China Technology, Media and Telecom: Monthly Update - October 2022 Issue

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Legislation Developments

1. CAC and other departments issued Regulations on Administration of Internet Pop-up Push Notifications

   On 9 September, the Cyberspace Administration of China (“CAC”), the Ministry of Industry and Information Technology (“MIIT”), and the State Administration of Market Regulation (“SAMR”) jointly issued the Regulations on the Administration of Internet Pop-up Push Notifications (the "Regulations"). The Regulations aim to outline the responsibilities of push notification service providers and to establish a sound system for content review, network ecology governance, data security, and protection of personal information and minors.

2. NPC passed Law on Combating Telecom and Online Fraud

   On 2 September, the Standing Committee of the 13th National People's Congress (“NPC”) voted to adopt the Law of the People's Republic of China on Combating Telecom and Online Fraud (the “Law”), which will come into force on 1 December, 2o22. The Law consists of 50 articles in 7 chapters, including the General Provisions, Telecom Governance, Financial Governance, Internet Governance, Comprehensive Measures, Legal Liability, and Supplementary Provisions. The Law is aimed to prevent and crack down on telecom and online fraud in all aspects and provide strong legal support for action against the crimes.

3. SAMR issued Measures for Supervision and Administration of Online Medication Sales

   On 6 September, the SAMR issued the Measures for the Supervision and Administration of Online Medication Sales (the "Measures"). The Measures aim to ensure medication quality and safety, facilitate medication use for the public, and improve the supervisory and administrative system for online medication sales by providing for the management of online medication sales and third-party platforms as well as the responsibilities and obligations of each party.

4. SASAC issued Measures for Compliance Management of Central Enterprises

   On 16 September, the State-owned Assets Supervision and Administration Commission of the State Council (“SASAC”) officially issued the Measures for the Compliance Management of Central Enterprises (the "Measures"), effective from 1 October 2022. The Measures underscore the importance of the development of compliance management mechanisms for central enterprises and stipulate that the enterprises should formulate specific compliance management mechanisms or specialized guidelines for key areas such as anti-monopoly, anti-bribery, tax administration, and data protection and for high-risk business sectors.

5. Shanghai rolled out Regulations on Promoting Development of AI Industry in Shanghai

   On 22 September, the Standing Committee of the Shanghai Municipal People's Congress passed China’s first provincial-level law in the AI sector, the Regulations on Promoting the Development of the AI Industry in Shanghai (the “Regulations”), effective from 1 October. The Regulations seek to promote the high-quality development of the AI industry from the perspectives of basic elements and technological innovation, industrial development, application empowerment, and industrial governance and security. In particular, the Regulations stipulate that an expert committee on AI ethics should be established to formulate AI ethics guidelines and conduct risk assessments for the application of AI in key areas.

6. Shanghai released Implementation Plan for Accelerating Innovative Development of Intelligent and Connected Vehicles in Shanghai

   On 5 September, the Shanghai Municipal People's Government released the Implementation Plan for Accelerating the Innovative Development of Intelligent and Connected Vehicles in Shanghai (the “Plan”). The Plan puts forward the key tasks for the innovation and advancement of intelligent and connected vehicles from the perspectives of technology breakthroughs, terminal solutions, ecology cultivation, coordinated development, application implementation, infrastructure facilities, and supporting policies. The Plan also specifies the responsible departments and the five supporting measures for each key task.

7. Shenzhen released Regulations on Promoting Development of AI Industry in Shenzhen Special Economic Zone

   On 5 September, the Standing Committee of the Shenzhen Municipal People's Congress passed China’s first local regulation dedicated to the AI sector, the Regulations on Promoting the Development of the AI Industry in the Shenzhen Special Economic Zone (the “Regulations”), which is scheduled to come into force on 1 November. The Regulations seek to promote and regulate the AI industry in Shenzhen from the perspectives of research and development, industrial infrastructure, application expansion, supporting policies, and governance principles and measures.

8. Ministry of Civil Affairs issued Implementation Plan for State Council's Guiding Opinions on Strengthening Building of Digital Government
   On 26 September, the Ministry of Civil Affairs issued the Implementation Plan for the State Council's Guiding Opinions on Strengthening the Building of a Digital Government (the "Plan"). The Plan specifies five main tasks for civil affairs authorities in their effort to build a digital government, including a coordinated and efficient digital system for government duty functioning, a set of scientific and standardized rules for digital government building, an open and shared database, an intelligent and intensive supporting platform, and a comprehensive security protection system. The Plan also puts forward three supporting measures, including reinforcing central leadership, enhancing digital literacy, and strengthening analysis and evaluation.

Enforcement Developments

1. National Copyright Administration and other authorities launched "Sword Net 2022" special action to combat online infringement and piracy

   The National Copyright Administration and three other authorities launched the "Sword Net 2022" special action to combat online copyright infringement and piracy in key areas such as document databases, short videos, and Internet literature, to enhance the supervision of the copyright management of online platforms, NFT digital collections, and other new businesses including role-playing murder mystery games (or jubensha in Chinese), and to strengthen the copyright protection for contents and programmes such as movies. The special action seeks to bolster the protection of online copyright in all aspects by both regulating the development of the industry and cracking down on infringement.

2. CCA released a series of comments on unfair terms in standard contracts in various fields

   Recently, the China Consumers Association (“CCA”) asked the lawyers from its legal panel to provide comments on the unfair terms commonly found in standard contracts used in various fields including online shopping, education and training, online games, medical and beauty, housing, auto insurance, and telecom. The comments are available on the "CCA Views" section of its website.

3. Ministry of Natural Resources and national security authorities jointly investigate "problematic map" shared by overseas map service providers
   The Ministry of Natural Resources and national security authorities have carried out joint law enforcement operations across many cities against enterprises and organisations that neglect the potential dangers to national security, fail to fulfil the information review procedure of map content under the law, and use overseas "problematic maps" services against the law. The Ministry of Natural Resources said that the relevant authorities would continue to strengthen law enforcement and supervision of related industries, promote the healthy development of the industry, and safeguard the security of national geographic data.

Industry Developments

1. CAICT released Research Report on Global Open-Source Ecology (2022)

   On 16 September, the China Academy of Information and Communications Technology (“CAICT”) released the Research Report on Global Open-Source Ecology (2022) (the “Report”). The Report discusses hot topics in the field of open source and for the first time analyses the positive impact of the global development of the open-source ecology on the digital economy and in various technology sectors. According to the Report, the development of the global open-source ecology has switched from the high-speed mode to a more stable pattern. Over the years, the area has witnessed a steady rise in the number of open-source projects, balanced and diversified expansion of open-source communities, continuous growth of open-source applications, and large funding inflows while also facing growing risks. In the end, the Report looks to the future and points out the development opportunities of China's open-source ecology.

2. China Automotive Technology and Research Center (CATRC), China Academy of Information and Communication Technology (CAICT), and others jointly released Guidelines of Standard Essential Patent License for Automotive Industry (2022 Edition)
   On 13 September, the Guidelines of Standard Essential Patent (SEP) License for the Automotive Industry (the “Guidelines”) were released. The Guidelines encourage both patentees and implementers to follow the core principles for automotive SEP licenses, namely the principle of balance of interests, the FRAND principle, the principle of entitlement to obtain licenses at any level in the industry chain, and the principle of consideration of industry differences in licensing negotiations. In addition, according to the Guidelines, royalty should be calculated based on the product component that contributes to the automotive product using the SEP technology. A variety of factors and methods should also be taken into consideration for the calculation with a reasonable cap imposed.