China's State Administration for Market Regulation and Ministry of Commerce recently published a draft amendment to the E-Commerce Law for public comment. The draft runs to twenty items and is the first broad revision since the Law took effect on 1 January 2019.

For rights holders, Articles 41 to 45 are the ones that matter. A notice supported by preliminary evidence of infringement obliges the platform to take necessary measures and forward it to the seller; delay makes it liable with the seller for the additional loss. The seller may file a counter-statement, and the measures must be lifted unless the rights holder complains to an authority or sues within 15 days. A platform that knew or should have known and did nothing is jointly liable with the infringer. Either failure also carries a fine of up to RMB 2 million (approx. USD 280,000) in serious cases.

The draft does not amend the above IP provisions, and an earlier attempt in 2021 never reached the legislature. What is changing is the framework around them, and five of those changes bear on online enforcement.

The definition of a platform is widened. "Order generation" is added to the services that make an operator a platform, and a new article provides that an operator supplying any or all of those services owes the duties set out in the same section for the services it actually provides. That section runs from Article 27 to Article 46 and includes the IP provisions above. Livestreaming, short-video and social commerce businesses will find it harder to argue that they merely host content or introduce buyers to sellers. The obligations are also unbundled: an operator that generates orders without hosting a storefront takes on the duties for that function alone.

Penalties rise under the platform-responsibility articles. The ceiling under Article 82 (unreasonable restrictions on sellers) and Article 83 (qualification checks, consumer protection) moves from RMB 2 million to RMB 5 million (approx. USD 700,000), and measures are added alongside the fines: suspension of specified business lines, suspension of new user registration, suspension or termination of network access, and revocation of operating licences. A further new article allows a fine of up to 5% of the previous year's turnover where the conduct, its effect and its consequences are each "particularly serious" — an approach already familiar from the Anti-Monopoly Law and the Personal Information Protection Law.

Regulators gain express investigation powers. A new article allows the authorities to enter business premises, question operators and other parties, inspect and copy contracts, ledgers, invoices, records and business correspondence, seal or seize evidence, and query bank and payment accounts. It also adds graduated tools short of penalty: supervisory interviews, targeted investigations and formal warning letters. None of this sits in the IP chapter, but it may assist rights holders indirectly. Identifying who stands behind a counterfeit operation, and tracing where the proceeds went, is often one of the hardest parts of online enforcement. Powers to compel production of transaction records and to query payment accounts speak to that.

The duty to act reaches sellers, not only listings. Article 29 currently requires a platform that finds listings in breach of the licensing and prohibited-goods rules to take necessary measures and report to the authorities. The draft extends the object to the sellers themselves and adds two further triggers: harm to national or public interests, and conduct contrary to public order and good morals. Removing a link and removing a seller are different remedies, and the second carries considerably more weight against a repeat infringer.

Outsourcing does not shift responsibility. Where a platform delegates any of these duties to another company, it must do so under a written contract; each side answers for its own breach, and the two are jointly liable for loss caused to sellers or consumers. Platforms that run IP complaint handling, seller verification or takedown review through outside vendors are within this.

The text will change before it becomes law. The two ministries are working through the comments received, after which the draft goes to the State Council and, in due course, to the Standing Committee of the National People's Congress, which normally opens its own consultation at the deliberation stage.

On balance the draft favors rights holders, but it is not without gaps. Articles 82, 83 and 84 have carried the same RMB 2 million ceiling since the Law took effect. Two of them rise to RMB 5 million, while Article 84 — which penalizes a platform that fails to take necessary measures against infringement by a seller — is left where it is. The likely explanation is that changes going directly to the IP provisions remain under discussion. That makes it worth raising in the next round.