China To Impose Code of Conduct For Live-Streaming E-Commerce in July

June 30, 2020 10:15 pm

Beijing (PingWest)- Chinese regulators are ramping up its efforts to regulate its booming livestream e-commerce market with a code of conduct that will take effect on Wednesday.

The China Advertising Association (CAA) issued a notice last week urging content censorship and real name user registration from both merchants and individual livestreamers

The initiative aims to erase issues in the sectors such as false and misleading advertisement made by livestreamer.

Many livestreamers have used exaggerated or even false advertisement to boost product sales as they endorse third party products and service for a fee. The CAA code of conduct, which will take effect on Wednesday (July 1), order livestreamers to comply with laws and guarantee that descriptions about the product is comprehensive, truthful and accurate. Any statements that mislead consumers about product and services are not allowed.

Platforms that host livestream sessions should take responsibility of training for its hosts and censoring the interactions between livestreamers and users, according to the notice.

Prior to CAA, another regulatory body, the Professional Committee of Media Shopping of China General Chamber of Commerce also drafted a set of industry standards and guidelines to regulate live-streaming e-commerce earlier this month.

The tighter regulation for live-streaming e-commerce comes after users filed a large amount of complains about live-streaming shopping to China Consumer Association (CCA). The complaints were divided into a few categories including low product quality, fake delivery orders, and a lack of after-sale service.

A report on consumer satisfaction on live streaming e-commerce released by the China Consumer Association on March 31, 2020, indicated that 37.3% of consumer surveyed had encountered problems in live streaming e-commerce.

“Live streaming solves the problem of supply and marketing for enterprises, but once problems occur, it’s difficult to protect consumers’ rights due to the lack of management standards and supervision mechanisms,” said Li Yougang, deputy director of the Expert Committee formulating the Group Standards.

Last week, China has imposed penalties on 10 of the country’s most popular live-streaming platforms including Douyu, Huya, ByteDance’s Xigua Video for spreading low-taste content, as China issue tighter regulation on one of most popular internet sectors that has flourished since the outbreak of the Covid-19 outbreak.

After investigating 31 live-streaming platforms, Chinese regulator found out that these platforms have allowed vulgar and other low-taste content to circulate, citing indecent and otherwise uncovered dress codes and naughty language used by some female and male live-streamers.

The regulator said it would impose penalties ranging from freezing content updates on main channels to suspending new user sign-ups, and would blacklist some of the offending livestreamers.

The value of China’s live-streaming market reached CNY433.8 billion in 2019 and it is expected to grow more than double in size this year, according to a report by data analysis firm iiMedia Research in February.