On the horizon: new consumer rights

25 June 2013

Xia Chao

China's consumers look set to gain further rights under an amendment to the Law on Protection of Consumer Rights recently deliberated by China's legislative body.

The Standing Committee of the National People’s Congress of China (China's legislative body) adopted the Law of the People's Republic of China on Protection of Consumers' Rights and Interests - also known as the Consumer Protection Law - in  1993. Almost 20 years on, the Standing Committee is now considering amendments to the law in order to address economic, technological and social developments over the last two decades. These developments include the rapid growth of e-commerce markets, changes in consumption structures and concepts, and increasing consumer rights awareness and complaints. 

For example, the State Administration of Industry and Commerce, its local counterparts and the main consumer protection agencies received about 6,206,000 consumer complaints in 2010 and 6,686,000 million complaints in 2011. 

Key features of the Draft Amendments include:

A cooling period for consumers

This provision would offer consumers a seven-day 'cooling' or 'regret' period where business operators sell merchandise via the internet, television, telephone or mail order. Consumers would enjoy the right to make returns up to seven days after receiving the merchandise; business operators would be obliged to provide refunds within seven days of receiving returned goods. It appears that a consumer would not need a cause to make such returns. These provisions would be subject to certain exceptions including on-site purchases, bulk purchases, real estate, fresh products and food. 

Improved consumer privacy 

The Draft Amendments also include consumer privacy provisions. These would mean that if a business operator collected or used a consumer's personal information, it would need to expressly indicate to the consumer the purpose, method and scope of its collection and use and obtain the consumer’s consent. Business operators and their staff would also be subject to obligations to safeguard such information. 

These provisions would build on a number of recent developments intended to strengthen data protection in China following increasing concerns about the disclosure and abuse of personal information such as personal identification numbers, income status, home addresses and medical histories. Marcus Vass and Grace Chen's update of April 2013 covers these developments in further detail. 

A shift in the burden of proof

For civil disputes, current rules and regulations generally place burdens of proof on the claimant. 

However, under the Draft Amendments, the burden of proof will shift to business operators if blemishes or flaws appear within six months from the consumer receiving any of the following products or services:

• vehicles
• microcomputers
• televisions
• refrigerators
• other durable products or decoration
• renovation services  

Implications for consumer electronics suppliers

Given that many of the consumer complaints made in China relate to electronics products the developments could have a real impact on the consumer electronics market. Some businesses have raised concerns about the liabilities to which they would be exposed should the current Consumer Protection Law be amended.

However, both national and international suppliers who are already committed to delivering high levels of customer service equal to or beyond those which any amendment would deliver should be more concerned by how they can gain the most from such a development.

In addition, while the developments are not expected to give consumers rights beyond those enjoyed by their counterparts in regions such as Europe, suppliers will nonetheless want to follow the progress of the amendments and to be familiar with the detail to ensure there are no subtle differences which could make compliance particularly complex.