China’s Consumer Protection Law, published in 1993, has greatly contributed to the protection of consumer rights over the past two decades. However, since the country’s consumption patterns and structures have undergone significant changes in the years since the law’s release, some provisions have fallen behind the times, and are hindering the development of China’s consumer market.
In response, China’s National People’s Congress released the “Draft Amendment to the Consumer Protection Law on April 28, which is the first revision to the country’s Consumer Protection Law. The draft aims to further protect consumer rights and boost domestic demand in the country, and has made revisions to the current law in five areas:
- Enhancing consumer protection rules
- Strengthening business operators’ obligations
- Regulating the e-commerce industry
- Clarifying the rules of consumer associations
- Clarifying the regulatory responsibilities of administrative authorities
Enhancing Consumer Protection Rules
Better protection of personal information According to the draft, collecting and processing of personal information must be for specific, clear and reasonable purposes, and should be subject to the permission of the individual. The personal information of consumers is strictly confidential and business operators shall adopt necessary measures to ensure the security of such information. The Draft also provides that business operators are not allowed to send digital commercial information to consumers who have explicitly refused or have not agreed to receive them.
Harsher punishments for commercial fraud Harsher penalties will be placed on business operators who defraud consumers, and additional compensation for commercial fraud could be equivalent to twice the value of goods or services, with a minimum fine of RMB 500. Moreover, criminal liabilities will be investigated in cases where defective products have damaged health or resulted in death.
Strengthening Business Operators’ Obligations
Duty to recall defective products Business operators who have discovered their products are defective and could cause harm to health or property shall immediately suspend the production and sales of such products, issue a warning and recall the products.
Burden of proof on business operators To alleviate pressures on consumers, the draft imposes the burden of proof on business operators in the case of a legal disputes if defects are found within six months since the purchase date of such products.
Responsibility of advertisers and marketers The draft says that those who design, create and release deceptive advertisements concerning food and drugs, or others related to health, are subject to joint liability with the producers or business operators.
Regulating the Ecommerce Industry
The current Consumer Protection Law has no rules regulating online shopping. In order to close such loopholes, goods sold via the Internet, television, telephone or mail order, the draft would give consumers the right to return the goods within seven days from the date of receipt, and the amount paid shall be paid back within seven days upon the receipt of the returned goods by the seller.
The draft also requires online sellers to provide authentic and complete details relating to their products and/or services to online shoppers. Moreover, online shoppers can demand compensation from the e-trade platform if the seller has stopped using it, and the platform can then claim compensation from the seller after compensation has been paid out.
Clarifying Consumer Association Roles
The draft requires consumer associations to provide purchase information and consultation services to consumers and to participate in the legislation of laws, regulations and relevant standards concerning consumer rights and interests. Moreover, such organizations may file actions in cases where the rights of a large group of consumers have been infringed upon.
Clarifying Administrative Responsibilities
The relevant administrative departments shall handle complaints filed by consumers within seven days, and strengthen administrative punishments concerning acts infringing upon the interests and rights of consumers.
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