On July 4th, the State Administration for Market Regulation and the Ministry of Commerce initiated a public consultation period for the drafted amendments to the "E-commerce Law of the People's Republic of China."

Officials from the relevant departments addressed questions regarding the motivations and principles behind the proposed revisions to this foundational legislation for the platform economy.

Primary Motivations for the Amendments

The proposed changes are driven by several key considerations. Firstly, they aim to foster a win-win development model for platform enterprises, the businesses operating within them, and their workers by strengthening platforms' social responsibilities through legislation.

Secondly, the amendments seek to maintain a fair competitive market environment. They intend to refine the legal liability framework for platforms, reinforcing their primary accountability and encouraging compliance to cultivate a healthier online marketplace.

Thirdly, the revisions are designed to promote high-quality economic development. By enhancing regulatory mechanisms and oversight effectiveness at the legislative level, the goal is to steer platform economy participants from a focus on "traffic volume" and "price competition" towards "innovation-driven" growth and "quality competition."

Fourthly, the amendments aim to expand high-level openness. They propose adding provisions concerning open cooperation, industry self-regulation, countermeasures, and dispute resolution to further open up the e-commerce sector and create a favorable legal environment for Chinese e-commerce businesses expanding overseas.

Guiding Principles for the Revisions

The modifications adhere to several core principles. The principle of "putting people first" focuses on protecting the rights of gig economy workers, small-to-medium merchants on platforms, and consumers.

The principle of "proportionality of punishment" seeks to establish a multi-tiered legal liability system with graduated penalties that match the severity of violations.

The "systemic governance" principle aims to build a coordinated, multi-party governance system for the platform economy, strengthening industry self-regulation and integrated online-offline supervision.

The principle of "internal-external connectivity" involves aligning with high-standard international trade rules, expanding openness, and safeguarding the legitimate rights and interests of enterprises operating globally.

Key Content of the Proposed Amendments

The draft amendment covers five main areas. It proposes to broaden the law's scope to clarify the rights and obligations of all participants in the platform economy beyond just the platforms and their internal merchants.

It seeks to improve the platform accountability system by diversifying regulatory tools to support routine oversight, moving beyond fixed fines and business suspension orders.

The draft aims to define a collaborative regulatory mechanism, adding principles for consistent management of cross-border and hybrid online-offline operations to enhance inter-departmental and central-local coordination.

It focuses on regulating prominent illegal activities in e-commerce, amending relevant clauses to address pressing public concerns.

Finally, it seeks to deepen international e-commerce cooperation by promoting the alignment of domestic rules, regulations, and standards with international norms, guiding orderly overseas expansion, and incorporating countermeasure provisions.

Next Steps in the Legislative Process

Following the public consultation, the State Administration for Market Regulation and the Ministry of Commerce will refine the draft amendments based on the feedback received. The subsequent step will be to advance the legislative process to enact the revised law, aiming to solidify the legal foundation for innovation and healthy development within the platform economy.