China Trading Desk
Tighter Control of Live Streaming
Livestream selling is all the rage in China, but recently Chinese regulators are preparing to impose new regulations on the booming use of live streaming. It aims to form a long-term mechanism to rectify abuses such as sales of counterfeit products, false advertising and fake traffic volume.
Most significantly, the regulation clarifies the anchor’s legal responsibilities, this means that video bloggers and anchors will be considered businesses. This will substantially alter their legal liabilities as they will have to obey a broader e-commerce law that was implemented last year. That law requires, for example, that businesses verify their identities before they start live streaming.
The most controversial issue is whether these anchors should be defined as advertising endorsers. This would make them subject to additional regulations including prohibitions against the use of certain terms, such as "best" or "top" when promoting products. This can be the biggest headache for anchor, as many people are used to using exaggerated words to describe what they are selling, this may cause misunderstanding for viewers, but it is also a way to attract attention.
Although the changes represent a potential risk for brands, representatives from e-commerce platforms and influencer agencies welcome the moves because this brings healthy competition into the market and also bring long-term benefits to the development of the industry.