Rules for livestreaming e-commerce take effect

China's regulatory bodies have introduced new rules to tighten oversight of the fast-growing livestreaming e-commerce sector, aiming to better protect consumers.

The Livestreaming E-commerce Supervision and Administration Measures were jointly issued by the State Administration for Market Regulation and the Cyberspace Administration of China, Xinhua News Agency reported on Wednesday.

The measures apply to livestreaming e-commerce platforms, livestreaming room operators, livestreaming marketers — people who promote products during live broadcasts — and agencies that provide services to those marketers. The document spells out their legal responsibilities, lists banned practices and sets out ways regulators will strengthen supervision.

In line with the rules, platform operators must verify and register users' real identities and report required information to regulators. Platforms are also required to train livestreaming marketers, set up a grading system to manage livestreaming room operators and take action when illegal activity occurs.

Platforms are also required to establish systems to identify risks, keep records of transactions and protect consumer rights — such as the right to truthful advertising and fair pricing.

Zhu Wei, an associate professor at China University of Political Science and Law, said livestreaming e-commerce is expanding rapidly and that making platforms responsible is key to regulating the sector. A core requirement, he said, is the introduction of a credit grading system, which evaluates marketers and operators based on their past behavior.

"Grading is based on credit records, and it affects access to platform resources," Zhu said."Those with poor credit will face business restrictions, while those with good credit will gain more visibility and trust. In the future, platforms may need to make this credit information public, creating a system where honesty is rewarded."

The measures clearly define prohibited conduct. Livestreaming room operators and marketers are banned from false advertising, damaging competitors' reputations with untrue claims and selling illegal goods or services.

Livestreaming room operators are also required to assume specific responsibilities. These include checking the credentials of actual sellers and marketers, monitoring live chats in real time to stop illegal content, reviewing broadcasts for compliance before they go live and clearly displaying product prices.

Last year, the State Administration for Market Regulation released several enforcement cases involving livestreaming e-commerce. In one case, Beijing's market regulation authority fined a biotechnology company 100,000 yuan ($14,302) for false advertising. The company promoted a strawberry mulberry jelly, legally classified as ordinary food, as a weight loss product during livestreams.

The company hired outside services to falsify popularity and viewer interaction. Over a two-month period, a hired WeChat user posted more than 1,500 fake comments during livestreams, falsely claiming the product helped people lose weight.

Agencies that represent livestreaming marketers are also subject to stricter rules. According to the measures, they are required to standardize how they recruit, train and manage marketers. They must also carry out assessments when working with livestreaming room operators and when selecting products for livestream sales.

Zhu said that in the past, many livestreaming marketers entered the industry without legal training and lacked basic knowledge on consumer rights or the difference between advertising claims and ordinary sales talk. Now that livestreaming marketing is officially recognized as a profession, the rules require at least one training session each year.

"This marks a major change for the industry," Zhu said.

To ensure enforcement, the measures require market regulation and cyberspace authorities to work together more closely, including sharing information, transferring case leads and conducting joint reviews. Companies or individuals found guilty of serious violations will face penalties linked to their credit records, which could restrict their future business activities.