On July 4th, the draft amendment to the E-commerce Law of the People's Republic of China, researched and drafted by the State Administration for Market Regulation and the Ministry of Commerce, was released for public comment, sending a clear signal emphasizing both regulation and development. Stringent laws and clear regulations will not only provide consumers with a stronger legal "protective umbrella" but also inject more legal impetus into the standardized and healthy growth of the platform economy.
Thanks to the rapid advancement of digital technology, the platform economy has become deeply integrated into the entire chain of production, distribution, and consumption. It plays a crucial role in expanding domestic demand, stabilizing employment, and promoting industrial transformation, establishing itself as a significant engine driving economic growth.
However, as the platform economy continues to expand and new business models rapidly evolve, the existing legal and regulatory framework has become inadequate to meet the industry's actual needs. The current E-commerce Law, which came into effect in 2019, contains many provisions targeting traditional e-commerce formats like online storefronts, leaving regulatory gaps for newer models such as live-streaming e-commerce. In terms of penalties, the law's approach is relatively limited, primarily imposing a capped fine of 2 million yuan or ordering a business suspension. This makes it difficult to address the diverse governance needs for platforms of different sizes and with varying degrees of violations.
Frequent issues in the past, such as "ghost kitchens" in food delivery and "subsidy wars," have drawn strong public criticism and exposed shortcomings in the legal constraints within these areas. Faced with emerging risks like algorithm misuse, data monopolies, and disorderly cross-sector competition by some platforms, the legal and regulatory system governing e-commerce urgently needs to be updated and improved to keep pace with the times.
The purpose of amending the law is not to restrict the operations of platform enterprises but to reflect principles of stringent supervision, precise penalties, and proportionality between offenses and punishments. This aims to maintain order in online transactions and protect the legitimate rights and interests of all parties involved. Simultaneously, using legal means will better meet the needs for the high-quality development of the platform economy. For instance, the draft amendment proactively aligns with high-standard international trade and economic rules and adds relevant authorization clauses for countermeasures against foreign entities. This will undoubtedly help safeguard enterprises as they expand overseas, allowing the rule of law to inject robust momentum into the healthy development of the platform economy.
The rule of law is the best business environment. It is hoped that all sectors of society will seize this opportunity of legal revision to actively contribute suggestions, build broad consensus, and help foster fair competition, integrity, and law-abiding practices in the e-commerce sector. This will ensure the benefits of the platform economy are more widely shared among the public.
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