Notice of the Shanxi Provincial Market Supervision Administration on Issuing the Guiding Opinions on Regulating the Business Behavior of Online Community Group Buying

Shanxi Provincial Market Supervision Administration

Issuing the "About Regulating Online Community Group Buying"business

Notice of guidance on behavior

Jin City Supervision and Regulation Fa [2023] No. 10

Municipal market supervision bureaus and demonstration zone market supervision bureaus:

The "Guiding Opinions on Regulating the Business Behavior of Online Community Group Buying" has been deliberated and adopted at the 15th Director’s Office Meeting of the Provincial Market Supervision Bureau on June 30, 2023, and is hereby issued to you. Please implement it conscientiously.

Shanxi Provincial Market Supervision Administration

July 14, 2023

(This article is published publicly.)

aboutGuiding Opinions on Regulating the Business Behavior of Online Community Group buying

In order to standardize the business behavior of online community group buying, protect the legitimate rights and interests of consumers, maintain the order of online transactions with fair competition, and promote the standardized and healthy development of online community group buying, according to relevant laws and regulations, the following opinions are put forward.

I. General requirements

Guided by the Supreme Leader’s Thought on Socialism with Chinese Characteristics for a New Era, conscientiously study and implement the spirit of the 20th National Congress of the Communist Party of China, fully implement the spirit of the Supreme Leader’s General Secretary’s important instructions on platform economic governance, conscientiously implement the strategic layout and deployment requirements of the Provincial Party Committee and the Provincial Government to build "Digital Shanxi" to achieve "digital transformation", fully grasp the characteristics, laws and development trends of online community group buying, adhere to inclusiveness and prudence, supervision according to law, and coordinated governance, actively explore suitable network community group buying characteristics, and facilitate fair competition in the online market supervision methods, realize the whole chain, all fields, and normalized supervision before and after the event, and promote the healthy and sustainable development of online community group buying norms.

II. Compaction of relevant subject responsibilities

(1) Compacting the responsibility of online community group buying platform operators

1. Fulfill the obligation of market entity registration according to law. Online community group buying platform operators may carry out online community group buying business activities in a self-operated or non-self-operated manner. Platform operators who sell goods or provide services in their own name are self-operated by the platform and shall handle the registration of market entities according to law and bear the civil liability of commodity sales or service providers. Where trading activities need to obtain relevant administrative licenses, they shall obtain administrative licenses according to law before engaging in business activities. Where trading activities require filing, they shall go to the regulatory authority for filing according to law.

Platform operators who carry out online community group buying in a non-self-operated manner shall, in accordance with the Electronic Commerce Law of the People’s Republic of China and other laws, register the platform operators as market entities, and fulfill the responsibilities and obligations of platform operators according to law.

2. Fulfill the obligation of information disclosure according to law. Online community group buying platform operators shall continue to publicize business license information, administrative license information related to their business operations, or link logos of the above information in a prominent position on the homepage.

If online community group buying is carried out in a non-self-operated manner, the actual seller of the product or the actual provider of the service shall be accurately marked to ensure that consumers can view the main information of the actual seller or service provider on each product or service page. If the platform operator fails to indicate or completely indicate the actual seller of the product or the service provider, causing consumers to mistakenly believe that it is the platform operator’s own operation, the platform operator shall bear the corresponding legal responsibility.

Platform operators shall provide technical support for suppliers to fulfill their information disclosure obligations, and urge suppliers to fulfill their information disclosure obligations in accordance with Article 15 of the Electronic Commerce Law of the People’s Republic of China and Article 12 of the Measures for the Supervision and Administration of Online Transactions.

3. Carry out promotions and publicity in compliance with the law. Platform operators shall standardize the organization of online community group buying promotions and related publicity, comply with the requirements of the Interim Provisions on Regulating Promotional Behaviors, and publicize the time limit, method, rules and unfavorable restrictions on consumers in a prominent manner on the webpage.

Platform operators should standardize information release behavior, strictly abide by the "People’s Republic of China Electronic Commerce Law", "People’s Republic of China Advertising Law", "Internet Advertising Management Measures" and other provisions to release information, and shall not deceive or mislead consumers with false or misleading information.

Platform operators shall take measures to prevent and stop illegal advertisements in the process of providing Internet information services, and monitor and investigate the advertising content released by cooperative suppliers using their information services. If illegal advertisements are found, they shall take necessary measures such as notifying corrections, deletion, blocking, and disconnection of published links to stop them, and retain relevant links.

4. Strictly fulfill the obligation of review and verification. Operators of online community group buying platforms shall strengthen the review of business qualifications and commodity certification documents of cooperative suppliers, establish and implement a purchase inspection and acceptance system, and verify product qualification certificates and other marks. When conditions permit, encourage on-site inspections of suppliers’ business sites and production environments.

Platform operators shall require suppliers to provide information such as identity certificates, business licenses, administrative licenses, business addresses, and contact information, and conduct verification and registration, establish registration files, and regularly verify and update them.

Platform operators who conduct online community group buying in a non-self-operated manner uniformly collect order information, collect goods, sort and pack and deliver them to the pickup point, platform operators shall conduct necessary inspections of the goods, and at the same time ensure that the containers, tools and equipment for storing, transporting and loading and unloading food are safe, harmless, kept clean, prevent food contamination, and meet special requirements such as temperature and humidity required to ensure food safety. Food shall not be stored or transported together with toxic and harmful substances. Platform operators who know or should know that the goods sold by suppliers do not meet the requirements for protecting personal and property safety, or have other acts that infringe on the legitimate rights and interests of consumers, and fail to take necessary measures shall be jointly and severally liable with the cooperative supplier according to law.

Platform operators should strengthen the supervision of food safety and improve the food safety management system. The product traceability system should be improved according to the requirements of different categories.

5. Strictly implement the requirements for the protection of consumer rights and interests. Platform operators shall establish and improve a credit evaluation system, provide consumers with a way to evaluate the quality of goods or services sold on the platform and the platform, and shall not hide or delete consumer evaluations. Where consumer evaluations contain information prohibited by laws, administrative regulations and rules from publishing or transmitting information, the platform may deal with it technically according to law. Encourage and guide online community group buying platforms to make use of their own resources and management advantages, and take the initiative to publicize to the public the number of complaints, complaints mediation, reconciliation success rate and other information related to safeguarding the legitimate rights and interests of consumers among operators on the platform.

Platform operators and suppliers shall strictly implement Article 25 of the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests and the Interim Measures for the Return of Goods Purchased Online within Seven Days without Reason, and implement the return of goods within seven days without reason. If consumers request a return within seven days from the receipt of goods, except for goods that cannot be returned without reason according to laws, regulations and rules, the platform and suppliers shall accept the consumer’s return request. Platform operators shall urge and guide suppliers to fulfill the obligation of returning goods without reason within seven days, conduct inspection and supervision, and provide technical support.

Platform operators shall establish a convenient and effective consumer complaint mechanism, disclose information such as complaint methods and complaint channels, accept and handle consumer complaints in a timely manner, and shall not refuse or deliberately delay processing consumers’ reasonable requests without reason.

Encourage and guide platform operators to establish an advance payment system and safeguard measures. When the legitimate rights and interests of consumers are infringed and cannot be compensated, the platform operator shall make advance compensation to the consumer. After the platform operator compensates the consumer, it may recover compensation from the cooperative supplier and the pickup point according to law.

Online community group buying operators (including online community group buying platforms and suppliers) shall fulfill their safety protection obligations to consumers in accordance with the Law of the People’s Republic of China on the Protection of Consumer Rights and Interests. Platform operators who know or should know that the goods sold or services provided by suppliers do not meet the requirements of personal and property safety, or have other acts that infringe on the legitimate rights and interests of consumers, and fail to take necessary measures, shall bear joint and several liability with the supplier according to law.

6. Strictly implement information security responsibilities. Platform operators shall, in accordance with the relevant provisions of cyber security, improve the cyber security management system, implement security protection technical measures, and ensure information security. Platform operators shall comply with the relevant requirements of the Personal Information Protection Law of the People’s Republic of China, and shall not force, frequently, or excessively request user permissions to illegally collect or use consumers’ personal information; Lawfully obtained consumers’ personal information and the trade secrets of other operators shall be kept strictly confidential, and shall not be disclosed, and shall not be provided to others without the consent of the collected person, and shall take necessary measures to prevent the leakage or loss of the obtained information; in the event of or possible leakage or loss of information, remedial measures shall be taken immediately.

After the user terminates the use of its services, the platform operator shall stop the collection and use of the user’s personal information, provide the user with the service of canceling the account, and publicize the cancellation method to the user on the online platform.

7. Strictly implement intellectual property protection obligations. Platform operators shall establish intellectual property protection rules and operate them effectively to protect intellectual property rights in accordance with the law. Platform operators who know or should know that suppliers infringe intellectual property rights shall take necessary measures such as deletion, blocking, disconnecting links, and terminating transactions. Failure to take necessary measures shall be jointly and severally liable with the supplier.

8. Fulfill the obligation of information retention and cooperation supervision according to law. Platform operators shall record and preserve the information on goods and services and transactions published on the platform, and ensure the integrity, confidentiality and availability of the information. The retention time of goods and service information and transaction information shall not be less than three years from the date of completion of the transaction; where laws and regulations provide otherwise, follow their provisions.

When conducting investigations, evidence collection, and other work in accordance with the law, the supervision department requires the platform operator to provide the identity information of suppliers, relevant contracts signed, commodity and service information, transaction information, and statistical data published on the platform, it shall provide, assist, and cooperate. It shall not conceal, prevaricate, obstruct, or refuse.

Platform operators who carry out online community group buying in a non-self-operated manner shall actively cooperate when the regulatory authorities implement commodity sampling inspections, and shall not refuse on the grounds that they do not have ownership of the commodities.

(2) Compaction network community group buying supplier responsibility

9. Obtain business qualifications in accordance with the law. Online community group buying suppliers refer to operators who cooperate with platform operators to sell goods on the platform in their own name, and shall fulfill the obligations of operators on the platform in accordance with the "E-commerce Law of the People’s Republic of China". Suppliers shall go through the registration of market entities in accordance with the law, obtain business licenses and business qualifications for related commodities, and engage in business operations within the scope of business projects. Except for the circumstances of "exemption from registration" in Article 10 of the "E-commerce Law of the People’s Republic of China".

Online community group buying suppliers shall actively cooperate with platform operators, take the initiative to fulfill information publicity obligations in accordance with Article 15 of the E-commerce Law of the People’s Republic of China and Article 12 of the Measures for the Supervision and Administration of Online Transactions, and ensure that consumers can view business license and administrative license information on each product or service page. If the information announced by the supplier changes, the change shall be reported to the platform in a timely manner within 3 working days, and the platform shall complete the verification and update the publicity within 7 working days.

10. Strictly implement food safety responsibilities. Online community groups buying and selling food to suppliers should strictly abide by the relevant provisions of the Food Safety Law of the People’s Republic of China, fulfill the main responsibility of food safety, and improve the relevant food safety systems.

11. Strictly implement product quality and safety responsibilities. Online community groups buying goods sold by suppliers or providing services shall meet the requirements for ensuring personal and property safety, have the performance that the product should have, meet the execution standards indicated on the product or its packaging, and meet the quality conditions indicated by product descriptions, physical samples, etc. It is not allowed to sell counterfeit and shoddy goods and goods that are prohibited from trading or operating on the Internet by laws and regulations.

12. Strictly implement information disclosure obligations. Online community group buying suppliers shall fully, truthfully, accurately and timely disclose product information, including the content of product labels and labels, to protect consumers’ right to know and choose. Online community group buying suppliers shall issue purchase certificates or service documents in accordance with relevant state regulations or business practices. Applications from consumers for shopping certificates or service documents shall not be rejected or attached to conditions.

(3) Compact the responsibility of online community groups buying offline pickup points

13. Have storage conditions. Online community group buying offline pickup points refer to places that cooperate with community group buying platform operators to provide short-term storage and storage of goods, handle pickup for consumers, and assist the platform in providing after-sales services for users. Natural persons and operators who serve as pickup points shall have storage conditions. Commodities with special requirements for temperature and humidity (such as food, edible agricultural products, etc.) shall be equipped with corresponding facilities and equipment (such as refrigeration and freezing equipment, shelves, etc.) and meet food safety requirements. Encourage online community group buying platform operators to develop operators who have obtained business licenses and food business administrative licenses as pickup points.

Prohibition of online community group buying

14. No improper price behavior shall be implemented. Online community group buying operators shall strictly regulate the online community group buying business behavior, reasonably formulate commodity prices according to market conditions, and shall not implement unfair price behaviors such as low-price dumping, price collusion, price gouging, and price fraud.

15. Monopoly shall not be carried out illegally. First, monopoly shall not be carried out through monopoly agreements. Online community group buying operators with competitive relations shall not reach monopoly agreements to implement fixed prices, divide the market, restrict production (sales) volume, restrict new technologies (products), and boycott transactions. Second, they shall not abuse their dominant market position to exclude or restrict competition. They shall not abuse their dominant market position by predatory pricing without justifiable reasons, refusing to trade, tying sales, restricting operators to engage in "two choices" among competitive platforms, and other acts of abusing their dominant market position to exclude or restrict competition. Third, they shall not illegally implement concentration of business operators to exclude or restrict competition.

16. No unfair competition shall be carried out. Community group buying operators shall operate in accordance with the law and compete fairly, and shall not engage in unfair competition such as commercial confusion, commercial slander, and credit speculation. They shall not use technical means to damage the competition order, hinder the normal operation of other market entities, and endanger the market environment of fair competition.

17. Do not use false or misleading methods to deceive and mislead consumers. Online community group buying operators and pick-up point staff shall not fabricate, delete, conceal, induce, force consumer evaluations, or confuse consumer evaluations of different goods (including services, the same below); shall not use false or misleading prices to deceive or induce consumers to trade with them; shall not use false advertising, promotion methods, samples, instructions, standards, certification qualifications and other information to mislead consumers; shall not use false or misleading methods such as fictitious spot, false reservation, false panic buying, etc.

Investigate and punish illegal acts of online community group buying according to law

18. Investigate and deal with e-commerce violations according to law. In response to issues such as the failure to implement the responsibilities of online community group buying platform operators, in accordance with Articles 76, 80, 81 and 83 of the E-Commerce Law of the People’s Republic of China, platform operators shall be investigated and dealt with for failing to fulfill their obligations of information disclosure and information preservation, failing to take necessary measures for platform operators to infringe on consumer rights and interests, failing to fulfill their obligations of qualification review for platform operators, and failing to fulfill their obligations of security protection for consumers.

19. Investigate and punish violations of the legitimate rights and interests of consumers according to law. In response to the infringement of the legitimate rights and interests of consumers in online community group buying, according to Article 56 of the Consumer Rights Protection Law of the People’s Republic of China, focus on investigating and punishing consumers’ requests for replacement, return, replenishment of goods, refund of payment and service fees or compensation for losses, intentional delay or unreasonable refusal and other illegal acts.

20. Investigate and punish monopoly violations according to law. In response to the illegal implementation of monopoly in online community group buying, according to Articles 56, 57 and 58 of the Antimonopoly Act of the People’s Republic of China, focus on investigating and punishing illegal acts such as reaching monopoly agreements, abusing market dominance, and implementing concentration restrictions and excluding competition.

21. Investigate and punish illegal acts of unfair competition according to law. In response to issues of unfair competition such as fictitious transactions, deception, and misleading consumers in online community group buying, according to Articles 18 and 20 of the Anti-Unfair Competition Law of the People’s Republic of China, focus on investigating and punishing illegal acts such as false or misleading propaganda and confusion.

22. Investigate and deal with advertising violations according to law. According to Article 55 of the Advertising Law of the People’s Republic of China, focus on investigating and dealing with online community group buying platforms and platform operators publishing false advertisements that deceive and mislead consumers.

23. Investigate and punish food safety violations according to law. In response to food safety issues in online community group buying, according to Article 126 of the Food Safety Law of the People’s Republic of China, focus on investigating and punishing illegal acts such as unqualified sales of food and failure to establish a purchase inspection system.

24. Investigate and deal with product quality violations according to law. In response to issues such as the sale of counterfeit and shoddy products in online community group buying, in accordance with Articles 49, 50, 51, 52, and 54 of the Product Quality Law of the People’s Republic of China, focus on investigating and punishing illegal acts such as adulteration in products, falsification, shoddy, and substandard products as qualified products.

25. Investigate and deal with unfair price practices according to law. For unfair price practices such as low-price dumping, price collusion, price gouging, and price fraud, they shall be investigated and dealt with in accordance with Articles 14 and 40 of the Price Law of the People’s Republic of China and other laws and regulations.

26. Investigate and punish intellectual property violations according to law. For the infringement of intellectual property rights by online community group buying platforms and suppliers, according to the "Electronic Commerce Law of the People’s Republic of China"And relevant laws, regulations and rules on intellectual property protection shall be investigated and dealt with in accordance with the law.

Local market supervision departments should attach great importance to the supervision of online community group buying and other new forms of online transactions, supervise and guide online community group buying platforms to fulfill their main responsibilities in accordance with the law, take the initiative to carry out self-examination and self-correction, and thoroughly rectify relevant problems in a timely manner. It is necessary to strengthen organizational leadership, give full play to comprehensive law enforcement advantages, and coordinate the strength of various business lines to effectively improve the efficiency and level of online community group buying supervision.

This opinion will come into force on August 15, 2023 for a valid period of 5 years.