New Chinese Law on Online Algorithmic Recommendation Systems: Effective from March 1, 2022
On March 1, 2022, the "Internet Information Service Algorithmic Recommendation Management Provisions" came into force.
In compliance with the new regulation, all algorithmic recommendation practices by information society providers and other digital platforms that imply a danger to national security, influence public opinion or entail a restriction of the freedom of consumers or their discriminatory treatment are prohibited.
In this sense, for example, the practices of "algorithmic pricing" are prohibited, that is, the cases in which it is an artificial intelligence system to automatically determine the price of a service on the basis of the processing of data such as the characteristics of the consumer or the consumption habits.
It is also forbidden to create false accounts, generate and disseminate fake news and promote addictive online content, as operators must provide for a series of security measures and clear information for the consumer.
Social networks and e-commerce platforms must clearly inform their users about sponsored content and marketing profiling practices, offering the possibility for the consumer to refuse to display such content and to be subject to profiling.
Other particular precautions must be taken towards elderly, in particular with regard to the prevention of online fraud.
A series of rules for digital platforms and other online operators are also established. The penalties for non-compliance with these rules consist of fines from 10,000 to 100,000 RMB (equal to 1.439,77 a 14.397,7 Euro) and the withdrawal of the license to operate online or the prohibition order to register new users or to closing order of the app or website.
The supervision of compliance with these regulations is entrusted to a coordinated action between the Cyberspace Administration of China (CAC), the Ministry of Industry and Information Technology, the Ministry of Public Security, and the State Administration for Market Regulation (SAMR).
With this new law, China takes a step forward in regulating the digital economy and the use of artificial intelligence within a path that has accelerated in recent years with the approval of the Network Security Law (in force since June 2017), the fourth reform of the Patent Law on October 17, 2020, the new Civil Code (in force from January 2021), the Measures for the Supervision and Administration of Online Transactions of the State Administration for Market Regulation, the amendements to the copyright law (effective from June 2021), the Data Security Law (effective from September 2021) and the Personal Information Protection Law (effective from November 2021).
The text of the law and its translation into English can be consulted by clicking here
Avv. Lifang Dong and Avv. Chiara Civitelli
The content of this article does not constitute legal advice, but has an informative function. For tailor made legal advice, contact the firm by e-mail to: firstname.lastname@example.org or by phone +39 06 916505710. © Dong & Partners International Law Firm, All rights reserved.