China: Internet News Information Service Industry Reshuffle?

Last Updated: 26 May 2017
Article by Han Kun Law Offices

On May 2, 2017, the Cyberspace Administration of Chinapromulgated the Administrative Provisions for Internet News Information Services("Provisions"), which will come into effect on June 1, 2017 and replace the existing Regulations for the Administration of Internet News Information Services("Regulations") which was promulgated in 2005.

The Provisions preserve a part of the Regulations, while making significant changes with respect to both structure and content.  This article will provide a brief analysis of the Provisions, primarily with respect to businesses subject to licensing requirements, entry requirements and the relevant responsibilities of license subjects. 

Businesses required to obtain an Internet News Information Service License

The core requirements of the Provisions are identical to those of the Regulations, which are that operators engaging in Internet news information services must obtain an Internet News Information Service License, and be subject to the supervision and management of the Cyberspace Administration of China.

Compared to with the Regulations, the Provisions more clearly define Internet news information services, mainly from the following three aspects:

  1. Content: The Provisions clearly explain that "news information" refers to reports and commentary related to political, economic, military, diplomatic and other social and public affairs and reports on social emergencies (which means that general sports, culture, science and technology news and news of a commercial nature would not be regarded as "news information" under the Provisions);
  2. Communication channels: The Provisions clearly provide that news information services are provided to the public through channels based on the technology and developments of the times, including Internet sites, apps, forums, blogs, micro-blogs, public accounts, instant messaging tools and network-based broadcasts; and
  3. Form of services: Depending on the service provider's specific work, the Provisions further classify Internet news information services into three categories: Internet news information editing and publishing services, Internet news information reposting services and Internet news information dissemination platform services.

Based on the definitions and understandings above, operators who engages in Internet news information editing and publishing services, reposting services or dissemination platform services such as Weibo, WeChat and network-based broadcasting platforms are required to obtain an Internet NewsInformation Service License in accordance with the Provisions, although the existing Regulations would not currently require obtaining a license.  Based upon our past experience, it would be quite difficult for some small service providers to obtain an Internet News Information Service License, if they have not yet done so.  Failure to obtain a license could result in an order to cease operating.    

Qualifications for Obtaining an Internet News Information Service License

With respect to the entry of foreign capital, the Provisions preserve the rules found in the Regulations which provide that an Internet news information service entity cannot be established in the form of a Sino-foreign joint venture, a Sino-foreign cooperative venture or a wholly foreign-invested enterprise. Where an Internet news information service entity intends to cooperate with a Sino-foreign joint venture, Sino-foreign cooperative venture or wholly foreign-invested enterprise, the entity should report to the competent authorities for a security assessment. In addition, the Provisions also require the person in charge and the editor-in-chief of Internet news information service entities to be PRC citizens. It is worth noting that the Provisions for the first time require Internet news information service providers to separate editing services from other business operations and clearly provide that non-public capital cannot be used to operate Internet news information editing services. Besides this, the Provisions also set forth that only news entities (including its controlled entities) or entities controlled by the news and publicity department are eligible to apply for an Internet News Information Editing and Publishing Service License. To some extent, these provisions reflect the government's strengthened management of the Internet news editing business and of the content of news information.

The Regulations have clear requirements regarding registered capital and the number of employees for applicants of the Internet News Information Service License. For example, Internet news information service units established by non-news entities must have registered capital of no less than RMB 10 million and more than 10 full-time news editors. The Provisions delete such requirements and only generally require that applicants should have the premises, facilities and funds, full-time news editors, content reviewers and technical security personnel appropriate for the services, and should establish sound Internet news information service management systems, information security management systems and technical support measures. Based upon our experience, these general requirements are not easy to apply, and the authorities are very likely to put forward specific requirements in practice. In the short term, it is quite likely that the authorities will review applications according to requirements provided in the Regulations in the absence of enforcement rules for the Provisions that may be promulgated.

In addition, similar to the Administrative Provisions on Internet Publishing Services, the Provisions also further require qualified Internet news information service providers to implement a special management share system, and specific implementing rules will be separately developed by the Cyberspace Administration of China.  The following issues require special attention with respect to the special management share system:

  1. Will the special management share system only apply to news editing and publishing service providers or will it apply to all three categories of service providers (i.e., news editing and publishing service providers, news reposting service providers and dissemination platform service providers)?
  2. Is there a minimum limit for the shareholding ratio for state-owned special management entities (for example, at least 1%)? How will control rights of the state-owned special management entities be ensured (whether the state-owned investor will have a seat on the board of directors or whether the investor will have veto rights with respect to news content)?

There is no doubt that the special management share system, if implemented, will have a significant impact on the financing and listing of Chinese companies that use a VIE structure or on Chinese companies that intend to be listed overseas.

Responsibilities of Internet news information service providers

The Provisions classify Internet news information services into Internet news information editing and publishing services, reposting services and dissemination platform services. In addition to the general requirements applicable to all Internet news information service providers regarding editor and practitioner management, information security management, content dissemination management and the treatment of illegal information, the Provisions also provide certain special requirements related to the three categories of service providers mentioned above:

  1. The Provisions provide that entities engaging Internet news information editing and publishing services should be a news entity (including its controlled units) or a unit
  1. controlled by the news and publicity department, which refers to news organizations in the conventional sense.
  2. The Provisions require that providers of news reposting services should repost news published by central news entities or their direct local subordinates and should indicate the news source, the original author, the original title and the editor's real name. Providers must not distort or tamper with the meaning of the original title or the news content, and should ensure that the news information can be traced to its source.
  3. The Provisions requires Internet news information platform service providers to require users to provide real identity information and cannot seek improper benefits by editing, publishing, reposting or deleting news information, or through interfering in the presentation of news information or search results. Providers should also sign agreements with registered users and audit the users' public accounts with respect to account information, service qualifications and service scope and file the same with the competent authorities based upon the category of the user.

To view the full report please click here.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Emails

From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.