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5 Jul 2016

Analysis of New Regulations on App Services

The State Internet Information Office (SIIO) published the Administrative Provisions on Mobile Internet Applications Information Services (New App Service Regulation) in order to strengthen the management on Mobile Internet Application Programs (Apps). The New App Service Regulation will go into effect as of 1 August 2016. Below are some key points regarding the new regulation:

First, the New App Service Regulation clarifies the supervising department of the industry, stating that the SIIO is in charge of supervising, managing and enforcing laws on App content nationwide. Further, local Internet Information Offices must supervise, manage and enforce laws on App content in their administrative areas. In addition, the Ministry of Industry, Information and Technology (MIIT) and other industry-specific departments, such as the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) and the Ministry of Culture (MOC), also maintain authority over App services which fall under the scope of their jurisdiction under current statutes and regulations. 

Second, the New App Service Regulation clarifies the scope of supervision and compliance obligations stating that an App provider and App store operator must provide their services in accordance with the new regulation. The main obligations of an App provider include: (i) verifying the true identity of registered users, (ii) respecting and protecting intellectual property, and (iii) recording user’s log-in information and preserving for 60 days. App store operators must manage App providers, including verifying the truthfulness, safety and legality of App providers, and encourage App providers to protect user information. Further, App providers and App store operators must not make, copy, publish or spread information which is forbidden by law through any App. 

Third, the New App Service Regulation emphasizes service qualification requirements:

  • For an App provider, the New App Service Regulation requires an App provider to obtain relevant qualifications in accordance with statutes and regulations. The industry supervision departments have clear requirements for qualifications according to the current law. For example, in accordance with the Administrative Provisions on Mobile Games Publishing Service Management recently released bytheSAPPRFT, all mobile game Apps must be censored and approved by it; an App cannot be published online without the completion of such procedure.
  • For an App store operator, the New App Service Regulation requires it to file with the Internet Information Office of the province, autonomous region or municipality where it is located within 30 days of the commencement of its online operations. Under the current legal system, it is generally required that an App store operator obtain an Internet Content Permit from the MIIT, as well as an Online Cultural Operation Permit from the MOC and Online Publishing Permit from the SAPPRFT, in order to distribute and download Apps as a business. Based on the New App Service Regulation, all App store operators should make sure to complete such filings in order to operate legally. 

As a final point, due to the current limitations provided by foreign investment industry policies, foreign investors are neither qualified to obtain certain App service qualifications nor obtain an Online Cultural Operation Permit and Online Publishing Permit. Therefore, there are substantial legal barriers for foreign investors to provide certain App and App store services. 

The New App Service Regulation is expected to influence the App market significantly. We suggest that affected App providers and App store operators update their business operations as necessary as early as possible to ensure that their businesses are in compliance with the New App Service Regulation to reduce legal risks. 

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