On September 10, the Cyberspace Administration of China (CAC) released draft Network Ecosystem Governance Regulations (“regulations”), which are open for public comment until October 10. USCBC is considering a submission to CAC on the regulations, and is interested in receiving input from member companies to incorporate into the possible submission. If you are interested in providing input, please contact Matt Margulies ([email protected]) and Antonio Douglas ([email protected]) by Tuesday, September 24.
The draft regulations, which call for “creating a culturally healthy and friendly network ecosystem, and a system that disposes of illegal and undesirable information and activities on the internet,” are broad in scope, and have potentially significant implications for companies operating in China. The regulations delineate content that is prohibited and encouraged for the following four classes of network entities in China:
- network information content producers,
- network information content service platforms,
- network information content users, and
- internet industry organizations.
While these entities are broadly defined (Article 41), the draft regulations do state that the primary subjects of this regulation are governments, companies, society, and internet users—indicative of likely comprehensive application across China.
Encouraged and Prohibited Behaviors Requiring Compliance are Broad
Encouraged and prohibited content is distinguished separately between each class of network entity, but some key content that could be subject to compliance for producers and platforms include:
- Content that contains information that opposes basic principles of the Chinese constitution, damages national security, reveals state secrets, harms China’s reputation or interests, spreads false information, promotes terrorism
- Content that disseminates false information and disrupts economic and social order
- Other content prohibited by laws and administrative regulations
- Content that promotes Socialism with Chinese characteristics
- Content that assists with efforts that increase China’s international influence
- Content that highlights the development of the Chinese economy and society
- Content that disseminates “Xi Jinping Thoughts on the New Era of Socialism with Chinese Characteristics”
- Content that spread’s the Party's theoretical thinking and decision making
The framework of these content restrictions in fact can be traced back to State Council information management measures from the year 2000. However, the scope is now greater and compliance burdens and costs are potentially much higher.
Non-Compliance may be Costly
Non-compliance with the draft regulations’ content restrictions, if ultimately adopted, may prove costly for companies. The regulations indicate “the dissemination, publication, and copying of prohibited content provisions may result in fines between RMB 100,000-500,000 for network information service platforms.” It’s not clear if that is on a per violation basis, or how each instance of a violation will be treated.
Enforcement bodies may also have the right to suspend or revoke business licenses for violators that do not take corrective actions.
Oversight and Enforcement through the Interagency
The draft regulations indicate that network governance will be handled by an interagency group of ministries and agencies including: the National Radio and Television Administration, and the State Council’s education, telecommunications, public security, culture, and market regulation authorities. The interagency process will be overseen and coordinated by CAC.