Giving Full Play to the Judicial Function and Completing the Rule System of Digital Economy

( Updated : 2022-06-02

Giving Full Play to the Judicial Function and Completing the Rule System of Digital Economy

Shen Liang, Justice, Vice-President,President of the Fifth Circuit Court of the Supreme People's Court of the People's Republic of China

Distinguished Justices,

Ladies and gentlemen,

dear friends,

Good morning/afternoon! Digital economy serves as a brand new economic form shaped by the deep integration of information technology and economic activities. Currently, the fast-paced development of digital economy has not only spawned new forms of social relations and disputes, but also brought new legal challenges to citizens' personal information and privacy, data ownership transactions, network platform governance, Internet competition order, information network security, etc. Therefore, it is of great urgency to give play to the judicial function of encouraging innovation and leading by norms. In recent years, Chinese courts have vigorously strengthened the judicial protection of the digital economy, and formulated and promulgated relevant judicial interpretations. Besides, the trials for all kinds of cases featuring new models and new business forms have been conducted in a fair way in accordance with the law in an effort to provide a strong support to promote the high-quality development of the digital economy.

1. Adhering to the Equal Importance of Both Encouragement and Standardization to Stimulate the Dynamic Development of the Digital Economy

The first is to strengthen the protection of intellectual property rights. Chinese President Xi Jinping pointed out that, "Innovation is the primary driving force to lead development, and protecting IPR is protecting innovation." China has specially set up the Intellectual Property Court of the Supreme People's Court and specialized intellectual property courts, in a bid to and effectively advance the professionalism of adjudication of intellectual property cases. Further progress will be made to strengthen the protection of science and technology innovation achievements, adjudicate a series of high-tech cases involving quantum information, artificial intelligence, high-end chips, etc., and encourage various market players to achieve industrial upgrading through technological progress and innovation.

Second, we will strengthen protection of property rights based on the equal principle. Property right protection has served as a crucial cornerstone of digital economy growth. Adhering to the principle of equal, comprehensive and legal protection of property rights, we will strictly prevent conducts that infringe on the legitimate rights and interests of enterprises and entrepreneurs, resolutely prevent using criminal measures to resolve civil disputes, create a business environment ruled by law, effectively stabilize market expectations and enhance the vitality of innovation and creativity, thus allowing the entrepreneurs to do business at ease, invest with confidence, and focus on entrepreneurship.

Third, we will strengthen the protection of data rights. Data serve as the core factor of production in digital economy. The courts in China have properly adjudicated various types of cases arising from data ownership and trading, and fully protected the legitimate rights and interests of rights holders in controlling data, processing data and benefiting from data, in an effort to promote the establishment of a sound development pattern in which data resources are collected and shared, the data flows are conducted in a safe and orderly manner and data values are allocated on a market-based basis. For example, the big data crawling case heard by the Hangzhou Internet Court clearly defined the legitimacy of crawling, which contributed to refining the application rules of web crawler technology.

2. Refining the Governance Ecology of the Digital Economy to Maintain Good Market Order

First, measures should be taken to regulate the sound development of new digital business forms. We adhere to respect the law of the market and reasonably grasp the extent of judicial intervention, which not only gives full play to the growth of new business forms, but also scientifically delimits the legal boundaries of digital transactions. SPC has promulgated judicial interpretations of online consumption to regulate the legal issues of new business forms such as live commerce and takeout catering. Courts across the country have properly heard cases in new business fields such as short videos, online education, online medical care, digital finance, and shared travel. Besides, efforts are made to strengthen judicial protection for the construction of new digital infrastructure, including 5G networks, big data platforms and internet of vehicles, to effectively promote the industry digitization and digital industrialization.

The second is to strengthen antitrust and anti-unfair competition. Abuse of market dominance and unfair competition in the internet industry is far more common and implicit than that in traditional industries. This March, SPC issued judicial interpretations of the Anti-unfair Competition Law that detailed provisions on commercial defamation, false marketing and online unfair competition. In September 2021, we released ten typical cases involving antitrust and anti-unfair competition cases, including front legal issues such as click farming, browser blocking ads, ranking recommendation through algorithms, the restricted competition of platform operators, etc. We further clarifed the standards for judicial identification and improved the rules for the adjudication of new types of unfair competition and antitrust acts, effectively ensuring all types of market players to participate in fair competition.

The third is to strengthen the governance of network platforms. Defining the platform responsibility reasonably is instrumental in the solid and orderly development of the digital economy. Chinese courts have made the platform liabilities specific and standard through case adjudication. For example, if the platform directly obtains economic benefits from the conducts of the Internet user, it shall have a relatively higher duty of care for the user's infringement; if the platform deliberately ignores the fact of the online infringement, the platform shall be directly found to be at fault; for persons repeatedly infringing or repeated infringements, the platform shall assume a higher obligation of active review. By clearly defining the liability of the online platform, we promote the network platform to provide users with more fair, transparent and predictable Internet services and environment.

3. Actively Preventing and Defusing Cyber Risks to Build A Security Barrier for the Digital Economy

The first is to resolutely crack down on cybercrimes. In the Internet era, new forms of Internet crime have emerged, including the increasing use of technology, the increasing specialization of fields, the increasing organization nature of the subject and the industrialization of profit-making mechanism. In light of the new characteristics of cybercrimes, Chinese courts have thoroughly implemented laws such as the Cybersecurity Law and the Data Security Law, and intensified their efforts to punish cybercrimes. We punished the operation of online casinos, illegal theft of digital properties, online fraud, online pyramid schemes, online hackers, infringement of citizens’ personal information and other cybercrimes in accordance with the law. Measures have also been taken to pursue legal liabilities for malicious complaints and online rumors in accordance with the law, and ensure a stable and orderly internet environment, never allowing cyberspace to become place outside the law.

The second is to maintain personal information security. In the era of digital economy, personal information is not only a basic civil right, but also a critical commercial resource. It is of great necessity to maintain personal information security effectively on the basis of taking into account the demands of all parties and balancing interests according to law. In August 2021, China promulgated the Personal Information Protection Law of the People’s Republic of China (hereinafter referred to as the Personal Information Protection Law), thus opening a new chapter in the cause of personal information protection. Chinese courts have actively implemented the Personal Information Protection Law, by formulating and promulgating judicial interpretations on legal issues related to the processing of personal information through face recognition technology, and delimited the legal boundaries for the application of face recognition technology, to protect individual key biometric information security. Local courts have clarified the rules for the commercial use of users’ personal data by hearing cases involving the use of information networks that infringes upon the right to privacy, the right to portrait, and the peaceful right to personal information, to guide and regulate the collection and use of personal information data by internet enterprises in accordance with rules and regulations.

Third, we have strengthened the legal regulation of algorithmic technology. Algorithmic technology has greatly improved the efficiency of social productivity, which also brings risks to the society. Problems increasingly emerged, including algorithm black box, algorithm discrimination, illegal processing of data, and the use of algorithm to implement unfair competition. Chinese courts, guided by the concept of “Tech for Social Good”, have tried cases such as big data-enabled price discrimination against existing customers, algorithms restricting competition, and algorithm punishing, to punish the use of algorithms to interfere with public opinion, suppress competitors, infringe on the rights and interests of the citizens and other illegal acts. Measures will also be taken to strengthen the judicial protection of users’ rights and interests in the application of algorithm technology, protect the users’ right to know, the right to choose and the right to refuse, and ensure the security of the algorithms.

Distinguished guests, Chinese courts will, through adjudication, establish and improve adjudicative rules in areas such as data rights and platform responsibilities. We will standardize and lead the high-quality development of the digital economy. We are willing to intensify international exchange and cooperation on the judicial protection of digital economy for the benefit of people around the world.

Thank you!