China goes after fraud in e-commerce

China is targeting abuse and fraud in the e-commerce industry. The National People’s Congress (NPC) passed changes to a competition law, making it illegal to fake sales numbers and to artificially generate positive product reviews via so-called “click farms.” China’s legislative organ approved the changes in the Anti-Unfair Competition Law (中华人民共和国反不正当竞争法), which will enter into force on January 1.

The NPC is also working on China’s first E-Commerce Law (中华人民共和国电子商务法). A second draft, which was presented on October 31, aims to further strengthen consumer rights and stipulates that online vendors have to register their business and pay taxes.

China now has the world’s largest market for online trading. So far, growth in the sector has been largely unregulated. Many vendors sell fake products or advertise based on manipulated sales figures. Many also use paid reviewers to generate positive reviews, while deleting negative ones. China’s tech giant Alibaba highlighted this problem in 2016, when it sued the operator of the platform in late 2016 for allegedly linking vendors with people willing to falsify purchases and write positive reviews to improve those vendors’ rankings on Alibaba.