In the pandemic era, live-streamed e-commerce in China has become critical to marketing. Taobao Live, Kuaishou, and Douyin have emerged as major e-commerce and short-video APP that have attempted to combine the two industries. A huge number of online show live broadcasts and e-commerce live broadcasts have arisen, becoming a very active and important phenomenon in the Internet economy. Several new regulations were rolled out at the end of last year. We summarize them.
The State Administration for Market Regulation
Guiding Opinions of the State Administration for Market Regulation on Strengthening the Supervision of Webcast Marketing Activities
市场监管总局关于加强网络直播营销活动监管的指导意见 (November 6)
Consolidate the legal responsibilities of three types of subjects (platform, merchant, live streamer)
The use of live broadcast sales of goods or services must be legal (e.g. do not sell goods or services that are prohibited from online trading)
Publicize relevant information to protect consumers’ right to know and choose
Special advertisements (e.g. medicine) need to be reviewed before they are released
8 types of live broadcast violations will be investigated and punished according to law
o Violations of intellectual property rights.
o Food safety violations, including unqualified sales of food, sales of foods that do not meet food safety standards, and sales of foods with false production dates or expiry dates.
o Advertising violations such as publishing false advertisements, publishing illegal advertisements that violate social good habits, and illegal advertising endorsements.
o Price violations such as price bidding, using false or misleading price methods.
o E-commerce illegal acts, e.g. unauthorized deletion of consumer reviews.
o Illegal acts violating the legitimate rights of consumers, e.g. replacements, returns, etc.
o Illegal acts of unfair competition, e.g. web-casters deceiving and misleading consumers, illegal rewarded sales, etc.
o Product quality violations such as adulterated products, sale of fake products as genuine, substandard products as qualified products, etc.
National Radio and Television Administration of China
Notice on Strengthening the Management of Online Show Live and E-commerce Live Broadcast
(关于加强网络秀场直播和电商直播管理的通知) (November 24)
Live broadcasting platforms and e-commerce live broadcasting platforms must adhere to the right direction of giving priority to social benefits, be value-oriented, actively spread positive energy, show the truth, goodness, and beauty, also according to the characteristics and age of the audience. Avoid show off wealth and spread of unhealthy practices.
Live streaming platforms should implement real-name management for their hosts and users. Minors and those who don’t register with their real names should not be allowed to tip hosts. Users’ maximum tip or reward should also be limited by the platforms. Platforms should not use tactics that induce users to offer hosts illogical rewards or tips.
Live streaming platform should implement label classification management of the program content and corresponding streamers, and classify them (e.g. music, dance, fitness, etc. labels).
Live streaming platform shall establish a score for the live broadcast room and live streamers, refine the program quality score and violation scoring level, and link the score with the recommendation and promotion.
The e-commerce live broadcast platform shall conduct relevant qualification review and real-name certification for merchants and individuals that open live broadcasts to sell products, and keep complete review and certification records.
The e-commerce live broadcast platform must strictly follow the relevant regulations of online audio-visual program service management, and must not produce other audio-visual programs beyond the scope of e-commerce. To organize thematic e-commerce activities such as e-commerce festivals in the form of live broadcast rooms, live performances, etc. the activities shall be submitted 14 working days in advance. Information about guests, live streamers, content, settings, etc. shall be reported to the competent radio and television authorities.
Live broadcasts and e-commerce live broadcast platforms should actively explore the use of new technologies such as big data and AI, let algorithms support the promotion of high-quality audio-visual content, and realize accurate warning and control of illegal and bad content. For live broadcast rooms with high click volume, false high volume, large “reward” amounts, and business categories that are prone to problems, it is necessary to establish a human-machine integrated key monitoring and review mechanism to track program dynamics, analyze public opinions, and reasons, to prevent guiding deviations and problems.
The State Administration for Market Regulation
Measures for the Supervision and Administration of Online Transactions
网络交易监督管理办法 (March 12)
When collecting and using consumer personal information, merchants shall follow the principles of lawfulness, fairness, and necessity, clearly state the purpose, method, and scope of information collection and use, and obtain the consent of consumers. (one-time general authorization, default authorization, binding with other authorizations are prohibited).
Merchants shall not deceive or mislead consumers by making false or misleading commercial propaganda (e.g. fake reviews).
Merchants shall follow the principles of voluntariness,