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15 Mar 2016

Brief Analysis of the Regulations for the Administration of Internet News Information Service (Revision Draft for Comment)

In January 2016, the Legislative Affairs Office of the State Council published the Regulations for the Administration of Internet News Information Service (Revision Draft for Comment) (“Draft”), which was prepared by the Cyberspace Administration of China (“CAC”). Given the significant adjustments to the current Regulations for the Administration of Internet News Information Service (“Current Regulations”), the Draft is expected to have a material impact on the future development of the Internet news industry. Below we summarize some of the key provisions of the Draft.

1. Definition of Internet News Information

Consistent with the Current Regulations, the Draft specifies that Internet news information refers only to news information on current affairs, including coverage of political, economic, military, foreign affairs and other social public affairs.

Therefore, non-sensitive news information, such as news information on sports, entertainment or education, is not subject to the Draft. Service providers of specific types of Internet information, such as pharmaceutical, healthcare or financial information, will be subject to other regulations.

2. Scope of Regulation

In addition to Internet websites, BBS, blogs and other traditional media, the Draft included new media which has emerged in recent years into the scope of regulation, including apps, micro-blogs, instant messenger, search engines and other applications that have the functionality to lead public opinion or mobilize the general public. The Draft added special new provisions based on the features of these new forms of media, including prohibiting intervention in search results and of results displayed on a platform.

3. Restrictions on Business of Commercial Websites

According to the Current Regulations, Sina, Sohu, Tencent and other commercial websites with news publication features are only allowed to repost news information, and are not allowed to publish any information that has been independently collected and edited.

In this connection, the Draft also provides that Internet news information service providers that are allowed to provide services for information collection, editing and publication must be news entities, or their controller or competent regulator must be news publicity entities. Therefore, we believe that commercial websites will still be allowed to repost news, but it is unlikely that restrictions will be relaxed on news collection and editing.

4. Restrictions On Foreign Investment

The Draft restated the prohibitions provided in the Current Regulations with respect to the entry of foreign capital into the area of Internet news information services, and required that prior security evaluation by competent authorities be conducted where foreign investors are engaged in business cooperation with Internet news information service providers.

5. Other Important Provisions

The Draft also included some other important provisions, including a change of competent authority for Internet news information services from the Information Office of the State Council and its local arms to the CAC and its local arms; the reinforcement of regulations on Internet news information publication platforms;  strengthening the protections on personal information; and the establishment of a credit filing system and blacklist system for Internet news information service providers.

In summary, it can be concluded from the Draft that the State attaches great importance to the regulation of Internet news information services. We recommend that Internet news information service providers, especially new media that are expressly included in the scope of regulation under the Draft, refer to and consider the relevant provisions, undertake early preparation to apply for operating permits, and establish and implement corresponding internal compliance systems.

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