Interpretation of the ‘Regulation on the Protection of Minors in Cyberspace’ from the Perspective of Corporate Compliance

With the rapid development of internet technology, issues such as internet addiction, personal privacy infringement, and the proliferation of toxic information have become a hanging sword threatening the mental health of minors. Currently, China has enacted multiple laws and regulations to protect the online safety of minors. Among them, the Regulation on the Protection of Minors in Cyberspace (the Regulation), which officially came into effect on January 1, 2024, is China's first comprehensive administrative regulation specifically aimed at protecting minors in cyberspace. This article will interpret the Regulation from the perspective of corporate compliance, providing guidance for practitioners.

I. Comparison of Domestic and Foreign Corporate Compliance Obligations Related to the Protection of Minors in Cyberspace

As a byproduct of technological advancement, online safety issues for minors have received significant attention from legislators around the world. Taking the United States as an example, it has successively enacted laws such as the Children's Online Privacy Protection Act, the Children's Internet Protection Act, and the Megan Meier Cyberbullying Prevention Act, to protect the online safety of minors. Despite differences in the economic and cultural development of various countries, there is a consensus in protecting minors—continually strengthening government regulation and establishing online platform responsibilities. Nevertheless, compared with other countries, China's relevant legislation demonstrates a stronger emphasis on preventing internet addiction. For example, the Regulation requires providers of online products and services to establish a sound anti-addiction system, to promptly modify content, functions, and rules that may lead to minors' addiction, and to publicize the anti-addiction work annually. Furthermore, due to differences in the maturity of cultural industries among countries, China places more emphasis on external regulation from the government, and the level of industry self-discipline still needs improvement.

II. Impact of the Regulation on Foreign Companies Conducting Business in China

The newly implemented Regulation influences a wide range of entities and imposes strict legal responsibilities. Therefore, companies should accurately understand the compliance points based on their business characteristics. According to the Regulation, providers of online products and services, personal information processors, manufacturers, and sellers of smart terminal products are all explicitly defined as obligated entities and need to accept and cooperate with supervision, and establish effective channels for complaints and reports related to the protection of minors in cyberspace.

Furthermore, regarding network product and service providers such as Microsoft and Duolingo, the newly established compliance obligations under the Regulations include: 1) do not display information that may affect the physical and mental health of minors prominently on the homepage, pop-ups, hot searches, and other eye-catching spots; 2) implement various measures, such as setting up functions to block strangers, as well as establishing warning mechanisms to prevent minors from being bullied online and to prevent personal privacy information leakage; and 3) reasonably limit the consumption amounts of minors at different age stages and to not provide consumption services to minors that are inconsistent with their capacity for civil conduct. As for smart terminal product manufacturers like Apple and Samsung, the Regulation requires them to install software for protecting minors in cyberspace before the products leave the factory, and to inform users of installation channels and methods in a prominent manner.

Additionally, it is worth noting that the Regulation introduces a “bipartite punishment system” and “restrict of trade,” where providers of network products and services violating relevant provisions may face penalties, such as being forbidden to reapply for relevant licenses within five years, and directly responsible personnel being prohibited from engaging in online products or services of the same type within five years. Whether it is the expansion of obligated entities, the increase in obligations, or the strengthening of penalties, they all demonstrate China’s firm determination to safeguard the online safety of minors. Concerned foreign companies should take the compliance obligations of the Regulations seriously to avoid severe legal consequences.

III. The Impact of the Regulation on the Domestic Gaming Industry

Due to the consistently strict regulatory attitude of the Chinese government toward the gaming industry, the implementation of the new Regulation has had minimal impact on the domestic gaming industry. For gaming companies, the subsequent compliance work can focus on the following key points: First, the Regulation changes the monthly consumption limit to a daily limit, further strengthening supervision over minors' consumption; second, the Regulation requires gaming companies to establish a specialized mechanism for minors' complaints and to publicize it prominently; and third, the Regulation specifies that personal information compliance audits should be conducted annually.

With the official implementation of the Regulation, we look forward to seeing companies not only meeting the compliance baseline to mitigate risks, but also advancing relevant rules based on their own leading practices. This will help establish a good reputation for companies in the field of adolescent online safety protection, proactively taking on the social responsibility of protecting the next generation in cyberspace, and fostering an overall trend in the market competition that is conducive to social development and beneficial all parties involved.