China proposed amendments on Saturday to its e-commerce law that would, for the first time, build a solid 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 and the Ministry of Commerce, represent the first major revision to China’s e-commerce law since it took effect in 2019.
One of the biggest changes 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, a 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.
Hong said that introducing countermeasure provisions reflects a broader trend among major economies. The European Union, for example, has adopted a wide range of response measures, including restrictions on trade in services as well as limits on the protection or commercial use of intellectual property.
The EU measures “extend across services trade, investment, financial services, government procurement, intellectual property and supply chain-related activities. E-commerce and digital trade sit at the intersection of all these areas, making them particularly vulnerable to such restrictions,” he said.
Regarding China’s draft amendments, Hong said that “rather than relying on catch-all legal provisions or ad hoc policy responses in individual cases, 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 2 million yuan ($295,000) to 5 million yuan. For particularly serious offenses that result in severe social consequences, regulators would be allowed to impose fines of up to 5 percent of a company’s previous year’s revenue, replacing the current fixed penalty.
Xue Jun, director of Peking University’s e-commerce law research center, said that the draft amendments do not simply increase penalties for e-commerce operators but also introduce more flexible enforcement mechanisms.
“For example, ordering a business to suspend operations can have a significant impact on its continued operation. The amendments therefore introduce additional enforcement options, including suspending new user registrations or halting specific business activities,” he said.
“This allows enforcement measures to be better aligned with the severity of the violation, ensuring that the punishment is proportionate to the misconduct,” he added.
Chinese policymakers have in recent years shifted their focus from regulating internet platforms to promoting the sector’s high-quality development, encouraging companies to compete through innovation and service quality rather than price wars.
The current e-commerce law was drafted largely around conventional online retail platforms before the rise of new e-commerce forms.
Therefore, the latest draft amendments cover operators of newer business models, including livestreaming platforms, social commerce and artificial intelligence-enabled e-commerce services.
It also expands legal protections to groups that have become increasingly pivotal to the platform economy, including gig workers such as food delivery riders and ride-hailing drivers.
Tanks to chinadaily.com.cn
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