China Monthly TMT Update - September 2019

The Cyberspace Administration of China issues the Draft Administrative Measures for Credit Information on Seriously Dishonest Subjects Offering Internet Information Services

The Cyberspace Administration of China (“CAC”) issued the Draft Administrative Measures for Credit Information on Seriously Dishonest Subjects Offering Internet Information Services (“Draft”) on 22 July 2019.

Under the Draft, 'seriously dishonest subjects offering internet information services' refers to subjects (each a "Subject") that are found to conduct seriously dishonest behaviour with regards to the provision or usage of internet information within the territory of China. If a Subject is a legal entity, the Draft will apply to the legal entity, the legal representative of the entity and other directly responsible persons.

The Draft publishes a list of behaviours which constitute seriously dishonest behaviours and, when violated, places a Subject on a blacklist. A Subject is considered seriously dishonest and placed on the blacklist if (i) it commits serious violation of relevant laws and regulations on internet information content management, or refuses or fails to perform such administrative punishment as required within a prescribed time limit; or (ii) if it fabricates or spreads information in violation of social morality, business ethics, honesty and credibility, or deliberately provides technology, equipment support or other services to facilitate such activities, and thus seriously disrupting the cyberspace communication order. The Draft also stipulates less serious offences which, when violated, will place a Subject on a “key-concern list”.

The credit information of a Subject will be integrated into the social credit system and affect the Subject's overall credit rating. As a result, joint sanctions by different government authorities might be imposed on the Subject.

Please click here to read the full text (Chinese only) of the Draft.

The Ministry of Science and Technology issues the Working Guidance for the Establishment of National New Generation AI Open Innovation Platforms

The Ministry of Science and Technology of the PRC (“MST”) issued the Working Guidance for the Establishment of National New Generation AI Open Innovation Platforms (“Guidance”) on 1 August 2019.

The Guidance provides that one National New Generation AI Open Innovation Platform (“Platform”) shall be established in each critical area that is specified in the New Generation AI Development Plan and where there are active demands for the relevant applications in practice.

A Platform shall (i) be equipped with outstanding technological ability and shall influence innovation in the industry, and play a leading role in the AI industry; (ii) have the technological foundation and service capacity to provide open services to society and enable the sharing of such services, be able to integrate various resources, equip participants with fast external service and information, reduce barriers to industry research, development and usage, and drive the development of small-to-medium enterprises; (iii) receive continuous investment of capital, human resources and infrastructures from the leading participants that commit to operate Platforms; and (iv) have clear and accessible open service operation systems; and have sustainable operation mechanisms that support the Platforms.

Please click here to read the full text (Chinese only) of the Guides.

The Ministry of Science and Technology issues the Measures in Support of Faster Innovative Development of Technology Oriented Small and Medium Sized Enterprises in the New Era

The Ministry of Science and Technology of the PRC (“MST”) issued the Measures in Support of Faster Innovative Development of Technology-Oriented Small and Medium-Sized Enterprises in the New Era (“Measures”) on 5 August 2019.

The Measures are designed to encourage participants to engage in establishing start-up companies, in particular, the Measures encourage high level foreign experts who have obtained Chinese permanent residency cards to engage in establishing start-up companies, and they shall enjoy national treatment as Chinese citizens. The state will also implement tax incentives and provide financial support for technology oriented small and medium enterprises. In addition, the state encourages technology oriented small and medium enterprises to cooperate with foreign entities and strengthen the one belt one road initiative.

Please click here to read the full text (Chinese only) of the Measures.

The National Information Security Standardization Technical Committee issues a draft of the Information Security Technology - Basic Specification for Collecting Personal Information in Mobile Internet Applications

The National Information Security Standardization Technical Committee (“TC260”) issued a draft regulation entitled Information Security Technology - Basic Specification for Collecting Personal Information in Mobile Internet Applications (“Draft Specification”) on 8 August 2019.

The Draft Specification imposes both management and technical requirements on mobile internet application (“App”) operators (each an “Operator”) when they collect and process personal information. For example, where a user opts for the minimum types of personal information to be collected by the Operator, the Operator must not collect more information than agreed, and cannot refuse to provide services in response to the user’s refusal to provide extra personal information. Prior to the sharing or transfer of any personal information, the Operator must obtain express consent from users. Unless necessary for security reasons, the App must not collect unique device identifiers. An operator shall also be responsible for third party code or plug-ins that collects persona information via its App. After a user terminates certain categories of services, the personal information collected solely for the provision of such services shall be deleted or anonymised. A user shall be granted with access to his personal information and parties with whom his personal information is shared.

In addition, the Draft Specification also includes a list of the minimum types of personal information that can be collected by the operators of 21 categories of services commonly provided via Apps (e.g. map navigation, car hailing, instant messaging, blog forum, online payment, news information, online shopping, etc.)

Please click here to read the full text (Chinese only) of the Draft Specification.

The Cyberspace Administration of China issues the Provisions on the Cyber Protection of Personal Information of Children

The Cyberspace Administration of China (“CAC”) issued the Provisions on the Cyber Protection of Personal Information of Children (“Provisions”) on 23 August 2019, which will come into effect on 1 October 2019.

Under the Provisions, children refers to minors under the age of 14 ("Children"). The Provisions require that network operators and online service providers (“Operators”) shall establish designated personal information protection rules of Children and user agreements, and name a designated person to take charge of the protection of personal information of Children. Operators must obtain consent from the guardians of Children in order to collect, use, store, transfer or disclose personal information of the Children, and must provide refusal options at the same time. Operators must not collect information that is irrelevant to the service provided. Operators must not store personal information of Children for longer than necessary and must take encryption measures to ensure the storage safety of the personal information of Children. If Operators use any personal information beyond consent, they must re-obtain consent from the guardian of the Children.

If Operators entrust any other third party to process the personal information of Children, they must conduct a security assessment on the third party and on its activities, execute agreements to allocate responsibility between them, and the entrusted activities cannot exceed the scope authorized.

Please click here to read the full text (Chinese only) of the Provisions.