China revises e-commerce law to regulate and protect platforms
▼ Summary
– China released draft amendments to its e-commerce law, proposing 20 provisions that expand regulatory oversight to all participants in the platform economy, including AI agents and logistics providers.
– The amendments add new regulatory tools such as “routine oversight” and greater inter-departmental coordination, building on recent fines against Alibaba and other firms.
– Domestically, the draft formalizes interventions in the “anti-involution” campaign against self-destructive price wars, aligning with China’s 15th Five-Year Plan.
– Internationally, the amendments include “countermeasures” to protect Chinese companies like Temu and Shein from tariffs and fines abroad, such as the EU’s €200 million fine and U.S. tariffs.
– The draft seeks to both tighten domestic regulation and support overseas expansion, but the central tension between these goals remains unresolved.
China has unveiled draft amendments to its e-commerce law, introducing 20 provisions that would significantly broaden the scope of regulation within the country while also establishing legal “countermeasures” to safeguard domestic firms such as Temu and Shein from tariffs and fines imposed overseas. The public has until August 4 to provide feedback on the proposal, which was jointly released by the State Administration for Market Regulation and the Ministry of Commerce.
The timing of this announcement is no coincidence. China’s leading e-commerce companies are navigating a dual challenge: they face the most intense domestic regulatory environment in years, while also encountering growing hostility in their largest export markets.
What the amendments would change
The original e-commerce law, enacted in January 2019, primarily targeted platform operators and the merchants who sell through them. The proposed amendments would extend regulatory oversight to all participants in what Beijing now terms the “platform economy,” a broad category that includes AI-powered shopping agents, logistics providers, payment processors, and the data infrastructure that connects them.
Additionally, the amendments introduce new regulatory tools beyond the existing options of fixed fines and suspension orders. The draft calls for “routine oversight” mechanisms and enhanced coordination among government departments, ensuring consistent enforcement across both online and offline operations.
The domestic context
This draft is a direct outcome of China’s 15th Five-Year Plan, covering 2026 to 2030, which explicitly calls for stronger oversight of platform companies’ data, algorithms, traffic rules, and operating practices. In April, SAMR fined major players including Alibaba, JD.com, PDD Holdings, Meituan, and ByteDance’s Douyin a combined 3.6 billion yuan ($528 million) for failing to block unqualified food delivery merchants.
Beijing has also summoned a dozen internet companies to address aggressive price competition as part of its “anti-involution” campaign, a term the government uses to describe self-destructive price wars that erode profits without fostering innovation. The e-commerce law amendments would provide regulators with a formal legal basis for interventions they are already making informally.
The overseas shield
The most innovative provisions relate to international cooperation and what the draft calls “countermeasures” to protect the “lawful rights and interests” of Chinese enterprises operating abroad. While the language is intentionally broad, the targets are clear.
The European Union fined Temu €200 million under the Digital Services Act for selling unsafe products to European consumers. On July 1, the EU also abolished the €150 de minimis exemption, which had allowed Temu, Shein, and AliExpress to ship low-value goods duty-free into Europe.
In the United States, the impact has been even more severe. The Trump administration ended the $800 de minimis exemption for Chinese imports in May 2025, imposing a 54% tariff or a $100 flat fee on packages that previously entered duty-free. Reports indicate that Temu has lost more than half of its daily US users since the policy took effect.
The draft amendments formalize what earlier regulations only hinted at. China has been building data governance frameworks designed to be exported alongside its digital infrastructure. In March, a revised Foreign Trade Law took effect, expanding provisions for trade countermeasures and national security.
Platform economy, two directions
The amendments attempt to achieve two objectives simultaneously. Domestically, they bring more of the platform economy under formal regulation, closing gaps that allowed companies to operate in grey areas between existing laws.
Internationally, they signal that Beijing will use legal tools to support its platforms’ overseas expansion, even as those platforms face mounting regulatory action in Europe and trade barriers in the United States. The draft’s provisions on “compatibility” between Chinese and international e-commerce standards suggest that Beijing aims to shape global norms, not merely comply with them.
Whether a law designed to tighten control at home can simultaneously serve as a shield abroad is the central tension the draft does not resolve. The public consultation period runs for 30 days, and the final version could look quite different from what was published on Saturday.
(Source: The Next Web)
