China introduces new privacy legislation

The Chinese Communist Party has passed a new law to better protect the privacy of internet users. The law stipulates, among other things, that the processing of personal data must have a ‘clear and reasonable purpose. The law also establishes the principle of data minimization. With the legislation, the government is trying to curb Chinese tech companies.

China has been fighting a fierce battle with Chinese technology companies for some time now. It started when Jack Ma, the founder of Alibaba and Taobao, criticized the Chinese financial world at the end of last year. In his eyes, the sector had fallen asleep and was no longer innovative. Banks, insurers and other financial institutions too easily appealed to state aid.

Ma’s remarks made the government uneasy. The Chinese billionaire was about to go public with the financial arm of his company, the Ant Group. However, President Xi Jinping put a stop to that. He stopped the IPO. He also fined Alibaba EUR 2.4 billion. Jack Ma was then not seen for two months.

Earlier this week, China announced a series of proposals to further regulate Chinese tech companies. Companies are no longer allowed to use fake reviews to glorify products. The government has also announced measures to better protect intellectual property and brand reputation. Tech companies such as Tencent and Alibaba should not make it technically impossible for their customers to use each other’s services.

China is now tightening the thumbscrews even further. From November 1, a new law will come into effect to better protect the privacy of internet users. Technology companies will soon have to ensure more secure storage of personal data. They are also only allowed to process data that has a ‘clear and reasonable purpose. In addition, the processing of personal data must be limited to the ‘minimum scope necessary to achieve the purposes of the processing. This is referred to as data minimization in the General Data Protection Regulation (GDPR).

The new legislation also sets conditions under which tech companies may collect personal data. For example, explicit permission from users is required. Furthermore, companies must draw up guidelines explaining how they protect data when it is transferred to parties abroad. The law also requires technology companies that process personal data to appoint someone responsible for protecting that data. Regular audits or checks must also be carried out. This is to ensure that the privacy law is complied with.

Experts say tech companies should review their practices and operations to ensure they comply with the new laws and regulations.

China is not the only country to come up with new and stricter rules this week. Cuba has previously launched new internet laws, in its own words to “prevent, detect and timely respond to potentially hostile, criminal and harmful activities in cyberspace.” From now on, residents of the island are no longer allowed to encourage people to participate in demonstrations or protest actions via social media or other websites on the internet. In doing so, they risk questioning ‘constitutional, social and economic rules of the state’, which is strictly prohibited. Posting messages that condone violence or invade people’s privacy and dignity is also punishable by law. Anyone who says anything about overthrowing the government is guilty of ‘cyber-terrorism.

The new internet laws were introduced by President Bermúdez to quell the large-scale protests plaguing the island. Cuba is facing the worst economic crisis in thirty years. Residents are angry about high unemployment and severe food shortages. They also think that the president is doing too little to cope with the coronavirus. Bermudez says US President Joe Biden is behind the demonstrations.

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