the protection of personal information and data.
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