Amendments to China’s e-commerce law were proposed that would, for the first time, establish a legal basis for taking reciprocal countermeasures against foreign entities that impose discriminatory restrictions on Chinese e-commerce companies. The draft amendments, which were jointly released by the State Administration for Market Regulation (SAMR) and the Ministry of Commerce (MOFCOM), are the first major revision to the law since it took effect in 2019. One of the biggest change is the new countermeasure provision, which lays the legal groundwork for China to take reciprocal actions against countries, regions or entities that adopt discriminatory measures targeting Chinese e-commerce businesses. The proposal would empower Chinese authorities with legal justifications, under China’s unreliable entity list, to investigate foreign entities that harm the legitimate interests of Chinese companies, and would impose corresponding restrictions when deemed appropriate.
Hong Yanqing, Professor at the Beijing Institute of Technology’s School of Law, said, “The significance of the new provision lies not only in creating stronger countermeasures than those already available under existing laws, but also in establishing a clear legal entry point for addressing discriminatory practices in the e-commerce sector.” “When foreign measures discriminate against Chinese e-commerce businesses through platforms, payment, logistics, data, cloud services, advertising, app distribution and supply chain compliance mechanisms, the legal framework will be able to identify and respond to such practices in accordance with the law,” he said. The European Union has also adopted a wide range of measures, including restrictions on trade in services as well as limits on the protection or commercial use of intellectual property. Prof. Hong added that the amendments clarify the triggering conditions, regulatory responsibilities and procedural principles in advance. This makes it easier to distinguish between legitimate commercial activities and politically motivated exclusion, enabling foreign-invested companies, platform operators and cross-border e-commerce businesses to make informed compliance decisions”.
Beyond overseas protection, the revisions also strengthen enforcement power against platform operators in the e-commerce sector. Maximum fixed fines for certain violations would increase from CNY2 million to CNY5 million. For particularly serious offenses that result in severe social consequences, regulators would be allowed to impose fines of up to 5% of a company’s previous year’s revenue, replacing the current fixed penalty, the China Daily reports.
