China's market regulator proposes amendments to e-commerce law

There are four proposed changes in sections 43 and 84 according to its statement.

According to the proposed changes, authorities may restrict an e-commerce platform operator from conducting online business activities up to revoking its licences if the operator fails to take necessary measures including to remove, block, disconnect, terminate transaction or services against vendors who violate intellectual property (IP) rights.

The regulator has proposed to add that if a vendor within the platform offers a guarantee for damages caused by a potential IP rights violation, the platform operator may temporarily suspend the measures mentioned above. If a vendor submits a false declaration of IP rights violation which results in increasing the rights holder’s losses, the compensation will be doubled.

Under the current law, an e-commerce vendor will cease the measures previously taken against operators on the platform to remove, block, disconnect, terminate transactions or services if it does not receive a notice of complaint or prosecution from the right holder within 15 days. SAMR is proposing to extend this period to 20 working days.

The amendments are open for public review till 14 October.

E-commerce expert Leo Xin of Pinsent Masons, the law firm behind Out-Law, said: “The proposed amendments aim to balance the interests of different parties and make the IRP infringement claims more workable by setting out clear timeline and actions required. However, technically, there might be still some issues to be further clarified such as what the amount of guarantee should be paid. In most cases, it is hard to prove losses associated with infringement claims.”