China (PRC)

JunHe Partner Hongbin Zhang delves into issues regarding China’s provisions to its network publishing services.
On February 4, 2016, the State Administration of Press, Publications, Radio, Film and Television (SAPPRFT) and the Ministry of Industry and Information Technology (MIIT) jointly issued the Provisions on the Administration of Network Publishing Services (Provisions). The Provisions, with effect from March 10, 2016, specify the definition of, licensing requirements for management of, supervision of and other relevant issues pertaining to the online publishing service.

The Provisions are based on the Regulations on Publication Administration and the Administrative Measures on Internet Information Services published by the State Council and other related legislation and will replace the Interim Provisions on Internet Publication Administration 2002.

Online publishing service and online publication
Any online publishing service conducted within China shall fall within the jurisdiction of the Provisions. The Provisions provide definitions for “online publishing service” and “online publication”. According to the Provisions, the online publishing service refers to the public dissemination of online publications through an information network. “Online publications” refers to digital works with editing, production, processing and other publishing features, including: text, images, maps, games, animation, audio-visual books and other original digital works that contain knowledge and thoughts, in the fields of literature, art, science, etc.; contents of digital works consistent with published books, newspapers, periodicals, audio-visual products and electronic publications; network document databases and other digital works derived from new selections, compilations and collections of the above-mentioned works; and other digital works as identified by the SAPPRFT.

Licensing qualifications
Entities that intend to engage in the online publishing service shall have: a platform for engaging in the online publishing service with a dedicated website domain, intelligent terminal applications, etc.; a definite online publishing service scope; technical equipment required for engaging in the online publishing service with relevant servers and data storage devices located within China; distinct and non-repeating names and articles of association for online publishers; and qualified legal representative and principal person-in-charge.

The legal representative shall be a Chinese citizen permanently residing in China with full legal capacity. At least one professional with an intermediate professional title or above shall serve as the legal representative and/or principal person-in-charge. Apart from the legal representative and principal person-in-charge, eight or more professional editor and publishing persons with publishing qualifications or relevant professional qualifications approved by the SAPPRFT, among whom at least three personnel shall hold intermediate professional titles or above. Content review and editing systems required for engaging in online publishing services, a fixed place of business and other requirements prescribed under the laws and regulations and required by the SAPPRFT shall be adhered to. In the event that publishers of books, audio-visual products, electronic publications, newspapers and periodicals intend to engage in an online publishing service, such publishers need only satisfy the first and third requirements.

When applying for a Network Publishing Services Licence (NPSL), the online publisher shall first apply to the relevant provincial publishing administration authority by submitting the application form and other materials proving its licensing qualifications. After obtaining the approval of the local authority, the publisher shall apply to the SAPPRFT for its approval and obtain the Licence with a validity period of five years. In the event that the online publisher changes its registration information or capital structure, undergoes a merger or divestment, or establishes a branch, the approval procedure shall be carried out in accordance with the Provisions.

Penalties
In the event of unauthorised online publication activities or online publication of online games (including those authorised by overseas copyright holders), such publication shall be banned by the Publication Administration Department, Administration of Industry and Commerce, and the publisher shall be ordered to close down the website and/or be subject to other punishment by the relevant provincial telecommunication department. Where such activity constitutes a crime, criminal responsibility shall be investigated in accordance with the regulations on illegal business operations. Where such activity does not constitute a crime, all relevant online publications shall be deleted, and the main facilities and special tools used in the illegal publication activities, as well as all illegal income, shall be confiscated.

In the event of publishing and disseminating any online publications with prohibited content, the publisher shall be ordered to delete the relevant contents and take corrective actions within a given period by the Publishing Administration Department and all illegal income shall be confiscated.In the event of a serious case, the publisher shall be ordered to suspend its business or may have its NPSL cancelled by the SAPPRFT and the publisher’s website shall be closed down by the relevant telecommunication department according to the notice of the Publishing Administration Department. Where such conduct constitutes a crime, criminal responsibility shall be investigated.


Comments
The Provisions specify the requirements and procedures for the acquisition of a NPSL and further strengthen the supervision power of the relevant publishing administration authorities pertaining to the online publishing service. The primary aspects of the Provisions are as follows:Extensive applicability
The online publications prescribed under the Provisions can be widely interpreted. Apart from this general definition, the Provisions also list the scope of online publications by enumeration. In addition, a general provision involving “other types of digital works identified by the SAPPRFT” has also been inserted.

Due to this extensive applicability, it may be difficult to determine whether a publication will fall within the scope of an online publication. Further, the contents of the Provisions may overlap with those published by the competent telecommunications department, culture department, Administration of Industry and Commerce and other relevant authorities, or may raise issues concerning the linkage and application between different rules and regulations. Given the fact that the SAPPRFT will separately set forth a detailed classification of the online publishing service business, we will be expecting further detailed judgment standards regarding such business.

High threshold for licensing qualifications, high approval level and lengthy approval period

The Provisions have set forth high qualification thresholds for entities that intend to engage in online publishing services. In particular, for entities not publishing books, audio-visual products, electronic publications, newspapers and/or periodicals, stricter licensing requirements will be applied to domain names, business scopes, facilities, employee qualifications and publication content examination policies.

According to the Provisions, when applying for a NPSL, pre-approval from the local provincial publishing administration department shall be obtained, after which approval from the SAPPRFT shall be acquired. As the approval period for SAPPRFT is 60 days and considering the extra time required for provincial approval, the total approval period is estimated to be no less than three months. The abovementioned high thresholds for licensing qualifications, high approval level and relatively long approval period will inevitably increase the difficulty in obtaining a NPSL.

Strict limit on foreign-related issues
Pursuant to the Provisions, foreign-funded entities are prohibited from engaging in online publishing services. With respect to project cooperation of online publishing service business between an online publisher and a foreign-funded enterprise or overseas organisation or individual, or publishing an online game authorised by overseas copyright holder, prior-approval from the SAPPRFT shall be sought.

The Provisions also provide that the related server and storage devices cannot be located outside of China. The applicant shall make a written warranty guaranteeing to store its relevant server in China when applying for a NPSL. Moreover, the legal representative of an online publisher shall be a Chinese citizen permanently residing in China with full legal capacity.

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For the full report, please visit www.junhe.com
Hongbin Zhang, Partner – zhanghb@junhe.com
Jiechun Xu, Associate – xujch@junhe.com

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