E-commerce Transactions Open the Door to Legislation: Individuals Opening Online Stores Must Use Their Real Names
The standardization of e-commerce transactions has taken its first step. The draft for public comment of the "Interim Measures for the Administration of Online Commodity Transactions and Related Service Activities," drafted by the State Administration for Industry and Commerce, was recently released. The draft outlines relevant norms for online commodity transactions and services, requiring natural persons who engage in commodity transactions and related service activities through the internet to submit an application to the operator providing the online trading platform service, providing their real identity information such as name and address; those who meet the conditions for registration shall handle industrial and commercial registration according to law.
Previously, some industry and commerce departments required individual online stores to obtain business licenses, but the "Interim Measures" do not impose a mandatory requirement for this.
Platform service providers that fail to urge real-name registration will be fined 10,000 to 30,000 yuan
Over the past 10 years, China's e-commerce has experienced explosive growth, developing at a high speed of 100% per year. According to a survey by the China Internet Network Information Center (CNNIC), in 2009 China's online shopping user base reached 108 million, and the online shopping market transaction volume reached 250 billion yuan, accounting for nearly 2% of the total national retail sales of consumer goods for the year. The total number of individual sellers on Taobao alone exceeded 2 million.
The rapid development of the market has become the primary driving force pushing the government to accelerate legislation. The draft for public comment of the "Interim Measures for the Administration of Online Commodity Transactions and Related Service Activities," drafted by the State Administration for Industry and Commerce, was recently released. It clearly distinguishes sellers who open online stores through e-commerce platforms into two categories: legal persons and natural persons. The former, when operating online stores, are required to publicly display information such as business licenses in a prominent position on their web pages;
As for the many users who open online stores in their individual capacity, they only need to submit an application to the online trading platform service provider and provide real-name information such as name and address. For individual users who do not yet meet the conditions for industrial and commercial registration, the platform service provider must review and register their real identity information, establish registration files, and verify and update them regularly. There is no mandatory requirement to obtain a business license.
At the same time, platform service providers are required to “have the obligation to make the other party (natural person) aware of and agree to the registration agreement, and to draw the other party's attention to the clauses on obligations and responsibilities.” If the above provisions are violated and the platform service provider fails to rectify within the ordered rectification period, it will be fined between 10,000 yuan and 30,000 yuan.
Currently, individual users opening online stores are not mandatorily required to report their real names; they may leave it blank or use a pseudonym. “The most fundamental purpose of introducing these measures is to standardize online transaction and service activities, protect the legitimate rights and interests of consumers and operators, and promote the sustained and healthy development of the online economy,” said a responsible person from the relevant department of the State Administration for Industry and Commerce.
Li Xiaokuan, Deputy Director of the Market Regulation Department of the State Administration for Industry and Commerce, clearly stated that the administration will introduce measures to regulate online transactions, and has already established three principles internally to ensure the healthy development of online shopping. These three principles include: “First, establish that the task of online store management is to protect their healthy development, not to add burdens to them; second, begin building a credit system for online transactions; finally, increase efforts to protect rights in online transactions.”
Supporters and Opponents Are Evenly Split
“Opening a store on Taobao now already requires real-name registration. Only after passing ID card verification can one become a Taobao seller. Some large C2C online shopping platforms like Baidu Youa and Tencent Paipai basically all require sellers to use their real names.” Mr. Cheng, who opened a lighting store on Taobao last year, believes the regulations are intended to prevent fraudulent sellers on small websites. “Some sellers worry about real-name registration first, then taxation. But the United States currently implements an internet tax exemption law, with online shopping tax-free, so domestically there will definitely be no taxation on small and medium individual sellers in the short term.”
Many online store owners also expressed concern about the provision in the interim measures that “those who meet the conditions for registration shall handle industrial and commercial registration according to law.” “If we obtain an industrial and commercial business license, in the future it may be like physical stores, where we also need to carry out tax registration and pay business tax. This will increase transaction costs, and online store products will inevitably face price increases.”
Zhou Yue, a student at a university in Guangzhou, opened an online store in her spare time, mainly selling various brand-name shoes such as NIKE and Converse. “For amateurs like us, we just earn a little money from running an online store. What we value most is that it's not troublesome. If it becomes strictly regulated and too troublesome, we definitely won't do it anymore.”
“Regarding this draft for public comment, the State Administration for Industry and Commerce has had many thorough communications with Taobao before and after, and now is soliciting opinions from all internet users. This shows the state's high attention to e-commerce, and the legislation reflects the government's supportive and encouraging attitude toward the development of online shopping.” Zhang Yong, Chief Financial Officer of Taobao, told reporters that the current draft may still have some difficulties in implementation, and Taobao will continue to consult with the administration at the specific implementation level at a later time.
Xiao Xiao, CEO of Guanggou Network, told this newspaper that they had been calling for measures such as real-name registration for online stores to protect consumer rights. “After the online commodity transaction management measures are introduced, those amateur individual operators who are just playing around may exit. Those who seriously run online stores will remain, which is good for consumers. This area needs industry regulation.” He also believes that the trend of taxing online transactions has already emerged, and after taxation, price increases are certainly inevitable. (Wang Xiaoxing, Li Xiyan)
Industry: For the First Time, Supporters of the Draft Outnumber Opponents
Online, voices supporting and opposing the "Draft for Public Comment" are evenly split. As of 12 noon yesterday, Sina's survey on "State Administration for Industry and Commerce Public Consultation on Regulating Online Transactions" showed that 7,700 people participated in the vote, with more than 3,700 choosing to support, accounting for 48.7%, 44% considering it unreasonable, and 7.3% saying it was hard to tell.
More than a year ago, during another round of online voting on related legislative preparations, opponents exceeded 80%, with supporters accounting for less than 20%.
Liang Chunxiao, Deputy Director of the E-commerce Committee of the China Information Economics Society, said this is the first time that “supporters outnumber opponents.”