On October 25, 2013, the Standing Committee of the National People’s Congress of the People’s Republic of China passed an amendment to the P.R.C. Law on the Protection of Consumer Rights and Interests (the “Amendment”). The Amendment, which was adopted after three readings and will take effect on March 15, 2014, adds provisions designed to respond to the recent boom in online shopping and focuses on improving protections in the area of consumer rights and interests by:
- increasing penalties for violations of consumer rights;
- introducing a new rule on punitive damages;
- placing the burden of proof on vendors and service providers in the event of a dispute;
- banning unauthorized disclosures of consumer personal information; and
- establishing mechanisms for public interest litigation to remedy harms.
To address growing problems related to the misuse of consumers’ personal information in contemporary China, the Amendment establishes strict rules on how business operators should collect and use personal information, and how offenders may be punished. The Amendment emphasizes that the personal information collected by a business operator and its staff must be kept strictly confidential. It also prohibits business operators from leaking, selling or illegally providing such information to others, and requires operators to adopt appropriate technical measures to safeguard the information. At the same time, business operators may not send commercial messages to a consumer unless the consumer has provided consent or requested the information, nor when the consumer has expressly rejected the message.
The protection of consumer personal information will be significantly enhanced once the Amendment takes effect. With a number of recent regulations focused on the protection of personal information, business operators in China, particularly those that collect and use personal information online, should continue to monitor developments to ensure that their internal privacy policies and practices comply with this quickly evolving area of law.