China (PRC)
| Following the high profile dispute between Tencent and Qihu over the use of their software products last year, the Ministry of Industry and Information Technology (MIIT) issued draft measures regulating unfair competition activities among Internet information service providers for public comment. Jeanette Chan and Sean Li of Paul, Weiss, Rifkind, Wharton & Garrison examine the implications. Under the draft measures, MIIT has proposed that providers are prohibited from engaging in unfair competition activities, such as offering products that are incompatible with competitors’ products without reasonable grounds or authority, or disturbing the operation, or blocking the information, of competitors’ products or services. If a provider queries the security or the quality of a competitor’s service, it must test such quality through a reputable third-party organisation. Providers are also prohibited from infringing user rights in certain ways, such as restricting users’ ability to choose other providers’ products or services, arbitrarily installing, operating, upgrading, or uninstalling software on users’ terminals without their consent. Further, providers are prohibited from collecting or storing users’ personal data without explicit legal basis or the users’ consent. If personal data is required for identification or needed for the service to operate, users must be clearly informed of the purposes for which the data will be used. Any unauthorised disclosure of users’ personal data is prohibited. Providers who violate the draft measures will be subject to penalties of up to RMB1 million and, in serious cases, their business operations may be suspended. The draft measures reiterate the mechanisms currently available for settling disputes in the Internet information service sector. They reiterate the role of MIIT in its supervision and guidance over the dispute settlement process. |
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