Beijing
, China
–February 10, 2011
The Section of Antitrust Law (“Antitrust Section”) and the Section of International Law (together, the “Sections”) of the American Bar Association (“ABA”) respectfully submit these comments on the Interim Measures for Supervision and Management of the Internet Information Service Market (Draft for Comment) (“Interim Measures”), of China’s Ministry of Industry and Information Technology (“MIIT”) published for comment on January 12, 2011.The Sections recognize and appreciate the substantial thought and effort of MIIT reflected in the Interim Measures. The Section welcome the opportunity provided by MIIT to offer these comments, and hope that they may be of assistance.
The Sections focus in these comments on general principles relating to Chapter 2 of the Interim Measures, instead of on specific implementation suggestions. This is because the Sections believe that the technology and marketplace are evolving so quickly that it would generally be premature to suggest specific approaches.
The Sections respectfully suggest that MIIT clarify (1) whether the Interim Measures apply to providers of Internet broadband and wireless services only, or also to providers of Internet content, and (2) whether the Interim Measures apply to all providers, including those that are too small or too limited to be regarded as having any market power. The burdens on businesses and the benefits to consumers will differ significantly according to the type of provider affected by the Interim Measures.
The Sections respectfully suggest that MIIT consider the important goal of achieving consistency in the competition rules that apply to all sectors of China’s economy when finalizing the articles of the Interim Measures relating to competitive conduct. The goal of consistent competition law and policy is particularly important in the areas of interoperability requirements, which are addressed in Article 6 of the Interim Measures, and unilateral refusals to deal, which are addressed in Article 8. There may be significant costs and other difficulties when both competition agencies and sectoral regulators enforce competition laws, particularly when the authorities and regulators apply different or even conflicting competition rules. These costs include duplicative expenditure of scarce resources by the government, as well as uncertainty for businesses. At this early stage in the development of China’s competition rules and institutions, there is the unique opportunity to avoid many of the significant pitfalls and costs that resulted in the United States and other jurisdictions when businesses are faced with multiple agencies exercising concurrent authority and multiple proceedings over enforcement of competition rules.
The Sections also respectfully suggest that MIIT clarify whether it is creating an exemption or immunity from the Anti-Monopoly Law for Internet information services or any other industries and/or conduct under MIIT’s jurisdiction. The Sections encourage MIIT to be explicit and transparent about the relationship between its regulations and those of the Anti-Monopoly Enforcement Authorities. We urge that the competition rules established in the AML continue to apply to Internet information services, consistent with the Interim Measures.
The Sections applaud MIIT’s efforts to prevent unfair competition on the Internet. They respectfully suggest that MIIT consider incorporating an “intent” or “acting with knowledge” requirement for prohibited practices, or consider providing some safe harbors for website operators with respect to content posted by third-party users. The Sections also would welcome clarification about what constitutes “proper reasons” under the proposed Code of Conduct set forth in Chapter 2 of the Interim Measures.
Protecting subscriber privacy is an important goal. The Sections suggest that the Interim Measures define “subscriber” and set forth the obligations of IISPs to former subscribers whose information remains in the IISP’s control. We also respectfully suggest that MIIT consider further how to balance the need to protect the privacy of subscriber information with the needs of businesses to use such information to complete online transactions and provide services that subscribers seek. The Sections respectfully suggest that greater flexibility in the type and level of consent required, depending on the nature of the situation and the specific types of information concerned, would help achieve a better balance. More sensitive information may require express, specific consent for disclosure while other types of information may be sufficiently protected by implied consents for certain uses. Finally, the Sections respectfully recommend that the Interim Measures require retention of sensitive personal information for limited periods of time, instead of an indefinite period. A limited retention requirement would be more consistent with similar policies adopted by many other jurisdictions and decrease the compliance burden for those IISPs that operate in multiple jurisdictions while also decreasing the risk that data could be misused.
Lehman, Lee & Xu can provide expert legal representation and counsel throughout the investment process. Beyond contract drafting, the firm can also perform due diligence on Chinese firms and projects, provide corporate and tax counsel on the structure and operation of an investment, from mere CERs purchase deal, to direct engagement in the project development with a Chinese partner, or to technologies sales/licensing and equity injections in project companies. For more information about the firm, please visit our website at
www.lehmanlaw.com
.