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China's State Internet Information Office Flexes Its Muscles, Contributed by Matthew Murphy, MMLC Group

Wednesday, September 14, 2011

By Matthew Murphy, MMLC Group

In May 2011, many Internet legal commentators were excited to hear about the establishment of the new State Internet Information Office ("SIIO") in China. Up until this time, it was well known that a number of Chinese Ministries and departments (such as the Ministry of Industry and Information Technology ("MIIT"), the State Administration of Industry and Commerce ("SAIC"), the Ministry of Culture, the Ministry of Public Security ("MPS") and the General Administration of Press and Publications) possessed jurisdiction over various online activities, and in some cases, overlap existed which led to uncertainty and conflict. The online games space was one area where this was clearly apparent.

Following the flurry of articles1 written in May regarding the new SIIO and hopes for it to become the sole Internet regulator in China, many commentators were surprised to learn that it was not being as aggressive as was anticipated in relation to regulating online activities in general. Many began to realize that the SIIO was going to take a more advisory role in relation to regulating online activities, rather than the function of an aggressive enforcer of various regulations. Further, an absence of regulations specifically aimed at giving the SIIO particular and exclusive powers, led many to believe that the SIIO was more of a political entity rather than a new kind of regulator.

Recent developments have indicated that the SIIO is happy to take on the role of coordinator of crack downs on illegal activities—it has been reported by the Chinese press2 that the SIIO, MIIT, SAIC and the MPS has recently shut down 6,600 websites that were involved in "illegal public relations deals" for commercial gain. Essentially, these sites offered to "clean up" and "promote" a client's reputation online for a fee; it is alleged that these sites were happy to promote inaccurate information for the benefit of their clients. At this stage, it is not known whether the owners of these websites will be fined and subjected to other sanctions, however it is expected that it will be difficult for these website owners to re-launch their websites at any time in the near future at least.

Given the SIIO's recent activities, we are starting to get an idea as to the role that the SIIO will play in dealing with the regulation of online activities in China. It seIn May 2011, many Internet legal commentators were excited to hear about the establishment of the new State Internet Information Office ("SIIO") in China. Up until this time, it was well known that a number of Chinese Ministries and departments (such as the Ministry of Industry and Information Technology ("MIIT"), the State Administration of Industry and Commerce ("SAIC"), the Ministry of Culture, the Ministry of Public Security ("MPS") and the General Administration of Press and Publications) possessed jurisdiction over various online activities, and in some cases, overlap existed which led to uncertainty and conflict. The online games space was one area where this was clearly apparent.

Following the flurry of articles1 written in May regarding the new SIIO and hopes for it to become the sole Internet regulator in China, many commentators were surprised to learn that it was not being as aggressive as was anticipated in relation to regulating online activities in general. Many began to realize that the SIIO was going to take a more advisory role in relation to regulating online activities, rather than the function of an aggressive enforcer of various regulations. Further, an absence of regulations specifically aimed at giving the SIIO particular and exclusive powers, led many to believe that the SIIO was more of a political entity rather than a new kind of regulator.

Recent developments have indicated that the SIIO is happy to take on the role of coordinator of crack downs on illegal activities—it has been reported by the Chinese press2 that the SIIO, MIIT, SAIC and the MPS has recently shut down 6,600 websites that were involved in "illegal public relations deals" for commercial gain. Essentially, these sites offered to "clean up" and "promote" a client's reputation online for a fee; it is alleged that these sites were happy to promote inaccurate information for the benefit of their clients. At this stage, it is not known whether the owners of these websites will be fined and subjected to other sanctions, however it is expected that it will be difficult for these website owners to re-launch their websites at any time in the near future at least.

Given the SIIO's recent activities, we are starting to get an idea as to the role that the SIIO will play in dealing with the regulation of online activities in China. It seems that the SIIO will be comfortable in acting as a coordinator in relation to regulation and policy development, as well as enforcement activities. Such a role is welcomed given problems associated with overlapping jurisdiction that have regularly arisen in the past.

Matthew Murphy is a partner of the MMLC Group, named 2011 China IT Law Firm of the Year 2011 by Corporate International. He has over 18 years of China and Asia Pacific legal and business experience. Matthew focuses on intellectual property, M&A, and international trade. He is qualified in Queensland, England and Wales. Email: mmurphy@mmlcgroup.com.

© 2011 Beijing MMLC Co., Ltd.ems that the SIIO will be comfortable in acting as a coordinator in relation to regulation and policy development, as well as enforcement activities. Such a role is welcomed given problems associated with overlapping jurisdiction that have regularly arisen in the past.

Matthew Murphy is a partner of the MMLC Group, named 2011 China IT Law Firm of the Year 2011 by Corporate International. He has over 18 years of China and Asia Pacific legal and business experience. Matthew focuses on intellectual property, M&A, and international trade. He is qualified in Queensland, England and Wales. Email: mmurphy@mmlcgroup.com.

© 2011 Beijing MMLC Co., Ltd.

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