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Another local live streaming sales regulation has been implemented, reaffirming the industry's self-discipline requirements.

On August 9, the Beijing Municipal Administration for Market Regulation issued the "Beijing Live Streaming Sales Compliance Guidelines" (hereinafter referred to as the "Guidelines") and announced that they will be implemented from now on.

In the past two years, many places have issued similar guidance and regulatory documents. According to the opinions of the interviewed legal experts and lawyers, these documents are formulated based on the existing superior laws, extending the supervision during and after the event to the risk prevention before the event, but they are not mandatory. They are more for the industry to understand the regulatory provisions and can play a better role in popularizing the law.

At the same time, Li Yuan, a lawyer from the Beijing Lawyers Association, stressed that live streaming platforms, relevant practitioners, and local regulatory authorities should not be complacent about compliance due to the lack of relevant guidelines or the effectiveness of such documents. In fact, live streaming e-commerce consumers are still troubled by problems such as after-sales difficulties, false propaganda, "low price" temptation, and product quality. The compliance operation of the industry still requires efforts from all parties.

Propose compliance requirements for AI-synthesized content

On June 7, the Guidelines were publicly solicited for comments and officially came into effect about two months later. The Guidelines contain a total of 31 provisions, and all live streaming sales activities carried out in Beijing must comply with relevant regulations. Shell Finance reporters noticed that the Guidelines have made provisions on business practices that consumers generally care about, such as promotion methods, commercial advertising, product selection quality, and dispute resolution mechanisms. "It is relatively comprehensive and systematic." Professor Zheng Ning, director of the Law Department of the School of Cultural Industry Management at Communication University of China, commented on the Guidelines.

Shell Finance reporters noticed that Article 13 of the Guidelines states that virtual images and content synthesized by artificial intelligence (AI) technology must also comply with corresponding compliance requirements. Today, AI has taken root in the e-commerce industry and is used in virtual fitting rooms, smart customer service and assistants, personalized recommendations, AI anchors and other links. Both traditional e-commerce and hobby e-commerce are focusing on AI. For example, in April this year, JD.com’s “Purchasing and Sales Dongge AIDigital HumanTaobao, Douyin, Kuaishou and other platforms have also announced the development or launch of AI-assisted e-commerce business tools.

Li Yuan believes that anchors generated by artificial intelligence technology do not have legal personality and cannot bear civil liability. The real "anchor" is hidden behind the virtual image. "Once a trust crisis occurs, the cost of reshaping a virtual character is much lower than the cost of the real person's reputation collapsing, and the difficulty of supervision by regulatory agencies will also increase."

For example, according to a previous report by Beijing News Shell Finance, a large number of "Russian beauties promoting products" videos appeared on platforms such as Xiaohongshu, most of which were synthesized by AI face-changing technology. After the foreign Internet celebrity Olga Loiek released a rumor-refuting video in February this year, Beijing News Shell Finance reporters still searched for such promotional videos on domestic content platforms three months later. Although some of them were marked as "content suspected to be generated by AI", the comment area still attracted many middle-aged and elderly people.

"Virtual characters should be strictly managed, and the responsible entities for virtual characters should be registered. Those who have not registered should not carry out live broadcasting." Li Yuan said. The "Live E-commerce Industry Compliance Guidelines (Draft for Comments)" issued by the Hangzhou Judicial Bureau and other departments at the end of October last year put a tight ring on digital human anchors, requiring live e-commerce practitioners to use digital human anchors to ensure that they have obtained full authorization, sign relevant contracts, clarify the rights and obligations of all parties, and add prominent logos in the live broadcast room.

Emphasize the role of regulatory authorities and encourage collaboration between platforms and regulators

"Whether it is Beijing or other places, most of the guidance documents are not new rules, but compilations of existing laws and regulations," said Li Yuan. He believes that similar guidance in other places is more about compliance requirements for industries or operators. Beijing's compliance guidance strengthens the supervision responsibilities of market supervision and management departments in many places, which will make the compliance guidance more effectively implemented.

In Zheng Ning's view, Article 29 of the "Guidelines" encourages operators of live streaming e-commerce platforms to establish joint emergency response, joint prevention and control cooperation mechanisms with local regulatory authorities, which "can be called innovative". In the future, relevant departments, platforms and practitioners will need to explore together in specific practical operations.

Hong Yong, an associate researcher at the E-Commerce Research Institute of the Ministry of Commerce Research Institute, believes that cooperation between platforms and regulatory authorities requires the establishment of an information sharing mechanism and the strengthening of communication and coordination capabilities to ensure that both parties have consistent standards and processes for crisis management. At the same time, regular drills should be conducted to improve collaborative efficiency.

Specifically, "if we can set up an entrance on the platform that is convenient for complaints and directly set up a centralized mediation mechanism on the platform, so that the platform can play a better communication role among consumers, businesses and regulatory agencies, it will be more conducive to the role of these mechanisms." Li Yuan said.

Reiterate the responsibilities and obligations of all platforms and practitioners

The reporter noticed that regarding the platform’s obligations, the "Guidelines" once again emphasized the need to formulate a catalog of goods or services that the platform prohibits or restricts marketing, establish a system for inspecting and patrolling information on live streaming sales, and establish a credit management system and credit evaluation mechanism for operators of live streaming sales rooms.

Li Yuan believes that the current live streaming platforms have huge traffic, and their sales method itself is a form of dissemination behavior, and stricter supervision should be imposed on goods or services that are prohibited or restricted from marketing. According to data from the China Internet Network Information Center, as of December 2023, the number of e-commerce live streaming users reached 597 million, accounting for 54.7% of the total number of netizens.

Regarding the establishment of a credit management system, Li Yuan suggested that it be implemented in a way that is easier for consumers to identify and managed by the platform. "In live streaming, the interaction between operators and consumers will facilitate transactions. In addition, the process from the ordering interface to the rating and evaluation interface is relatively complicated. Consumers often ignore the credit record of operators, which makes it difficult for many consumers to protect their rights after impulse consumption. This problem needs to be solved."

At present, most e-commerce platforms have set up mechanisms such as live broadcast playback, transaction snapshots, store credit evaluation, content reviewers, and sensitive word triggers under compliance obligations.

Some experts have pointed out that the technology and personnel investment required for these mechanisms will cause certain cost pressures on the platforms. Li Yuan believes that it is "not difficult" to formulate a catalog of goods or services that the platform prohibits or restricts from marketing and a credit management system for operators of live broadcast rooms for live streaming. "It can be combined with the existing regulations on the sale of goods or services on the Internet and the credit management system of Internet sales platforms."

At the same time, he said that the information inspection and patrol system requires the cooperation of the platform and the local market supervision and management departments. "When illegal and irregular business operations are discovered, the platform should first take measures such as removing the products from shelves and suspending broadcasting, and report to the local market supervision and management departments in accordance with the requirements of the "Guidelines". The market supervision and management departments should set up special departments to cooperate with the platform and take corresponding measures against the entities that violate the laws and regulations based on the information provided by the platform."

Many consumers have been deceived by the "lowest price on the entire network", especially during the big promotion period, when the price guarantee mechanism is often complained by consumers as "failed". According to the 2024 "618" Consumer Rights Protection Public Opinion Analysis Report of the China Consumers Association (hereinafter referred to as China Consumers Association), during the monitoring period, China Consumers Association collected a total of 58,954 pieces of negative information on price disputes, an average of 3,000 pieces per day.

Article 20 of the Guidelines restricts low-price promotions. According to the above provisions, relevant practitioners of live streaming who conduct promotional activities by price comparison shall clearly indicate or use other methods that are convenient for consumers to understand to indicate the compared price and the selling price. The compared price shall be true and accurate, and shall not mislead consumers with false statements such as "the lowest price on the entire network".

"The platform should implement a more mature price guarantee mechanism instead of using misleading or even deceptive words to make consumers make wrong judgments," said Li Yuan.

Guidance documents are a better way to popularize the law

According to incomplete statistics from reporters, in the past two years, Shanghai, Fujian Province, Shijiazhuang, Hangzhou, Chengdu, Yantai, Zaozhuang and other places have issued similar normative documents or drafts for soliciting opinions.

Given the regulatory strength of previous laws and regulations such as the "E-Commerce Law" and the "Consumer Protection Law", as well as documents such as the "Online Transaction Supervision and Administration Measures" and the "Online Live Streaming Marketing Management Measures (Trial)", why do local governments still need to issue their own guidance documents on live streaming e-commerce?

Zheng Ning explained that national legislation is relatively principled and general, "not too detailed", and the live broadcasting field involves many laws with a wide range, "it is difficult for practitioners to learn", and guidance is a better way to popularize the law. In addition, guidance documents are more flexible and the modification procedure is simpler than legislation.

Li Yuan believes that formulating local regulations is a more targeted and efficient way, "localities will encounter individual problems in the actual implementation process." He also believes that national laws and regulations have relatively complete provisions on various issues, and more efforts need to be made at the implementation level.

While national laws and regulations have relatively complete provisions on rigid content, Zheng Ning suggested that local regulations can innovate in terms of incentive measures and mechanism building.

Previously, a lawyer told reporters that live e-commerce practitioners "don't pay much attention to compliance issues", and CCTV's 315 Gala also repeatedly named live broadcast anchors for irregular business practices. In this regard, Zheng Ning said that legal education needs to be strengthened, and "how to make the corresponding laws deeply rooted in the hearts of the people is an issue that law enforcement agencies need to consider."

Recently, the Cyberspace Administration of China has deployed a one-month special campaign across the country to "clear and rectify false and vulgar phenomena in the field of online live streaming", focusing on rectifying five prominent problems including "fabricating false scenes and personalities, and marketing products without bottom line" and "deceiving consumers and selling counterfeit and shoddy goods".

Wei Yingzi, financial reporter of Beijing News Shell

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