The Ministry of Industry and Information Technology recently released its Notification on the Network Security Inspection of the Telecom and Internet Industry in 2018. According to the notification, the inspection will cover the networks and systems established and operated by, among other players, internet enterprises and domain name registration administration and service organisations licensed by telecoms regulators.
The State Administration for Market Regulation recently fined two Shenzhen tally companies a total of Rmb3,163,108 for entering into a horizontal monopoly agreement. This is one of the first cases to be announced by the newly established antitrust law enforcement agency and may therefore indicate its attitude towards certain industries and behaviours. In particular, the way in which the competitors in this case were identified could raise new compliance challenges for companies doing business in China.
The finalised three-pronged plan for consolidating China's antitrust agencies under the State Administration for Market Regulation was recently released. This initiative has been anticipated and speculated on since the central government's release of its structural reform plan in March 2018. According to the government's plan, the three-pronged plan should have been released in June 2018, but this was substantially delayed due to differences of opinion regarding the reform.
The Ministry of Public Security recently launched a nationwide security inspection and correction campaign regarding Big Data applications in China. This campaign is one of a series of network security inspection projects which target key information systems, critical information infrastructure and Big Data. The Big Data campaign focuses on the level of supervision, security and protection afforded in the collection, storage, application, transfer and destruction of such data.
Despite a range of stakeholders having vested interests in developing the private health insurance market, it has remained underdeveloped and is generally considered by Chinese insurers to be unprofitable compared with life insurance lines. Insurers have also found it hard to stimulate uptake by a consumer base that is relatively unfamiliar with the added value of such products. As such, the Chinese health insurance market is not as mature, innovative or profitable as it could be.
The National Information Security Standardisation Technical Committee recently released the Information Security Technology – Guide to the Personal Information Security Impact Assessment (Draft for Comment). The guide provides direction on the personal information specification and stipulates the basic concepts, framework, methods and procedures regarding personal information security impact assessments.
The State Internet Information Office recently released the Digital China Construction and Development Report (2017), laying a foundation for further enhancing China's network security protection capabilities. The report urges China to, among other things, establish a 'correct' view of cybersecurity, strengthen the top-level design of its network security and improve its network security laws and regulations.
The EU General Data Protection Regulation (GDPR) recently came into force, with impact on a global scale. On the same day, the secretariat of the National Information Security Standardisation Technical Committee published the Network Security Practice Guidelines: EU GDPR Key Issues, setting out some key areas of the GDPR which Chinese companies should account for in their practices.
The People's Bank of China (PBC) recently released its Circular on Further Intensifying the Management of Credit Information Security. According to the circular, the PBC will intensify its management of credit information security by, among other things, practically raising awareness around the management of such information and strengthening information subjects' responsibilities in this regard. It will also optimise operational and control procedures for credit-related businesses.
The Ministry of Industry and Information Technology (MIIT) recently released its Notice to Further Clear and Regulate the Internet Access Service Market. According to the notice, the campaign to clear and regulate the internet access service market has been extended to March 31 2019 in order to solidify the accomplishments achieved and investigate the issues found thus far pursuant to the notice of the same name issued by the MIIT in January 2017.
The Ministry of Commerce recently promulgated the Measures for the Review of Concentrations of Business Operators (revised draft) for consultation. However, the revised draft still lacks provisions on the shifting alliances concept. The relevant Anti-monopoly Law enforcement agencies should consider this concept in future, as acknowledging it at the legislative level will finally place China's antitrust system among those of the world's most advanced anti-monopoly jurisdictions.
The General Office of the State Council recently issued the Measures for the Management of Scientific Data, which aim to improve and standardise the management of scientific data, safeguard scientific data security and encourage transparency and the sharing of scientific data. This is the first time that China has released measures which regulate scientific data at the national level. However, compared with some European countries and the United States, China still has far to go in this regard.
The Anti-monopoly Law enforcement agencies are increasingly investigating and finding fault with collective boycotts among competitors. As the presumption of illegality for collective boycotts requires a high level of compliance, businesses should be aware that although an independent decision not to deal with distributors or suppliers may not raise Anti-monopoly Law concerns, an agreement with competitors not to do so could raise such concerns.
Following a media report that certain mobile phone application software was infringing user privacy, the Ministry of Industry and Information Technology organised talks with three internet companies. The ministry pointed out that the companies had collected and used users' personal information without fully disclosing the purpose of its use. The companies must now conduct rectifications to fully protect users' rights to be informed.
The State Council recently submitted a proposal to the National People's Congress concerning the council's institutional reform programme. The proposal has shed light on the plans to consolidate the antitrust enforcement powers of the three antitrust agencies under the State Administration for Market Supervision. Although the merger is significant in terms of institutional reorganisation, it will not fundamentally change Anti-monopoly Law enforcement activities in China.
The China Insurance Regulatory Committee recently promulgated the new Measures for the Administration of Equity in Insurance Companies, which state that if the shareholding proportion of an insurer's foreign shareholders accounts for more than 25% of its registered capital, the relevant provisions of the measures must be applied by reference. This express inclusion of foreign-invested insurers represents a substantial shift away from current practice.
In 2017 the National Development and Reform Commission actively carried out legislative work and formulated and promulgated industrial guidelines and enforcement procedures. In addition, it remained active in its antitrust enforcement by not only penalising a variety of enterprises for anti-competitive conduct, but also targeting administrative agencies that had abused their administrative power in order to restrict or eliminate competition.
Since the end of 2017, the China Insurance Regulatory Committee has taken numerous regulatory measures to address disorder in the insurance market, some of which have brought certain domestic life insurers to task. The measures are notable, as they underline a renewed emphasis on controlling financial risks, which is of utmost concern for the government.
The National Development and Reform Commission recently released price conduct guidelines for business operators active in the drugs prone to shortages and active pharmaceutical ingredient (API) markets. The guidelines strengthen the API market's price supervision mechanism, clearly regulate market pricing behaviour with regard to drugs prone to shortages and APIs and provide practical guidance for relevant pharmaceutical companies with regard to their pricing behaviour.
Following the resumption of bilateral trade treaty talks between China and the United States, a 100-day plan was mooted which promised to improve trade ties going forward. One area of focus in this regard has been the foreign ownership limits that apply to inbound investment in Chinese financial services groups, including those pertaining to the country's insurance industry. This policy shift has given rise to expectations that further foreign investment in the insurance industry will increase significantly.