Recently, the Department of Electronic Commerce and Informatization of the Ministry of Commerce ("MOFCOM") has issued five industry standards, including the Specifications for Monitoring Indicators for Online Retail (Draft for Comment) and the Administrative Rules for False Deals Concluded on Online Retail Platforms (Draft for Comment) (the "Draft for Comment"), to solicit comments from the units concerned by December 5, 2017.
The Draft for Comment, as recommended standards by nature, may apply to the review and administration of fictitious deals, spurious comments and other false transaction activities on online retail platforms operated within the territory of China. According to the Draft for Comment, both merchants and users on such online retail platforms are forbidden from any act in connection with false deals. Rules launched by an online retail platform shall give some but not necessarily all examples to specify different types of act in respect of false transactions concluded by merchants on the platform, such as forging product orders and falsifying the trading of users. Any merchant doing business on an online retail platform shall be subject to the real-name authentication system, and the platform is allowed to charge merchants a reasonable amount of cash deposits according to applicable legal provisions, as the case may be.