China Issues New Rules Regulating Internet Giants And Platform Economy

Chinese regulatory authorities have proposed new policies to further regulate the country’s Internet giants and platform economy.

Nine ministries and commissions including the National Development and Reform Commission, the State Administration of Supervision, the Cyberspace Administration of China, and the Ministry of Industry and Information Technology jointly issued a document on Wednesday.

"Several Opinions on Promoting the Standardized, Healthy and Sustainable Development of the Platform Economy" provides guidance on issues such as anti-monopoly and anti-competition law enforcement, data and algorithm security, platform interconnection, and the gig economy.

The document takes a positive tone in supporting platform companies including Alibaba, Tencent, and Baidu, who have received harsh punishments and fines during the past year on anti-competition and anti-monopoly grounds.

The new proposal clearly states Beijing’s support for platform technology innovation, while encouraging business model innovation and improving globalization.

It also proposes to support leading platform companies to lead the formation of innovation consortia to promote Beijing’s new focus of innovation, including underlying architecture of the industrial Internet, industrial software technology, artificial intelligence, public algorithms, and blockchain technology.

It supports platform companies to promote digital products and services to "go global", to actively participate in the formulation of relevant international rules such as cross-border data flow and digital economy taxation, and participate in international coordination of anti-monopoly and anti-unfair competition.

It specifically mentions that platform companies should be encouraged to develop cross-border e-commerce, actively promote the construction of overseas warehouses, improve the level of digitalization, intelligence and facilitation, and promote small and medium-sized enterprises to rely on cross-border e-commerce platforms to expand the international market.

Below is the translated document in full.


Relevant departments of all provinces, autonomous regions, municipalities directly under the Central Government and Xinjiang Production and Construction Corps:

The platform economy is a new economic form with the Internet platform as the main carrier, data as the key production factor, new generation information technology as the core driving force, and network information infrastructure as the important support.

In recent years, our country’s platform economy has developed rapidly, and its status and role in the overall economic and social development has become increasingly prominent. It is necessary to adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the spirit of the 19th National Congress of the Communist Party of China and all previous plenary sessions of the 19th Party Congress, thoroughly implement the decisions and deployments of the Party Central Committee and the State Council, base itself on the new development stage, implement new development concepts, and build new development pattern, promote high-quality development, proceed from the strategic height of building new national competitive advantages, adhere to the equal emphasis on development and regulation, adhere to the "two unswerving", follow the laws of the market, focus on the long-term, take into account the current, make up for shortcomings and strengthen weaknesses, adapt to the laws of platform economic development, establish and improve rules and regulations, and optimize the environment for platform economic development.

In order to further promote the healthy and sustainable development of the platform economy, the following opinions are hereby offered.

1. Improve the rules and regulations

(1) Improve governance rules.

Revise the Anti-Monopoly Law and improve the supporting rules of the Data Security Law and the Personal Information Protection Law. Formulate and promulgate regulations prohibiting unfair competition on the Internet. Refine the platform enterprise data processing rules. Formulate and issue price behavior rules in the platform economy field to promote the orderly and healthy development of the industry. Improve the regulatory rules system in the financial sector, insist that all financial activities are included in financial supervision, and financial businesses must be licensed to operate.

(2) Improve the system and norms.

Clarify the boundaries of platform responsibility and strengthen the responsibility of super-large Internet platforms. Establish a platform compliance management system, and form an effective external supervision and evaluation system for platform compliance. Increase the development of national standards related to the platform economy. Establish an Internet platform information disclosure system, enhance the transparency of platform operations, and strengthen credit constraints and social supervision. Establish and improve the platform economy fair competition supervision system. Improve the "graded classification + negative list" supervision system for cross-border data flow, and explore the formulation of an algorithm security system for Internet information services.

(3) Promote collaborative governance.

Strengthen the coordination of departments, adhere to the principle of "integrated supervision of online and offline", and the competent departments of various industries with supervision functions are responsible for offline supervision and at the same time assume the responsibilities of corresponding online supervision, so as to realize the unification of powers and responsibilities of approval, supervisor and supervision. Promote the mutual recognition of random inspection and appraisal results among various regulatory departments, avoid repeated random inspections and testing, and explore the establishment of a case consultation, joint law enforcement, and joint punishment mechanism to achieve pre-event, in-process, and post-event full-chain supervision. Promote industry self-discipline, urge platform companies to operate in compliance with laws and regulations, and encourage industry associations to take the lead in formulating group standards and industry self-discipline conventions. Strengthen social supervision, explore a supervision mechanism involving the public and third-party professional institutions, and promote the openness and transparency of platform companies’ compliance operations.

2. Improve the ability and level of supervision

(4) Improve competition supervision and law enforcement.

For key industries and fields that are strongly reflected by the people, strengthen the whole-chain competition supervision and law enforcement. Investigate and punish acts such as monopoly and unfair competition in the platform economy in accordance with the law. Strictly investigate and deal with monopoly agreements in the platform economy, abuse of market dominance and illegal implementation of concentration of operators. Strengthen platform advertising-oriented supervision, and strengthen supervision of advertising in key areas. Focus on regulating issues such as misleading consumers by reducing and degrading products, platforms failing to review the market access qualifications of sold products, etc., and implementing online operators’ product recall obligations for defective consumer products. Increase the crackdown on the illegal operation of platform companies in the travel field. Strengthen tax assistance obligations such as reporting tax-related information of platform companies, strengthen tax supervision of platform companies, and investigate and punish tax-related violations such as false invoicing and tax evasion in accordance with the law. Strengthen the management and supervision of platform deposit, prepayment, security deposit and other expenses.

(5) Strengthen the supervision of the financial sector.

Strengthen the supervision of the payment field, disconnect the improper connection between payment instruments and other financial products, govern the exclusive or "choose one" behavior in the payment process in accordance with the law, strengthen the supervision of the abuse of the market dominance of non-bank payment services, and study and introduce non-bank payment services. Bank Payment Institution Regulations. Standardize the use of platform data, strictly supervise the credit reporting business, and ensure legal and compliant operations. Implement the financial holding company supervision system, strictly examine the qualifications of shareholders, strengthen penetrating supervision, and strengthen comprehensive risk management and related party transaction management. Strictly regulate platform companies’ investment in financial institutions and local financial organizations, and urge platform companies and their holding and shareholding financial institutions to strictly implement capital and leverage ratio requirements. Improve the financial consumer protection mechanism, strengthen the supervision of marketing behavior, ensure that the information disclosed is true and accurate, and shall not induce excessive consumption.

(6) Explore data and algorithm security supervision.

Conscientiously implement the principles of legality, legitimacy, and necessity for the collection and use of personal information, and severely crack down on illegal acts such as platform companies collecting personal information beyond the scope and calling personal information beyond their authority. Strictly control the behavior of unnecessary data collection, and crack down on data abuse such as black market data transactions and big data killing in accordance with laws and regulations. Under the premise of strictly protecting commercial secrets such as algorithms, support third-party institutions to carry out algorithm evaluation, guide platform companies to improve the transparency and interpretability of algorithms, and promote algorithm fairness. Seriously investigate and deal with illegal and illegal activities such as the use of algorithms to falsify information content, disseminate negative harmful information and vulgar and inferior content, traffic hijacking, and fake account registration. Promote platform enterprises to deeply implement the network security level protection system, explore and carry out data security risk situation monitoring and reporting, and establish an emergency response mechanism. State organs shall obtain and use personal information in accordance with the law in law enforcement activities to protect data security.

(7) Improve and improve supervision techniques and means.

Strengthen digital supervision support, establish non-contact supervision mechanisms such as online discovery, circulation, investigation and handling of illegal clues, improve supervision capabilities such as monitoring and early warning, online law enforcement, and information publicity, and support areas with mature conditions to carry out digital supervision pilot innovation. Strengthen and improve credit supervision, and strengthen the management of the list of the untrustworthy with serious violations of the law in the platform economy. Give play to the role of industry associations, guide Internet companies to strengthen the exchange, interconnection, and mutual recognition of credit evaluations related to lists of serious violations of law and untrustworthiness, and promote platform companies to implement joint prevention and control of illegal acts by network operators.

3. Optimizing the development environment

(8) Reduce the operating costs of platform economic participants.

Continue to promote the facilitation and standardization of the registration of market entities related to the platform economy, and support the provincial people’s government in coordinating the pilot project of separate registration of residence and business premises in accordance with relevant requirements. Further clean up and standardize rules and regulations such as platform economic access that have no basis in law and expand powers without authorization. Improve the catalogue of prohibited licenses for Internet market access. Guide platform companies to reasonably determine service fees such as payment and settlement, platform commissions, and provide high-quality small and micro merchants with certain traffic support. Platform service charges should be consistent in quality and price, fair and reasonable, and should be negotiated and fully communicated with operators on the platform, and the order of fair competition should not be compromised.

(9) Establish an orderly and open platform ecology.

Promote cooperation between platform enterprises, build a compatible and open ecosystem, stimulate the vitality of platform enterprises, and cultivate new momentum for the development of platform economy. Advocating fair competition, inclusive development, and open innovation, platforms should promote ecological opening up in an orderly manner in accordance with laws and regulations, provide services fairly and externally in accordance with unified rules, and must not be maliciously incompatible, or set unreasonable procedural requirements. Platform operators shall not take advantage of data, traffic, technology, market, and capital to restrict the independent operation of other platforms and applications. Promote the formulation of system migration and interconnection standards between cloud platforms, and accelerate business and data interconnection.

(10) Strengthen the protection of the rights and interests of workers in new forms of employment.

Implement policies and measures related to the protection of the rights and interests of workers in new employment forms such as online delivery staff and online car drivers. Improve the identification standards for labor relations between workers in new forms of employment and platform companies and labor cooperative enterprises, explore and clarify the identification standards for situations that do not fully meet the establishment of labor relations, and reasonably determine the rights and obligations of enterprises and workers. Guide platform companies to strengthen negotiations with workers in new employment forms, and rationally formulate systems and algorithm rules that directly involve workers’ rights and interests, such as order allocation, piece-rate unit price, and commission ratio, and publish them publicly to ensure that the system and rules are open and transparent. Improve the minimum wage and payment guarantee system to ensure that workers in new employment forms receive reasonable labor remuneration. Carry out a pilot program of occupational injury protection for people with flexible employment on the platform, and explore mechanisms such as the purchase of commercial insurance by employers. Implement a national insurance plan to promote the participation of workers in new forms of employment in social insurance. Strengthen safety awareness and legal awareness training for workers in new employment forms.

4, enhance the ability of innovation and development

(11) Support platforms to strengthen technological innovation.

Guide platform enterprises to further leverage the platform’s market and data advantages, actively carry out technological innovation, and enhance core competitiveness. Encourage platform enterprises to continuously increase the intensity of R&D investment, and accelerate technological research and development breakthroughs in the fields of artificial intelligence, cloud computing, blockchain, operating systems, and processors. Encourage platform enterprises to accelerate the innovation, research and development and application of digital green integration technology, and help build a zero-carbon industrial chain and supply chain. Create a favorable policy environment for technological innovation, and further improve the intellectual property protection system that adapts to the innovation and development of platform enterprises. Support powerful leading enterprises or platform enterprises to lead the formation of innovation consortia, and promote key software technology research around the underlying architecture of the industrial Internet, industrial software root technology, artificial intelligence open innovation, public algorithm sets, and blockchain underlying technology.

(12) Improve the level of globalization development.

Support platform companies to promote digital products and services to "go global", enhance their international development capabilities, and enhance their international competitiveness. Actively participate in the formulation of relevant international rules such as cross-border data flow and digital economy taxation, participate in international coordination of anti-monopoly and anti-unfair competition, give full play to the role of pilot free trade zones and free trade ports, and promote the construction of mutually beneficial and win-win international economic and trade cooperation Rules to create a good environment for the international development of platform enterprises. Cultivate professional intermediary services such as intellectual property rights, commercial coordination, and legal counsel, pilot and explore convenient judicial coordination, investment protection and relief mechanisms, strengthen overseas intellectual property risk early warning, rights protection assistance, dispute mediation and other working mechanisms, and protect my country’s platform enterprises and operations the legitimate rights and interests of the person abroad. Encourage platform enterprises to develop cross-border e-commerce, actively promote the construction of overseas warehouses, improve the level of digitization, intelligence and facilitation, and promote small and medium-sized enterprises to rely on cross-border e-commerce platforms to expand the international market. Actively promote the construction of overseas economic and trade cooperation zones, and cultivate cross-border e-commerce industry chains and ecosystems such as warehousing, logistics, payment, customs clearance, and foreign exchange settlement.

(13) Encourage platform enterprises to carry out model innovation.

Encourage platform enterprises to make full use of their advantages in technology, talent, capital, channels, data, etc. under the premise of compliance with laws and regulations, play a key role in innovation and leadership, and promote the development of "Internet +" in a wider, deeper and more efficient direction . Encourage the integration and innovation of elements based on the platform, strengthen the collection, analysis and mining, and comprehensive utilization of industry data, and promote the marketization of data elements in key industries on a pilot basis. The pilot explores a new resource sharing model of "separation of ownership and use rights", revitalizes idle resources in cloud platforms, development tools, workshops, etc., and cultivates new forms of sharing economy. Platform enterprises are encouraged to carry out crowdsourcing of innovative business, and more open and share resources to small and medium-sized enterprises.

5. Enabling economic transformation and development

(14) Enabling the transformation and upgrading of the manufacturing industry.

Support platform companies to rely on market and data advantages to empower production and manufacturing links, and develop new manufacturing models such as on-demand production, sales-based production, and personalized customization. Encourage platform enterprises to strengthen cooperation with leading enterprises in the industry, improve their integrated digital production and operation capabilities, promote the digital and intelligent upgrading of supply chains, and drive the overall digital transformation of traditional industries. Explore and promote the cooperation between platform enterprises and industrial clusters, make up for the shortcomings of regional industrial transformation and development, and promote the improvement of regional industrial competitiveness. Guide platform enterprises to actively participate in the industrial Internet innovation and development project, carry out key technology research, public platform cultivation, and promote the construction of a multi-level and systematic industrial Internet platform system. In-depth implementation of the inclusive "cloud data empowerment" action to support small and medium-sized enterprises to gradually upgrade their data to the cloud to management and business cloud. Implement a special campaign for digital empowerment of small and medium-sized enterprises, and encourage the promotion of excellent practices in digital, green, and intelligent traditional industries.

(15) Promote the digital transformation of agriculture.

Encourage platform enterprises to innovate and develop smart agriculture, promote the digitalization of planting, animal husbandry, fishery and other fields, improve the digitalization level of all links in the industrial chain of agricultural production, processing, sales, logistics, etc., and improve the quality traceability system of agricultural products. Help achieve high-quality and high-quality agricultural products. Standardize the trading behavior of agricultural products and agricultural materials of platform enterprises, purchase and sell agricultural products, pesticides and veterinary drugs residues shall not exceed the standard, do not purchase or sell substandard agricultural materials, effectively ensure the quality and safety of products, and support the purchase and sales of organic certified agricultural products. Guide platform enterprises to deploy in rural areas, accelerate the development of rural e-commerce, and promote "Internet +" agricultural products from villages to cities. Further guide the platform economy to empower the development of "agriculture, rural areas and farmers", accelerate the construction of a rural credit information system, use digital means to innovate the way finance supports agriculture and rural areas, and cultivate new momentum for comprehensive rural revitalization.

(16) Improve the platform’s ability to create consumption.

Encourage platform enterprises to expand "Internet +" consumption scenarios, provide high-quality products and services, promote the popularization and application of smart products such as smart home, virtual reality, and ultra-high-definition video terminals, and develop new retail methods such as smart shopping guides, smart replenishment, and virtualized experience. , promote telemedicine, online office, knowledge sharing and other applications. Guide platform enterprises to carry out online promotion activities such as brand consumption and quality consumption, and cultivate new growth points of consumption. Encourage platform enterprises to help optimize public services, and improve the level of inclusiveness, convenience, and personalization of services such as medical care, social security, and employment. Encourage platform companies to provide barrier-free services, and enhance the convenience for special groups such as the elderly and the disabled to enjoy intelligent products and services. Guide platform enterprises to carry out digital assistance and promote the improvement of digital technology and digital literacy.

6. Safeguards

(17) Strengthen overall planning and coordination.

Fully relying on existing mechanisms, strengthen departmental coordination, central-local linkage, and strengthen collaborative research and judgment on major issues in the platform economy. Strengthen the overall coordination of regulatory actions and policies, fully listen to the opinions of all parties, especially the opinions of administrative counterparts, avoid affecting and interrupting the normal business activities of platform enterprises, and prevent unanticipated risks caused by the superposition of policies. Strengthen the overall planning of the central government, the provincial overall responsibility, and the local implementation of territorial management responsibilities, and adhere to the organic unity of responsibility division, evaluation and evaluation, and accountability.

(18) Strengthen policy guarantees.

Encourage venture capital, equity investment (funds), etc. to increase investment in the field of technological innovation, and support technological innovation of enterprises. Encourage relying on various colleges and universities, vocational colleges and research institutions to strengthen the cultivation of high-end talents and practical talents in the digital economy. Strengthen digital skills education and training for all. All localities should actively promote the development of the platform economy, improve the policy system for promoting the development of the platform economy, and study and solve major problems in the development of the platform economy in a timely manner.

(19) Carry out pilot exploration.

Relying on the National Digital Economy Innovation and Development Pilot Zone, Comprehensive Innovation and Reform Pilot Zone, National Intelligent Social Governance Experimental Base, National Network Market Supervision and Service Demonstration Zone, National E-commerce Demonstration Base, Free Trade Demonstration Zone, Free Trade Port, etc., explore the establishment of adaptive The supervision model for the development of the platform economy is to build an institutional environment that is compatible with the innovation and development of the platform economy.

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