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“Big data kills familiarity” is facing a maximum fine of 50 million yuan, Shenzhen promotes the establishment of a data trading platform

Some APPs have long been faced with problems such as not allowing use without accepting the full authorization, “Big Data Kills Familiarity”, and illegally collecting personal information.


At present, various Internet lifestyle apps have penetrated into the lives of people. While facilitating the people, some APPs have always had problems such as excessive collection of personal information and forced request for user authorization. Recently, Shenzhen announced the "Shenzhen Special Economic Zone Data Regulations" (hereinafter referred to as the "Regulations"), exploring the cultivation of data element markets from five aspects. While filling the current gaps in laws and regulations related to data transactions, it also established the fairness of the data element market for the first time. Regarding the competition system, the "Regulations" will be formally implemented on January 1, 2022.


CHE Ning, deputy director of the Research Center for the Rule of Law and Sustainable Development of China University of Political Science and Law, told a reporter from Securities Daily, “As the country’s first comprehensive local legislation in the field of data, the “Regulations” address the protection of personal data rights, the cultivation of data element markets, and the governance of data security, and it also has carried out explorations in other aspects. Not only does it provide local companies with laws, but also provides samples for other local legislations, enabling industry companies to see a comprehensive framework for data legislation, and injecting certainty into their development, which is conducive to the healthy, long-term, and sustainable development of the industry. “


The Chaos of Data Element Market Competition Can be Fined Up to CNY 50 million


According to public data, the current number of Internet users in my country has exceeded 900 million, and there are millions of applications. Some APPs have long-standing problems such as not allowing them to be used without full authorization, Big Data Kills Familiarity, and illegally collecting personal information.


The "Regulations" clearly stipulate that the data element market "free rides", "get for nothing", "big data kills familiarity" and other competition chaos, pointed out that the market shall not use data analysis, and impose differential treatment on counterparties with the same trading conditions without justified reasons. At the same time, corresponding legal responsibilities are stipulated for data unfair competition. Those who violate the regulations and refuse to make corrections can be fined 50,000 yuan ~ 500,000 yuan; if the circumstances are serious, they can be fined up to 5% of the turnover of the previous 5 years, which could be 50 million yuan.


No discriminatory treatment shall be imposed, that is, the prohibition of "Big Data Kills Familiarity". Both new and old users need to be treated equally regarding the price of goods and services.


"Securities Daily" reporters actually found that in some commonly used apps, the "big data kills familiarity" situation does exist. For example, a reporter inquired about multiple flight information on a travel APP and showed that the price for new users was 10-20 yuan cheaper than that for old users. Not only travel apps, but in takeaway and shopping apps, new users often get more types of coupons distributed by the platform. After using coupons, the price of the same product will be cheaper than old users.


CHE Ning said that the above-mentioned chaos may be effectively contained in the future. Objectively speaking, the “Regulations” is local legislation and  the promulgation of the "Regulations" has a strong deterrent effect. It can form effective constraints on local Internet companies in Shenzhen.


"From a local level, the penalty of 50 million yuan is relatively large, which has a strong deterrent effect on illegal apps.” CHEN Wen, director of the Digital Economy Research Center of the School of Finance of Southwestern University of Finance and Economics, told a reporter from the Securities Daily that the regulatory authorities are very necessary for the governance of APP data to ensure the healthy and orderly development of the digital economy.


"Face Recognition” shall not be forced


While big data has become an important factor of production, it has also aroused users' general concern about personal privacy and data security.


"I just told a friend to buy air conditioners, the APP recommends various brands of air conditioners and other electrical products.” Mr. Wang believes that his life is being "hacked". And this situation is not uncommon. Many people say that they search for a certain type of goods on a shopping website, and then they will receive related pushes from other shopping apps.


This is the so-called "user portrait and personalized recommendation" function. Although this provides more accurate and personalized products and services to a certain extent, it also makes users feel that their privacy has been violated.


The "Regulations" stipulate that data processors are allowed to perform user portraits of natural persons for the purpose of improving the quality of products or services, but the main rules and uses should be clearly stated. At the same time, natural persons have the right to refuse to make user portraits and personalized recommendations based on them, and data processors should provide them with a way to refuse.


At the same time, the "minimum necessary and reasonable period" principle should be followed when processing personal data. The "Regulations" clarify that natural persons have personality rights in personal data; at the same time, natural persons, legal persons and unincorporated organizations have the property rights provided by laws, administrative regulations and regulations for data products and services formed by their legal processing of data, and can use them independently in accordance with the law. ,obtain income, and carry out sanctions. In addition, regarding the large-scale use of biometric technologies such as "face recognition", "fingerprint verification", "voice unlocking", and "iris recognition" in criminal investigation, public security, finance, and payment scenarios, the "Regulations" require the processing of biometric data, except where it is necessary and cannot be replaced by other non-biological identification data, alternative solutions for processing other non-biological identification data should be provided at the same time.


CHE Ning believes that “the above regulations distinguish between the protection of data’s personality rights and property rights, and on the basis of providing higher standards of protection for personality rights, the property attributes of data rights are recognized, the inputs, contributions, and rights of data processors are affirmed, and property rights are clarified. Guarantee is conducive to stabilizing market expectations, creating a high-quality data market, and giving play to the productivity role of data elements.”


The "Regulations" pointed out that the Shenzhen Municipal People's Government should promote the establishment of a data transaction platform and guide market entities to conduct data transactions through the data transaction platform. Market entities can conduct data transactions through legally established data transaction platforms, or both parties can conduct transactions on their own in accordance with the law.


According to regulations, data transaction platforms should establish a safe, credible, controllable, and traceable data transaction environment, formulate rules for data transactions, information disclosure, and self-regulation, and take effective measures to protect personal data, business secrets, and important data defined by the State.


CHEN Wen said, “Shenzhen is at the forefront of the country in terms of data governance, and the relevant provisions of the Regulations also provide samples for other regions.”

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