Measures for the Supervision and Administration of Online Transactions

Release Date: 03-15-2021

Source: State Administration for Marketing Regulation website

Chinese Title: 网络交易监督管理办法

Decree No. 37 of the State Administration for Market Regulation

(Promulgated under Decree No. 37 of the State Administration for Market Regulation on March 15, 2021)

Chapter I General Provisions

Article 1 These Measures are enacted in accordance with the relevant laws and administrative regulations for the purposes of regulating online transactions, maintaining the order of online transactions, safeguarding the legitimate rights and interests of all parties to online transactions and promoting the sustainable and sound development of digital economy.

Article 2 These Measures shall apply to the business activities of selling goods or providing services through information networks such as the internet (hereinafter referred to as “online”) within the territory of the People’s Republic of China as well as the supervision and administration thereof by the administrations for market regulation.These Measures shall apply to the business activities of selling goods or providing services in information network activities such as online social networking and online live streaming.

Article 3 When engaging in business activities, online transaction operators shall follow the principles of voluntariness, equality, fairness and good faith, comply with laws, regulations, rules and business ethics, public order and good morals, participate in market competition fairly, earnestly perform statutory obligations, actively assume subject responsibilities and accept supervision from all sectors of the society.

Article 4 For the supervision and administration of online transactions, it is imperative to adhere to the principles of encouraging innovation, being tolerant and prudent, strictly observing the bottom line and conducting online and offline integrated regulation.

Article 5 The State Administration for Market Regulation is responsible for organizing and guiding the supervision and administration of online transactions nationwide.Local administrations for market regulation at or above the county level are responsible for the supervision and administration of online transactions within their respective administrative regions.

Article 6 Administrations for market regulation shall guide online transaction operators, online transaction trade organizations, consumer organizations and consumers to jointly participate in the governance of the online transaction market, promote and improve the system for the governance of the online transaction market featuring diversified participation, effective collaboration, standardization and orderliness.

Chapter II Online transaction operators

Section 1 General Provisions

Article 7 For the purpose of these Measures, the term “online transaction operators” refers to natural persons, legal persons and unincorporated organizations that organize and carry out online transaction activities, including online transactiononline transaction platform operators, operators on platforms, operators of self-built websites and online transaction operators that carry out online transaction activities through other online services.For the purpose of these Measures, the term “online transaction platform operators” refers to legal persons or unincorporated organizations that provide online business premises, transaction matchmaking, information release and other services for both or more parties involved in online transaction activities in order to facilitate both or more parties involved in online transaction activities to independently carry out online transaction activities.

For the purpose of these Measures, the term “operators on platforms” refers to online transaction operators that carry out online transaction activities through online transaction platforms.

Social networking, live streaming and other online service providers that provide online business premises, product browsing, order generation, online payment and other online transaction platform services for operators shall perform the obligations of online transaction platform operators in accordance with the law. Operators that carry out online transaction activities through the aforesaid online transaction platform services shall perform the obligations of operators on platforms in accordance with the law.

Article 8 Online transaction operators shall not violate the laws, regulations or the provisions of the State Council’s decisions to carry out unlicensed business operations. Online transaction operators shall go through the registration formalities for market subjects in accordance with the law, except for the circumstances under which registration is not required as specified in Article 10 of the E-Commerce Law of the People’s Republic of China.The individuals who engage in online cleaning, washing, sewing, hairdressing, house moving, preparing keys, pipe dredging, home appliance and furniture repair and replacement and other convenient services for the public that do not require a license in accordance with the law are not required to make registration in accordance with the provisions of Article 10 of the E-Commerce Law of the People’s Republic of China.

The individuals who engage in online transaction activities with an accumulated annual transaction amount not exceeding 100,000 yuan are not required to make registration in accordance with the provisions of Article 10 of the E-Commerce Law of the People’s Republic of China. If a business operator opens multiple online stores on the same platform or different platforms, the transaction amounts of the online stores shall be calculated on a consolidated basis. For the individuals that engage in petty sporadic transactions subject to an administrative license in accordance with the law, t the registration formalities for market subjects shall be completed in accordance with the law.

Article 9 Where a business operator on a platform that only carries out online business activities applies for registration as an individual business, its online business premises may be registered as its business premises and its habitual residence as its domicile, and the administration for market regulation of the county, autonomous county, city not divided into districts or municipal district where its domicile is located shall be the registration authority. If a business operator has two or more online business premises, such business premises shall be registered together.

Article 10 Where a business operator on a platform applies for registering its online business premise as the business premise, the online transaction platform on which the business operator settles shall issue to the business operator relevant materials of the online business premises that meet the requirements of the registration authority.

Article 11 The goods sold or services provided by online transaction operators shall meet the requirements for the protection of personal and property safety and the requirements for environmental protection, and online transaction operators shall not sell goods or provide services that are prohibited by law or administrative regulations, damage the national interest and public interest, or violate public order and good morals.

Article 12 Online transaction operators shall continuously publicize their subject information or the hyperlinks to such information on the homepage of their websites or at an eye-catching place of the homepage for business activities. They are encouraged to publicize their business license information by linking to the electronic business license licensing system of the State Administration for Market Regulation.Online transaction operators that have gone through the registration formalities for market subjects shall faithfully publicize the following information of their business licenses and administrative licenses relating to their business operations, or the hyperlinks to such information:

(I) An enterprise shall publicize its unified social credit code, name, type of enterprise, legal representative (person-in-charge), domicile, registered capital (capital contribution) and other information specified in its business license;

(II) An individual business shall publicize the unified social credit code, name, business operator’s name, business premises and organizational form and other information specified in its business license; and

(III) A specialized farmers’ cooperative or an associate farmers’ cooperative shall publicize the unified social credit code, name, legal representative, domicile, total amount of capital contribution, and other information specified in its business license.

Business operators that are not required to be registered in accordance with Article 10 of the E-commerce Law of the People’s Republic of China shall, based on the types of their own business activities, faithfully publicize the following self-declaration as well as their actual business address, contact information and other information or the hyperlinks to such information:

(I) “Individuals selling self-produced agricultural and sideline products are not required to go through the registration formalities for market subjects in accordance with the law”;

(II) “Individuals selling household handicrafts are not required to go through the registration formalities for market subjects in accordance with the law”;

(III) “Individuals using their own skills to engage in labor activities for the convenience of the people for which no license is required in accordance with the law, and are not required to go through the registration formalities for market subjects in accordance with the law”; and

(IV) “Individuals engaging in sporadic small-amount transactions are not required to go through the registration formalities for market subjects in accordance with the law”.

In case of any change to the information publicized by an online transaction operator, the update and publication shall be completed within ten working days.

Article 13 Online transaction operators shall collect and use the personal information of consumers by following the principles of legitimacy, rightfulness and necessity, expressly state the purposes, methods and scope of information collection and use, and obtain the consent of consumers. Online transaction operators collecting and using the personal information of consumers shall publicize their rules for collection and use and shall not collect and use information in violation of the provisions of laws and regulations and the agreements between the parties.Online transaction operators shall not force customers or force them in a disguised form to consent to the collection and use of information not directly related to their business activities by means of one-off general authorization, tacit authorization, bundling with other authorizations, or the suspension of installation and use. Collection and use of sensitive information such as personal biological characteristics, medical health, financial accounts and personal whereabouts shall be subject to the consent of consumers on an item-by-item basis.

Online transaction operators and their employees shall strictly keep confidential the personal information they have collected, and shall not provide such information to any third party including the related parties without the authorization and consent of the persons whose information is collected, except for assistance in supervision and law enforcement activities in accordance with the law.

Article 14 Online transaction operators shall not, in violation of the Anti-unfair Competition Law of the People’s Republic of China and other provisions, carry out unfair competition activities that disrupt the market competition order and infringe upon the legitimate rights and interests of other operators or consumers.Online transaction operators shall not conduct false or misleading commercial promotions to deceive or mislead consumers in any of the following ways:

(I) Fabricating transactions and user comments;

(II) Adopting misleading display or other means to put favorable comments in the front or negative comments at the back, or failing to significantly distinguish comments for different goods or services;

(III) Carrying out false marketing by means of falsely claiming the spot goods, fictitious booking or false panic purchase, etc.; or

(IV) Fabricating traffic data such as hits and followers, as well as fictitious transaction interaction data such as likes and rewards.

Online transaction operators shall not perform confusing acts that may lead people to mistake their goods or services for those goods or services of others or certain relations exist between such goods or services and others.

Online transaction operators shall not fabricate or disseminate false or misleading information to harm the credit standing of competitors or the reputation of competitors’ goods.

Article 15 Where the consumer comments contain information whose publication or transmission is prohibited by laws, administrative regulations and rules, Online transaction operators may conduct technical treatment in accordance with the law.

Article 16 Online transaction operators shall not send commercial information to consumers without their consent or request.When sending commercial information, Online transaction operators shall clearly indicate their real identity and contact information, and shall provide consumers with a noticeable, convenient and free way for refusing to continue receiving such information. If consumers clearly refuse to send such information, they shall immediately stop sending such information, and shall not send the information again after changing the name.

Article 17 Where Online transaction operators bundle goods or services to consumers by means of direct bundling or provision of multiple options, they shall remind consumers in a noticeable way. Where multiple options are provided, Online transaction operators shall not set any option of the bundled goods or services as the default consent of consumers, and shall not set the option selected by consumers in previous transactions as the default choice of consumers in subsequent independent transactions.

Article 18 Where an online transaction operator provides services by means of automatic extension or automatic renewal of fees, it shall, prior to the acceptance of services by consumers and five days prior to the date of automatic extension or automatic renewal of fees, remind consumers of the same in a noticeable manner and allow consumers to make their own choices. During the service period, the online transaction operator shall provide consumers with an obvious and convenient option to cancel or change the same at any time and shall not charge any unreasonable fees.

Article 19 Online transaction operators shall fully, truthfully, accurately and timely disclose the information of goods or services to protect consumers’ right to know and right to choose.

Article 20 Online transaction operators that carry out online transaction activities through online social networking, online live-streaming and other online services shall display the information on goods or services as well as their actual business entities and after-sale services in a noticeable way, or hyperlinks to the above information.Online transaction service providers shall keep the live video of online transaction activities for no less than three years from the date of completion of live streaming.

Article 21 Where online transaction operators use standard terms, notices and statements to consumers when providing goods or services, they shall remind consumers in a noticeable way of the contents that consumers need to pay special attention and the contents that have a significant interest with the consumers, explain the same as required by the consumers, and shall not make provisions containing the following contents:

(I) Exempting or partially exempting Online transaction operators from such responsibilities as repair, remanufacturing, replacement, return of goods, make-up for quantity shortage, refund of payment for goods and services, and compensation for losses, etc. for the goods or services provided by them;

(II) Exempting or restricting the rights of consumers to request repair, replacement, return of goods and compensation for losses, and to obtain liquidated damages and other reasonable compensations;

(III) Exempting or restricting the rights of consumers to lodge complaints, report, request for mediation, apply for arbitration or file lawsuits in accordance with the law;

(IV) Exempting or restricting the rights of consumers to modify or rescind contracts in accordance with the law;

(V) Prescribing the unilateral right of interpretation or final interpretation enjoyed by operators of online transactions; or

(VI) Other provisions that are unfair and unreasonable to consumers.

Article 22 Online transaction operators shall, in accordance with the requirements of the State Administration for Market Regulation and its authorized administrations for market regulation at the provincial level, provide data and information such as prices, sales volumes and sales volumes of goods or services in specific periods, specific categories and specific regions.

Article 23 Where an online transaction operator terminates its online transaction activities by itself, it shall continuously publicize the announcement on terminating online transaction activities and other relevant information at a conspicuous place of the homepage of its website or the homepage for conducting business activities 30 days in advance and take reasonable, necessary and timely measures to protect the legitimate rights and interests of consumers and relevant operators.

Section 2 Online Transaction Platform Operators

Article 24 Online transaction platform operators shall require business operators that apply for selling goods or providing services on their platforms to provide authentic information such as identity, address, contact information and administrative license, verify and register such information, establish registration files and verify and update such information at least once every six months.Online transaction platform operators shall dynamically monitor the business operators within their platforms that have not handled market entity registration, and shall timely remind those business operators whose market entity registration exceeds the limit prescribed in Paragraph 3 of Article 8 of these Measures to handle market entity registration in accordance with the law.

Article 25 Online transaction platform operators shall submit relevant information to administrations for market regulation in accordance with the provisions of laws and administrative regulations.Online transaction platform operators shall, in January and July each year, submit the following identity information of business operators using their platforms to the administrations for market regulation at the provincial level of the places where they are located:

(I) The names, unified social credit codes, actual business addresses, contact information, online store names and website links of the business operators using their platforms that have handled market entity registration;

(II) The information such as the names, identity document numbers, actual business addresses, contact information, online store names and website links of the business operators using their platforms that have not handled market entity registration, and self-declaration that they are not required by law to handle market entity registration; in particular, business operators using their platforms whose market entity registration exceeds the limit prescribed in Paragraph 3 of Article 8 of these Measures shall be specially marked.

Online transaction platform operators and administrations for market regulation are encouraged to establish automatic information reporting mechanisms in the forms of open data interfaces.

Article 26 Online transaction platform operators shall provide technical support to business operators using their platforms for their performance of information disclosure obligations in accordance with the law. If there is any change to the information disclosed by business operators using their platforms, such change shall be reported to the platforms within three working days, and the platforms shall verify the change and complete the disclosure of updates within seven working days.

Article 27 Online transaction platform operators shall distinguish and mark the business operators that have handled market entity registration from those that have not handled market entity registration in an eye-catching manner to ensure that consumers can clearly identify such business operators.

Article 28 Where an online transaction platform operator modifies the platform service agreement and transaction rules, it shall completely keep all the previous versions of the platform service agreement and transaction rules in the past three years before the effective date of the modified version, and ensure that the business operators and consumers are able to read and download such agreement and rules conveniently and fully.

Article 29 Online transaction platform operators shall establish an inspection and monitoring system for the information of business operators using their platforms and the goods and services published by them. Where an online transaction platform operator finds that the information of goods and services on its platforms violates laws, regulations and rules on market supervision and administration, damages national and public interests, or goes against public order and good morals, it shall take necessary disposal measures in accordance with the law, keep relevant records, and report the same to the administration for market regulation at or above the county level at the place where the platform is located.

Article 30 Where an online transaction platform operator takes disposal measures such as giving a warning, suspending or terminating services against the illegal acts of business operators using its platforms in accordance with laws, regulations and rules, or the platform service agreement and transaction rules, it shall make public such measures within one working day from the date when it decides to take disposal measures, specifying the name of the online shop of the business operator using its platforms, the illegal acts and disposal measures. The relevant information of short-term disposal measures such as warning and service suspension shall be publicized continuously until the expiry of the implementation period of such disposal measures.

Article 31 An online transaction platform operator shall keep the identity information of business operators using its platforms for no less than three years from the date of its exit from the platform; and the information of goods and services, payment records, logistics and express delivery, return and exchange of goods and after-sales shall be kept for no less than three years from the date of completion of the transactions. Where it is otherwise provided for in laws and administrative regulations, such provisions shall prevail.

Article 32 An online transaction platform operator shall not, in violation of the provisions of Article 35 of the E-commerce Law of the People’s Republic of China, impose unreasonable restrictions or unreasonable conditions on the transactions of the business operators using its platforms carried out by business operators using its platforms, the transaction prices and transactions with other business operators, or interfere with the independent business operations of business operators using its platforms. To be specific, the regulations include:

(I) prohibiting or restricting business operators using its platforms from carrying out business activities on multiple platforms at their own discretion or only allowing them to carry out business activities on specific platforms by searching for lowering the market price, removing goods from shelving, restricting operations, shielding stores, raising service charges or otherwise;

(II) prohibiting or restricting business operators using its platforms from independently choosing transaction auxiliary service providers such as express logistics; and

(III) other acts of interfering with independent business operations of business operators using its platforms.

Chapter III Supervision and Administration

Article 33 Local administration for market regulation at or above the county level shall strengthen coordination and cooperation in their daily administration and law enforcement activities.The administration for market regulation at the provincial level of the place where an online transaction platform operator is located shall, as required by work, promptly share the identity information of the business operators using its platform with the administration for market regulation at the provincial level of the place where it actually operates.

Article 34 When carrying out regulation and law enforcement activities such as supervision and inspection, case investigation, accident disposal, recall of defective consumer goods and handling of consumption disputes, the administration for market regulation may require the online transaction platform operator to provide relevant transaction information such as the identity information of the business operators using its platforms, information of goods or services, payment records, logistics and express delivery, return and exchange of goods and after-sale, etc. The online transaction platform operator shall provide the aforesaid information and shall actively cooperate with the administration for market regulation in the monitoring of illegal online transaction activities.Business operators providing online transaction operators with publicity and promotion, payment and settlement, logistics and delivery, network access, server hosting, virtual hosts, cloud services, website and web design services, etc. (hereinafter referred to as “other service providers”) shall promptly assist the administrations for market regulation in investigating and punishing illegal online transaction activities pursuant to the law and provide the relevant data and information held by them. Where it is otherwise provided for in laws and administrative regulations, such provisions shall prevail.

Where the administration for market regulation discover illegal activities of Online transaction operators and require online transaction platform operators and other service providers to take measures to stop such activities pursuant to the law, the online transaction platform operators and other service providers shall cooperate.

Article 35 The administration for market regulation may adopt the following measures pursuant to the law when investigating and punishing illegal online transaction activities:

(I) conducting on-site inspection of premises relating to suspected illegal online transaction activities;

(II) consulting and copying contracts, notes, account books and other relevant materials relating to suspected illegal online transaction activities;

(III) collecting, retrieving and copying electronic data relating to suspected illegal online transaction activities;

(IV) inquiring the parties suspected of engaging in illegal online transaction activities;

(V) investigating and obtaining information from natural persons, legal persons and unincorporated organizations relating to suspected illegal online transaction activities; and

(VI) taking other measures as stipulated by laws and regulations.Where the adoption of the measures stipulated in the preceding paragraph is subject to approval pursuant to the law, the approval formalities shall be completed.

Technical monitoring records and materials of the administrations for market regulation on illegal online transaction activities may be used as electronic data evidence for imposing administrative penalties or adopting administrative measures.

Article 36 The administrations for market regulation shall adopt the requisite measures to protect the security of data and information provided by Online transaction operators, and keep strict confidentiality of personal information, privacy and commercial secrets therein.

Article 37 The administration for market regulation shall implement credit regulation of Online transaction operators pursuant to the law, and collect and announce information such as registration, filing, administrative licensing, random inspection results, administrative punishment, list of Online transaction operators with abnormal operations and list of enterprises with serious illegal and dishonest acts through the national enterprise credit information announcement system on a unified basis. Joint punishment shall be implemented pursuant to the law for serious illegal and dishonest acts.The information stipulated in the preceding paragraph may also be announced through channels such as the official website of the administration for market regulation, online search engines and prominent positions on the homepage for business activities of the business operators.

Article 38 Where an online transaction operator fails to perform its statutory responsibilities and obligations pursuant to the law, and disrupts or may disrupt the order of online transaction and affects the legitimate rights and interests of consumers, the administration for market regulation may, pursuant to their duties, interview the legal representative or main person-in-charge of the online transaction operator, and require the legal representative or main person-in-charge of the online transaction operator to adopt measures for correction.

Chapter IV Legal Liability

Article 39 Where there are provisions on punishment for illegal online transaction activities stipulated by laws and administrative regulations, such provisions shall prevail.

Article 40 Where an online transaction platform operator violates Article 10 of these Measures by refusing to issue materials relating to the online business premises to the business operators using its platform, the administration for market regulation shall order the business operator to make correction within a stipulated period; where the platform operator fails to make correction within the stipulated period, a fine ranging from 10,000 yuan to 30,000 yuan shall be imposed.

Article 41 Where an online transaction operator violates Article 11, 13, 16 or 18 of these Measures, and there are provisions in laws and administrative regulations, such provisions shall prevail; where there are no provisions in laws and administrative regulations, the administration for market regulation shall, according to their duties, order the business operator to make correction within a stipulated period, and may impose a fine ranging from 5,000 yuan to 30,000 yuan.

Article 42 Where an online transaction operator violates Article 12 or 23 of these Measures by failing to perform its statutory information disclosure obligation, it shall be punished in accordance with Article 76 of the E-commerce Law of the People’s Republic of China. The online transaction platform operator therein shall be punished in accordance with Paragraph 1 of Article 81 of the E-commerce Law of the People’s Republic of China.

Article 43 Where an online transaction operator violates Article 14 of these Measures, it shall be punished in accordance with the relevant provisions of the Anti-Unfair Competition Law of the People’s Republic of China.

Article 44 Where an online transaction operator violates Article 17 of these Measures, it shall be punished in accordance with Article 77 of the E-commerce Law of the People’s Republic of China.

Article 45 Where an online transaction operator violates Article 20 of these Measures, and there are provisions in laws and administrative regulations, such provisions shall prevail; where there are no provisions in laws and administrative regulations, the administration for market regulation shall order the business operator to make correction within a stipulated period; where the business operator fails to make correction within the stipulated period, a fine of not more than 10,000 yuan shall be imposed.

Article 46 Where an online transaction operator violates Article 22 of these Measures, the administration for market regulation shall order the business operator to make correction within a stipulated period; where the business operator fails to make correction within the stipulated period, a fine ranging from 5,000 yuan to 30,000 yuan shall be imposed.

Article 47 Where an online transaction platform operator violates Paragraph 1 of Article 24, Paragraph 2 of Article 25 and Article 31 of these Measures and fails to perform the statutory obligations of verification and registration, reporting the relevant information and retaining the information on goods and services and transactions, it shall be punished in accordance with Article 80 of the E-commerce Law of the People’s Republic of China.

Article 48 Where an online transaction platform operator violates Article 27, 28 and 30 of these Measures, the administration for market regulation shall order the business operator to make correction within a stipulated period; where the business operator fails to make correction within the stipulated period, a fine ranging from 10,000 yuan to 30,000 yuan shall be imposed.

Article 49 Where an online transaction platform operator violates Article 29 of these Measures, and there are provisions in laws and administrative regulations, such provisions shall prevail; where there are no provisions in laws and administrative regulations, the administration for market regulation shall order the business operator to make correction within a stipulated period, and a fine ranging from 10,000 yuan to 30,000 yuan shall be imposed.

Article 50 Where an online transaction platform operator violates Article 32 of these Measures, it shall be punished in accordance with Article 82 of the E-commerce Law of the People’s Republic of China.

Article 51 Where an online transaction operator fails to perform its contractual obligations in selling goods or providing services when selling goods or providing services, or fails to perform its contractual obligations as agreed, or causes damage to others, it shall bear civil liability in accordance with the law.

Article 52 Where an online transaction platform operator knows or should have known that the goods sold or services provided by a business operator on a platform are not in compliance with the requirements for safeguarding personal and property safety, or have infringed upon the legitimate rights and interests of consumers, but it fails to take necessary measures, it shall bear joint and several liability with the said business operator on a platform.Where an online transaction platform operator fails to fulfill its obligation of verifying the qualification of any business operator on a platform or fails to fulfill its obligation of ensuring the safety of consumers, thus causing damage to consumers, it shall bear corresponding liability in accordance with the law.

Article 53 For the regulation and law enforcement activities carried out by the administrations for market regulation in accordance with the law, if the business operators refuse to provide relevant materials, information in accordance with these Measures, of if they provide false materials or information, or they conceal, destroy or transfer evidence, or they have other acts of refusing or obstructing regulation and law enforcement, where there are provisions in laws and administrative regulations or rules of other administration for market regulation, such provisions shall prevail; if there are no such provisions in laws, administrative regulations or rules of other administration for market regulation, the administration for market regulation shall order them to make corrections and may impose a fine ranging from 5,000 yuan to 30,000 yuan on them.

Article 54 Where the staff of the administrations for market regulation neglect their duties, abuse their powers, play favoritism and commit irregularities, or divulge, sell or illegally provide others with any personal information, privacy or trade secrets that they come into during the performance of their duties, they shall be investigated for legal liability in accordance with the law.

Article 55 Where a violation of these Measures constitutes a crime, criminal liability shall be investigated for in accordance with the law.

Chapter V Supplementary Provision

Article 56 These Measures shall come into force as of May 1, 2021, repealing simultaneously the Administrative Measures on Online Transactions promulgated under Decree No. 60 of the State Administration for Industry and Commerce on January 26, 2014.

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