According to Satya Nadella, CEO Microsoft, the pandemic has accelerated digital transformation by almost a decade. The digital era has come to be.
Globally, there has been a push toward more robust rules to protect consumer data and privacy, as well as to safeguard important information from corruption, compromise or loss, and China is no exception. Indeed, China’s regulatory framework on data protection is in the process of update and there has been significant progress in the field of data protection legislation in recent years.
The new Civil Code, which entered force on 1 January, 2021, specifies the definition scope, protection requirements, civil liability, relevant rights of natural persons and other contents of the right to privacy, as well as the protection of personal information in eight articles.
Moreover, two additional and fundamental pieces of legislation are expected to be enacted this year; Data Security Law and Personal Information Law. Together with the Cybersecurity Law already in force, these will constitute the essential legislative references for data protection.
While the Data Security Law will establish various basic systems for the administration of data security protection, the Personal Information Protection Law, being the first special law on the protection of personal information of China, will introduce a more complete, comprehensive and systematic legal protection system for personal information.
The great attention given to data protection is also reflected by certain trends which are aimed at increasing the security standards and strengths of protections in many respects.
For instance, the supervision and law enforcement activities on the protection of personal information, as processed by mobile Applications (APPs), continues to strengthen. In addition to cracking down on the illegal collection and use of personal information by APPs, the regulatory authorities also properly extend the same regulatory rules to applet programs and so-called “mini-programs”, which also fall under the regulatory scope.
Secondly, data protection rules in various industries shall be further detailed. Relevant industries and fields will further formulate personal information protection regulations closely related to their industries. For example, The People’s Bank of China has recently promulgated the Interim Measures for the Protection of Personal Financial Information, outlining the requirements applicable to the life cycle of personal financial information collected and processed by regulated financial entities and other institutions that process personal financial information.
Last but not the least, the importance of data antitrust is becoming more clear. On November 10th, 2020, the State Administration for Market Regulation (“SAMR”) promulgated the Anti-monopoly Guidelines in the Field of Platform Economy (Draft for Comment).
On the one hand, the Guidelines prohibit platforms from making use of data and algorithms to reach monopoly agreements and prohibit platform operators from controlling data and other necessary facilities for platform economy and refusing to trade with counter parties on reasonable terms. On the other hand, the Guidelines regulate the abuse of users’ personal information by platforms by taking advantage of their dominant position. It is noteworthy that on 10 April, China’s State Administration for Market Regulation fined Alibaba ¥18.23 billion, in an anti-monopoly investigation that began in December 2020. The case signals the regulatory authorities will further strengthen the overall trend of anti-monopoly supervision in the field of platform economy.
All of these trends reflect a sensibility on the protection of personal data in the digital era, to which companies shall pay much attention for compliance, in order to avoid legal liabilities and severe administrative penalties, especially in the financial sector and other strongly regulated fields in which enforcement is strict.
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This article is intended solely for informational purposes and does not constitute legal advice. Although the information in this article was obtained from reliable, official sources, no guarantee is made with regard to its accuracy and completeness. For more information please visit dandreapartners.com or WeChat: dandreapartners
