New clarifying provisions in China regulating how marketing can be done via short message service (“SMS”) will come into effect on June 30, 2015.

On May 28, 2015, the Ministry of Industry and Information Technology (“MIIT”) published measures to implement various high-level provisions related to SMS marketing in several different laws, such as the Decision of the Standing Committee of the National People’s Congress on Strengthening Network Information Protection (“2012 Decision”), the Consumer Rights Protection Law (“CRPL”) and the Advertising Law. Taken together, these pre-existing laws generally prohibit companies from sending commercial communications to consumers without consent, and require companies to (1) comply with express requests from consumers not to send such communications, (2) disclose the identity and contact information of the advertiser in electronic advertising, and (3) provide a way for a consumer to refuse future electronic advertisements.

The newly promulgated measures, entitled the Administrative Rules for Short Message Service (“SMS Rules,” official Chinese version here; Covington’s translation here) and effective June 30, 2015, flesh out these general rules related to SMS marketing. In addition to the general consent and disclosure requirements in the laws listed above, the SMS Rules:

1. Define commercial SMS messages as communications used for introducing or promoting goods, services, or business investment opportunities.

2. Require that if consent to receive commercial SMS messages is requested through SMS, the requesting SMS must specify the “type, frequency, and time limit of proposed SMS” messages. No reply is considered a rejection, and the same or similar requesting SMS must not be sent again.

3. SMS messages containing commercial information must contain a “convenient and effective” way to refuse receipt of such SMS messages in the future, and no obstacles to such refusal are permitted. The message also must expressly contain the name of the content provider (e.g., the advertiser).

4. SMS service providers (e.g., mobile operators such as China Mobile or China Unicom) are required to keep records of commercial SMS messages, including sent time, time of receipt, number or code of the sending and receiving terminals, and information regarding subscriptions and unsubscriptions for at least five months. Subscription and unsubscription information must be maintained for at least five months after the termination of the service relationship between the SMS service provider and recipient.

Failure to comply with requirements 2 and 3 above may result in a fine ranging from RMB 5,000 (about US $800) to RMB 30,000 (about US $4800) imposed by the local Administration of Industry and Commerce, which generally regulates advertising. Failure to keep the records required in item 4 above may be result in a fine ranging from RMB 10,000 (about US $1600) to RMB 30,000 (about US $4800) by MIIT’s local counterpart, and such fine will be publicly announced.

The SMS Rules appear to be in part a response to calls from the general public to combat the high frequency of SMS spam, and part of a broader series of laws and regulations issued by the government in the last 24 months to further regulate collection and use of personal information in marketing.

Tags: China, marketing, SMS
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Photo of Eric Carlson Eric Carlson

Eric Carlson has nearly two decades of experience advising clients operating in China and other jurisdictions in Asia on compliance and investigations matters, particularly in the areas of corruption/FCPA/fraud and export controls/sanctions.

Having lived in China for more than a decade, he has …

Eric Carlson has nearly two decades of experience advising clients operating in China and other jurisdictions in Asia on compliance and investigations matters, particularly in the areas of corruption/FCPA/fraud and export controls/sanctions.

Having lived in China for more than a decade, he has deep experience leading highly sensitive investigations in China and other jurisdictions in Asia, including investigations presenting complex legal, political, and reputational risks. He speaks Mandarin and Cantonese and has led more than four hundred witness interviews in Chinese in 24 provinces in China, and conducted dozens of trainings in Chinese. He is a Certified Fraud Examiner.

Eric also counsels clients on the compliance risks of proposed transactions, conducts compliance due diligence as part of mergers, acquisitions, and joint ventures, assists companies in updating and strengthening their internal compliance programs and tailoring them to the unique features of Asian markets, and developing and presenting tailored compliance training in Chinese and English. Eric has advised scores of companies and organizations representing nearly every major industry.

Eric is a regular speaker on China-related compliance issues. He has been quoted in publications such as The Wall Street Journal, The Economist, The Financial Times, Global Investigations Review, Compliance Week, FCPA Report, The Corporate Treasurer, Commercial Dispute Resolution, China Business Law Journal, and Economy and Nation Weekly and was a contributing editor to the FCPA Blog. Chambers notes that Eric has “much more than just a conversational grasp of the language, but the ability to conduct interviews on specific subject matter details and get to the root of the issues.” Chambers further notes that “his language skills are very impressive” and that he provides “great advice that is grounded in reality,” adding: “They know the industry and their advice is very risk-based and balanced.” One client noted to Chambers: “They have strong regional coverage both in terms of footprint as well as language skills. If I have a compliance investigation in region with a tight timeframe, I know they can get it done. They take a more realistic approach to scoping investigations.” Other clients noted to Chambers that Eric is “really brilliant” and “an expert in this field.” According to one client surveyed by Chambers, “he is particularly adept at ‘right sizing’ the scope of an investigation to get at the key issues without incurring unnecessary operational or financial burden. He is also incredibly responsive to client communications.”

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Photo of Sheng Huang Sheng Huang

Sheng Huang is of counsel in the firm’s Beijing office. He focuses on China-related practices. He has extensive experience in intellectual property law, specializing in the resolution of Chinese companies’ cross-border intellectual property disputes.

He also assisted international and Chinese clients with their…

Sheng Huang is of counsel in the firm’s Beijing office. He focuses on China-related practices. He has extensive experience in intellectual property law, specializing in the resolution of Chinese companies’ cross-border intellectual property disputes.

He also assisted international and Chinese clients with their intellectual property issues in China.

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