China amends its e-commerce law to oversee and protect platforms.

      TL;DR China has released draft amendments to its e-commerce law aimed at enhancing domestic platform regulation and establishing legal “countermeasures” to support companies like Temu and Shein against tariffs and penalties overseas. The 20 proposed provisions are open for public feedback until August 4.

      On Saturday, China unveiled draft amendments to its e-commerce law, introducing 20 provisions that aim to broaden the regulatory framework to encompass more participants within the digital economy. The proposal, issued by the State Administration for Market Regulation and the Ministry of Commerce, is available for public consultation until August 4.

      The release comes at a time when China’s e-commerce giants are experiencing the most stringent domestic regulatory examination in recent years and facing increased challenges in their primary export markets.

      Changes brought by the amendments

      The initial e-commerce law, enacted in January 2019, focused on platform operators and the merchants using those platforms. The new draft aims to extend regulatory oversight to all entities involved in what Beijing describes as the “platform economy.” This category now includes AI-driven shopping assistants, logistics providers, payment processors, and the data frameworks that support them.

      Additionally, the amendments propose to introduce new regulatory measures that go beyond fixed fines and business suspension orders, calling for “routine oversight” and enhanced collaboration between government agencies to ensure consistent enforcement across both online and offline sectors.

      Domestic context

      This draft is aligned with China’s 15th Five-Year Plan, which spans 2026 to 2030, emphasizing the need for tighter scrutiny of platform companies’ data management, algorithms, traffic regulations, and operational practices. In April, the SAMR penalized Alibaba, JD.com, PDD Holdings, Meituan, and ByteDance's Douyin with a total of 3.6 billion yuan ($528 million) for failing to prevent unqualified food delivery services.

      Moreover, Beijing has called upon numerous internet companies to address aggressive price competition as part of its “anti-involution” strategy, aimed at countering destructive price wars that undermine profits without fostering innovation. The amendments to the e-commerce law would provide regulators with a legal foundation for actions they are already informally undertaking.

      International protection measures

      The most innovative aspects of the proposed amendments relate to international collaboration and what the draft refers to as “countermeasures” designed to safeguard the “lawful rights and interests” of Chinese firms operating outside the country. While the language is intentionally broad, the focus is on specific issues.

      For instance, the EU fined Temu €200 million under the Digital Services Act for offering unsafe products to European consumers. On July 1, the EU abolished the €150 de minimis exemption that permitted Temu, Shein, and AliExpress to ship low-value goods to Europe without duties.

      In the United States, the impact has been more pronounced, with the Trump administration eliminating the $800 de minimis exemption for Chinese imports in May 2025, introducing a 54% tariff or a $100 flat fee on previously duty-free packages. Consequently, Temu has reportedly experienced a loss of over half its daily US users since this policy implementation.

      The draft amendments would formalize regulatory intentions that were previously implied. China has been developing data governance frameworks aimed at being adopted internationally alongside its digital infrastructure, and a revised Foreign Trade Law went into effect in March, featuring expanded provisions related to trade countermeasures and national security.

      Dual approach of the platform economy

      The proposed amendments serve a dual purpose. Domestically, they aim to bring more aspects of the platform economy under formal regulation, addressing previously unregulated areas where companies operated in legal grey zones.

      Internationally, they indicate that Beijing plans to utilize legal mechanisms to bolster its platforms’ international growth, despite facing increasing regulatory challenges in Europe and trade barriers in the United States. The draft emphasizes “compatibility” between Chinese and global e-commerce standards, suggesting that China aspires to shape international norms rather than merely adhere to them.

      Whether legislation intended to enhance domestic control can also function as a protective measure in international arenas remains an unresolved tension within the draft. The public consultation will last for 30 days, and the finalized version may differ significantly from the initial proposal made on Saturday.