China: China proposes new internet regulation

Last Updated: 26 January 2011
Article by Martyn Huckerby, Emily Deng and Sharon Wong

China's Ministry of Industry and Information Technology (MIIT) recently published proposed new measures designed to regulate competition between internet information service providers and enhance supervision over the internet information service market, with comments due by Valentine's Day.


The MIIT has commenced consultation on the Provisional Measures for the Supervision and Administration of the Internet Information Service Market Order (Draft For Comments) (Draft Measures), seemingly in attempt to avoid further disputes similar to the recent conflict between Tencent Technology (Shenzhen) Limited and Beijing Qihoo Technology Limited (detailed below). The Draft Measures introduce a framework for the regulation of unacceptable behaviour by internet information service providers (Providers) in respect of their online information services and products, and mandates a dispute resolution mechanism. Prohibited activities include conduct deemed to be unfair competition, infringement of users' legal rights and failure to duly protect the private information of users.

While not directly referenced, certain provisions of the Draft Measures have been developed with reference to existing laws such as the PRC Anti-Monopoly Law, the Anti-Unfair Competition Law and the Consumer Protection Law (for example, provisions related to false propaganda and infringement of the consumers' right to choose). Whereas existing laws and regulations apply to all firms providing products or services in China, the Draft Measures specifically regulate Providers.

The draft measures are open for public consultation until 14 February 2011.


The Draft Measures follow a high-profile dispute between Tencent Technology (Shenzhen) Limited, an internet service provider that operates the well-known instant messaging system known as "QQ" (Tencent), and Beijing Qihoo Technology Limited, renowned for its 360 line of security software (which includes software protecting internet user privacy and anti-virus software) (Qihoo 360).

The dispute arose on 3 November 2010 when Tencent announced its decision to make the use of QQ instant messaging service incompatible with the use of Qihoo 360's privacy or anti-virus software. Tencent also requested that users adopt Tencent's security software or other antivirus software in place of the 360 line of security software. Effectively, QQ users were forced to either uninstall QQ or 360's privacy guard.

The dispute was resolved on or about 10 November 2010, through mediation by MIIT together with two other ministries, and both Tencent and Qihoo 360 resuming their products' compatibility.

At the time, media commented that existing internet information service market regulations were vague and lacked guidance. Existing regulations predominantly refer to the PRC Telecommunication Regulations and the Administration Measures on Internet information Services, which generally state qualifications with which firms must comply to engage in the internet information services market. By contrast, the Draft Measures stipulate detailed provisions with respect to the administration of the internet information service market and competition between Providers.

Unfair competition

Five types of activities constitute unfair competition under the Draft Measures, including:

  • damaging the reputation of competitors by fabricating and disseminating false information or malicious rumours about competitors' legitimate products or services;
  • without reasonable justification, offering products or services that are incompatible with the legitimate products and services offered by other Providers or, where any incompatibility with existing products or services occurs due to non-human factors, failing to remind clients of such incompatibility or misleading or inducing clients to choose its products or services;
  • interfering with the operations of legitimate products or services installed in users' terminals provided by other Providers or, modifying contents or blocking information from the products or services offered by other Providers;
  • using any means to mislead, deceive, or compel users to uninstall or shut down other legitimate products or services; and
  • other activities contrary to the principles of fair competition.

Where a Provider queries the security or protection of private information or the quality of the products or service provided by other parties, such a Provider is required to report such conduct to a third-party organisation for evaluation. It is unclear what third parties will be authorised to provide such services. However, this approach eliminates a Provider's choice to independently conduct tests on queried products or services and publish its results. Further clarification on methods of review and establishment of objective standards by the relevant authorised third-party may be addressed in separate legislation in the future.

If a Provider is found to have conducted activities prohibited by the Draft Measures, the authorities may impose fines between RMB 100,000 and RMB 1 million or, in serious cases, suspend business operations.

Infringement of users' lawful rights and interests

Providers are prohibited from engaging in activities that will infringe users' legitimate rights and interests, including:

  • unilaterally refusing, delaying or ceasing to provide services to users without reasonable justification;
  • using any means to restrict users' ability to choose other Providers' products or services;
  • using false information to mislead or deceive users into accepting unfair service agreement terms or specific products of the Provider;
  • arbitrarily installing, operating, upgrading, or uninstalling software on users' terminals without users' consent or coercing users to adopt its internet information services;
  • not providing commonly-used installation methods or allowing executable code or other unnecessary files to remain after intentional un-installation;
  • without consent from users, altering browser or other key configurations, forcing users to visit particular websites or preventing access to the internet; or
  • other activities which will lead to infringement on users' right to knowledge or choice.

Furthermore, Providers must expressly inform subscribers when software has been bundled, provide obvious signs for closing pop-up advertisement windows and ensure that such windows do not reappear without proper reasons.

Fines between RMB 10,000 and RMB 100,000 may be imposed on Providers who violate these provisions. In serious cases, Providers may be ordered to suspend business operations.

Uncertainties in Draft Measures

No guidance has been provided as to what would constitute reasonable justification. Further, references are made to a large number of technology-related issues without supplementary explanation. For example, the extent to which a product or service would be considered "incompatible" to that of another or what would be considered a "commonly-used installation method" is open to debate. It is hoped that these uncertainties will be addressed through both the public consultation process and further details provided by the competent government authorities.

Dispute resolution among Providers

Where a dispute arises between Providers, the Draft Measures require that Providers engage in friendly consultation, industry association mediation or subject themselves to more formal proceedings coordinated by relevant government authorities.

Industry association mediation

Internet industry associations, which could include associations such as the Internet Society of China, are mandated under the new draft rules to establish institutions responsible for providing mediation services between Providers and to formulate and implement its own set of disciplinary rules. Mediations will then be conducted based on such rules, having regard to business ethics and the aim of protecting users' rights and sustaining a competitive internet industry.

Government coordination

Under the Draft Measures, MIIT and its provincial counterparts are now expected to supervise and coordinate the settlement of disputes between Providers. The authorities are to achieve this by providing fair and objective decisions (proffering resolution methods) to Providers with a view to promote the development of the internet industry, protect the legitimate interests of users and encourage innovation. Providers, in turn, are required to adopt the opinions delineated in the decision within a prescribed time period.

If considered necessary, MIIT and its provincial counterparts may appoint an authorised third party to conduct technical evaluations or seek the collective opinion of experts in relevant fields. Where either independently or through the use of approved third parties, the conduct of a Provider is found to have a negative social impact or an effect on safety management measures, MIIT and its provincial counterparts are authorised to ensure that any such negative impact is effectively addressed first before re-visiting the merits of the parties' dispute.

Notwithstanding the government's involvement, Providers in a dispute may settle matters themselves, however, they are thereafter required to file any such reconciliation measures.

Dispute resolution between user and Provider

Users may choose to address their complaints against Providers by submitting their grievance to the National Centre for Accepting Complaints from Telecommunication Users, who will then settle issues in accordance with the Provisional Measures for Settling the Complaints for Telecommunication Users. Alternatively, users may file a lawsuit against the Providers with the relevant people's court.


While on the one hand the proposed measures are linked with the recent Tencent dispute, they also highlight some important developments regarding internet regulation in China.

Firstly, they show the willingness of the authorities to intervene in commercial matters affecting consumers that have entered into the public domain. Secondly, anti-trust related rules will continue to be developed by sectoral regulators and not exclusively by the authorities primarily responsible for administration of the PRC Anti-Monopoly Law. That trend looks set to continue, particularly in sensitive sectors such as telecommunications and the media.

Providers concerned by the Draft Measures should take the opportunity provided by the MIIT to submit comments, although once regulations of this nature are published for public consultation it is likely that they will come into force in some form. Accordingly, internet service providers should monitor the development of the Draft Measures and commence steps to audit business practices to ensure that they do not act in such a way so as to offend the new draft regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions