China Passes Internet Personal Data Law

Beijing | China on Friday adopted a major law on online privacy protection, aimed in particular at restricting sometimes abusive personal data collection by digital giants.

The text comes as a reaction to the rise in online fraud in recent years, but above all to the growing concern of Chinese consumers about data leaks or the use of algorithms.

Under the new law, passed by the Standing Committee of China’s parliament, public and private companies are required to reduce the collection of personal information from citizens and obtain their prior consent.

The state is not involved: it can continue to collect a large amount of data – in particular to track any political opposition or enforce its tough security policy in the volatile region of Xinjiang (northeast).

The law should align more closely with national digital giants such as Didi (chauffeur-driven vehicle reservations) or Tencent (video games), which have been in Beijing’s crosshairs in recent months for collecting abusive data.

The text specifically aims to prevent “the use of personal data for the purposes of classifying users,” as announced earlier this week by the parliament’s spokesperson to Xinhua News Agency.

In particular, it should prevent “algorithmic differentiation,” a common practice among online sales companies that, for the same service, offer different prices to different users, depending on their purchase history.

The new Chinese law is inspired by one of the strictest laws protecting online privacy in the world: European Union (EU) law.

Among other provisions, the text states that the personal information of Chinese citizens cannot be transferred to countries with lower standards than China in this field.

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A ban that could cause concern for foreign companies – the United States, for example, does not have a national data protection law.

Failure to comply with the new rules, companies face fines of up to 50 million yuan (6.6 million euros) or even 5% of their annual turnover.

For the most serious violations, authorities will be able to deprive companies of their trade license, or even force them to close permanently.

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