On March 15th, the Government of China put the “New Consumer Protection Law” into effect.
Compared to the past 15 years of consumer norms, this new regulation represents an important step forward; we can also presume that the big changes in the Chinese retail market as well as the booming e-commerce trade (e.g. Taobao) have been playing an important role in favoring this new introduction.
The guidelines have been designed in a way that should encourage “Green Consumption”.
On the other hand, it also represents a strategy to favor the approval of the newly established government: the increasing pressure brought about by the Chinese people, particularly the urban middle class, in delicate aspects such as air pollution, and more generally health concerns, has also favored the introduction of these norms.
By introducing these amendments, the regulators are able to shift the attention to other problems that interest not only public entities but also private operators. In other words, they have been able to spread the burden onto other economic players. In facts, for private firms, it implies a more stringent business environment.
In this context, we will first focus our attention on those pillars that mostly attracted the public debates, and then try to define their implications.
REINFORCE SOCIAL HONESTY
- Enterprises should abide by the social morality and protect the legitimate rights and interests of consumers;
- Dishonest behavior will be officially recorded and made public.
PROTECT CONSUMERS PERSONAL INFO
- Firms should collect and use consumers’ personal info only with their approval;
- Info collection should not violate the law. Businesses should take technical measures to prevent info disclosure;
- Enterprises should send information with consumers’ approval or request. Otherwise the information cannot be sent.
INTENSIFY THE ENTERPRISE LIABILITY ON RECALL OF DEFECTIVE GOODS
- Enterprises should immediately report to supervision department and notify consumers when they find their products or services are defective;
- Companies should take actions immediately to stop selling, recall, destroy, and stop producing such products;
- Enterprises should bear the costs that consumers have spent;
- When goods and services do not meet the quality requirements, consumers can return these products within 7 days from the date on the receipt. And the firms should bear the cost incurred by the consumers.
INFORMATION DISCLOSURE FOR FINANCIAL AGENTS
- Those enterprises that are involved in newly launched financial services business models have the obligation to fully inform their clients and disclose necessary information to evaluate the risks of the businesses;
- This information includes among other things: business address, contacts, quantity and quality of product or service, price or charge, deadline and method for performance, safety precautions and risk warning, after-sales service, civil liability, and so on.
ENLARGE THE RESPONSIBILITY OF ONLINE SHOPPING PLATFORMS
- Consumers can claim indemnity against online shopping platforms if they cannot submit the actual name, address, and contacts of the product proprietors. After paying back the consumers, the online shopping platform has the right to recover money from the product proprietors;
- The online shopping platform and product proprietors are jointly liable when the online shopping platform has enough information to know that the products violate the legitimate rights and interests of the consumers and no measures have been taken.
To conclude, let’s try to define the major implications of the innovations mentioned above.
