Updates on Shanghai’s Consumers’ Rights & Interests

Catherine Cheng

Catherine Cheng is a senior associate. She holds a bachelor’s degree and a master’s degree in civil and commercial law from the East China University of Political Science and Law in Shanghai (China). She passed the China Bar examination in 2011. Before joining DaWo Law Firm, Catherine worked at a US law firm and at De Wolf Law Firm Shanghai.

On July 21st 2022, the 42nd meeting of the Standing Committee of the 15th Shanghai Municipal People’s Congress made the latest revisions to the “Regulations of Shanghai Municipality on the Protection of Consumers’ Rights and Interests” (hereinafter referred to as “Revisions”).

The Revisions respond to the demands of consumer rights protection under the emerging consumer industry, and more effectively protects consumers’ rights and interests. The Revisions will come into effect on August 1st 2022.

The main highlights of the Revisions are as follows:

01 Regulation of Implicit Marketing Methods

Updates on Shanghai's Consumers' Rights & Interests

The Revisions clarify, if an operator sells goods and services through Internet media in the form of Internet advertisements such as bidding rankings, it shall prominently mark “advertisement” according to the law. The wording “prominently” shall be highlighted here.

Test and assessment sites or bloggers that are often used in the Internet scene may advertise under the guise of sharing and testing. Even though the “advertisement” label is marked in some search engines but the font size is too small to recognize it. Thus consumers may be caught if they are not careful.

These will be regulated after effectiveness of the Revisions; however, the penalties for operators suspected of committing the above-mentioned acts remain to be clarified.

02 Strengthening Disclosure Obligation in Financial Consumption

Updates on Shanghai's Consumers' Rights & Interests

The Revisions clarify that financial service operators shall mark and explain important information such as interest rates, fees, benefits, and risks in a manner enough to attract consumers’ attention, and also confirm that consumers have received complete information in an appropriate way.

More and more transactions in financial consumption scenarios are carried out electronically; where the paperless contracting process brings convenience to consumers, it also hides the risks of information asymmetry and negligence.

The Revisions strengthen financial operators’ disclosure obligations and require operators to bear the burden of proof that consumers have confirmed receipt of complete information.

03 Banning Unreasonable Differential Treatment

Updates on Shanghai's Consumers' Rights & Interests

The Revisions clarify, operators who use consumers’ personal information to make automated decision-making shall ensure the transparency of the process and the fairness and impartiality of the results, and shall not impose unreasonable differential treatment on consumers in terms of transaction prices and other transaction conditions.

Previously, network operators have been criticized for different price treatment of users of different application systems, or that old users of the platform cannot enjoy the same treatment as new members etc. The price discrimination and differential treatment have caused consumers numerous complaints.

The Revisions respond to this concern and clarify that operators shall not implement unreasonable differential treatment; however, the legal liability of breaching the same matter needs to be improved.

04 Restricting Juveniles’ Online Game Consumption.

Updates on Shanghai's Consumers' Rights & Interests

The Revisions clarify, online game operators who provide game services to juveniles shall comply with the requirements of the law, as well as regulations and relevant state regulations on time, duration, consumption restrictions, content, etc.; and shall use electronic identity authentication or other technologies to allow juveniles using their real identity information to register and log in to the online game.

In practice, it’s very easy for juveniles to register online game accounts with their parents ID numbers and consume themselves in games, but sometimes their parents have no idea or find out too late to withdraw the kids’ consumption expenditures.
Therefore, the procedure to effectively regulate the identification and restriction of juveniles by operators through technical means is the key premise that the Revisions can really play a role.

05 Regulating Online Live Broadcasting

Updates on Shanghai's Consumers' Rights & Interests

The Revisions clarify that if online live broadcast marketing platforms strengthen the information security management of jump services such as links and QR codes in live broadcast rooms, and provide relevant records and other necessary information, data, etc.; the live broadcast room operator shall indicate the actual operator of the goods or services behind the links and QR codes in the live broadcast room; otherwise, they shall bear the corresponding responsibilities.

If the online live broadcast marketing platform fails to provide necessary data, a maximum fine of 500,000 yuan can be imposed. However, whether the operator of the live broadcast room should bear the same obligation to provide information and ensure data safety is not stipulated, leaving the relevant departments to further revise the specific laws and regulations regulating the operators of live broadcast rooms.

If you have any queries related to your Protection rights, please feel free to contact us at DaWo Law Firm!

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