New regulations for live-streaming e-commerce will reshuffle online sales.
Compiled from: People's Daily, FindLaw
The China General Chamber of Commerce recently issued a notice requiring the Media Shopping Professional Committee, a subordinate body, to lead the drafting and formulation of two new regulations: the Basic Specifications for the Operation and Service of Video Live-Streaming Shopping and the Evaluation Guidelines for the Integrity Service System of Online Shopping. The new regulations set forth requirements for industry terminology and definitions, the product quality of goods sold via livestreaming, the software and hardware requirements for livestreaming scenarios, the code of conduct for online hosts, the business management of industry enterprises, the compliance of content publishing platforms, and the supervision and management by regulatory authorities. This is the first nationwide standard in the industry and will be released and implemented in July this year.
Why were the new regulations formulated?
As a new entry point for traffic and retail, livestreaming e-commerce has shown remarkable vitality amid the COVID-19 pandemic and has even taken the nation by storm. Livestreamers keep setting new sales records, while celebrities and entrepreneurs cross over to test the waters, adding fuel to the fire. Government officials have also stepped up to enthusiastically promote agricultural products. However, it is not uncommon for some livestreamers to chase traffic at the expense of quality. Problems such as customers receiving goods that do not match the description and encountering obstacles in after-sales service have been emerging one after another. The recently popular “agricultural assistance fruit” has also been repeatedly criticized for delivering rotten fruit.
According to statistics from the Ministry of Commerce, in the first quarter of this year, China hosted over 4 million e-commerce livestreaming sessions, further enhancing the role of online retail in driving consumption. "Livestreaming e-commerce" combines elements of TV shopping formats, online shopping invitations, and advertising endorsements, involving a relatively complex industry chain. Key participants such as streamers, content hosting platforms, and product suppliers lack clear management standards and regulatory mechanisms.
The purpose of formulating the new regulations is to standardize live-streaming shopping and online shopping in China, guide the healthy development of online shopping, and eliminate chaotic practices in live-streaming. This aims to gradually improve the management level of the online sales industry and protect the interests of consumers.
How to legally sell through live-streaming?
In fact, to address issues such as non-standard practices, incomplete regulatory systems, and the emergence of counterfeit products in live-streaming e-commerce, the ultimate solution lies in the law and regulation-based oversight. Although live-streaming e-commerce involves multiple platforms, entities, methods, and types of goods or services, appearing diverse, when looking beyond the surface, there are only two main categories.
Any live-streaming sales conducted in one’s own name for self-operated goods or services fall under the sales category, and such live-streaming e-commerce activities are no different from other e-commerce sales activities. Any promotion, publicity, or traffic diversion for another party’s goods or services falls under the advertising or endorsement category, and such live-streaming e-commerce activities may be regulated by reference to the rules governing advertising production and publication or celebrity endorsement.
From this perspective, the issues arising from livestreaming e-commerce can all be resolved under relevant laws, and the subjects of rights and obligations, as well as the bases, channels, and pathways for regulatory enforcement and rights protection, can all be identified. For example, the sale of “three-no” products and counterfeit or substandard goods can be addressed under the Product Quality Law and the Trademark Law; false or exaggerated advertising can be addressed under the Anti-Unfair Competition Law and the Advertising Law; difficulties in guaranteeing after-sales service can be addressed under the Law on the Protection of Consumer Rights and Interests; and the issue of false endorsements can also be addressed under the Advertising Law. In addition, the E-Commerce Law contains explicit provisions on the regulatory and management responsibilities regarding e-commerce sales activities and e-commerce platforms’ obligations in relation to “acts that infringe upon the lawful rights and interests of consumers when operators on the platform sell goods or provide services.” If the aforementioned legal liabilities are “performed by each according to its role” and fully implemented, they can drive and constrain livestreaming e-commerce activities onto the track of the rule of law.
[1] The author's perspective
In my view, nothing can be accomplished without norms or standards, and the booming livestreaming e-commerce industry also needs to establish rules and set thresholds. The chaotic phenomena in livestreaming e-commerce cannot be ignored; if left unchecked, it will harm not only those whose rights are infringed but also the development trajectory of this popular consumption method. Currently, livestreaming e-commerce has become a mainstream sales method, yet China has very few laws and regulations in this area, making the introduction of new regulations timely. These new regulations not only ensure product quality but also regulate anchors, enterprises, and platforms, while also imposing requirements on regulatory authorities, addressing issues from multiple angles to achieve the goal of regulating this emerging industry.
At present, the pandemic has not yet been fully eliminated, and the country is vigorously stimulating consumption. Both the street-stall economy and livestreaming e-commerce play a positive role in China's economic development. Therefore, as livestreaming e-commerce rises, it is essential to establish a healthy atmosphere, allowing this emerging sales method to grow soundly rather than developing wildly in a mixed and chaotic environment.
