China's first online sales regulation holds trading platforms liable

HANGZHOU -- Consumers who receive shoddy goods from online purchases can now hold trading platforms responsible, according to China's first regional regulation on online sales issued on Thursday.

The Provisional Regulation on Online Sales Management gives consumers the right to ask e-commerce trading platforms to help settle their disputes with online businesses over unsatisfied purchases.

E-commerce companies will be obliged to address to such applications within 7 days. Otherwise, they could face a fine between 1,000 yuan ($159.7) and 10,000 yuan.

The regulation was issued on Thursday in Hangzhou, capital of east China's Zhejiang Province, which is home to a number of China's e-commerce heavyweights such as Alibaba. It will take effect May 1.

Alibaba's C2C online shopping platform of Taobao.com and its B2C platform Tmall jointly register 9 million online businesses so far.

E-commerce, especially the C2C-mode of Taobao.com, has made it easy for individual start-ups. However, complaints over shoddy commodities from online shopping were previously up to the consumer to resolve with the business.

From May 1, all online businesses are required to make commercial registration at e-commerce trading platforms. Online shops that are found threatening consumers so they alter negative comments or cancel a complaint will be fined between 20,000 yuan and 30,000 yuan.

According to Zhang Mao, minister of the State Administration for Industry and Commerce (SAIC), the reason of so many e-commerce market violations is that the current cost of breaking the rules is too low.

The market will fundamentally improve if companies find such costs unaffordable, Zhang said on Monday.

Online transactions via Alibaba's e-commerce platforms in 2014 topped 2 trillion yuan, up from 1.8 trillion yuan in 2013. However, the number of consumers' complaints concerning online purchasing also rose by 65.63 percent year-on-year in 2014 to reach 22,334.