Legal Primer: Regulation Of China’s Digital Game Industry

China Regulation Watch

December 5, 2022

By: Greg Pilarowski | Charles Yu | Zhu Ziwei

 

1.  Introduction

          This is the sixth edition of our legal primer on the regulation of China’s digital game industry. This edition, like its predecessors, provides an overview of the relevant laws and regulations, as well as actual industry practice in the People’s Republic of China (the “PRC” or “China”).[1] In doing so we draw upon not only the written rules, but also informal comments from regulators and other industry participants, in addition to the many years of experience that our attorneys have advising clients in China’s digital game industry.

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China’s Foreign Ownership Restrictions and the VIE Structure

China Regulation Watch

November 16, 2022

By:  Charles Yu | Ziwei Zhu

1.  Foreign Ownership Restrictions

         Foreign investment in the People’s Republic of China (the “PRC”) is either restricted or prohibited in several industries such as the telecommunications industry, which includes most internet focused businesses. The primary regulation with respect to foreign investment restrictions in China is the Special Administrative Measures for the Access of Foreign Investment (Negative List) (外商投资准入特别管理措施 (负面清单)), as amended from time to time on a regular basis, which provides a negative list that contains the prohibited and restricted categories of industry for foreign investment.[1] The telecommunication industry, for example, is classified as restricted,[2] while internet cultural activities and online publishing services are classified as prohibited.[3]

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California Social Media Law Enacted as Courts Confront Similar Texas and Florida Laws

U.S. Tech Law Update

October 17, 2022

By: Alexandra Ashbrook

I.  Introduction

         On September 13, 2022, California governor Newsom signed AB 587 (the “Social Media Law”) into law, requiring social media companies to publicly post terms of service that address hate speech, disinformation, harassment, and extremism policies. The Social Media Law further requires social media companies to report data on enforcement of such policies to the California Attorney General on a biannual basis. Upon signing the bill, California’s governor Newsom asserted that, “Californians deserve to know how [social media] platforms are impacting [California’s] public discourse, and this action brings much-needed transparency and accountability to the policies that shape the social media content [Californians] consume every day.”[1] Continue reading “California Social Media Law Enacted as Courts Confront Similar Texas and Florida Laws”

California Privacy Protection Agency Moves Forward With New Draft Privacy Regulations

U.S. Tech Law Update

August 29, 2022

By: Greg Pilarowski | Alexandra Ashbrook

I.  Introduction

         On August 24 and 25, 2022, the California Privacy Protection Agency (the “Agency”) held a public hearing on proposed regulations affecting the California Consumer Privacy Act of 2018 (the “2018 Act”), as amended by the Consumer Privacy Rights Act of 2020 (the “2020 Act”, and collectively with the 2018 Act, the “CA Privacy Acts”). Amongst its various changes to the 2018 Act, the 2020 Act established the Agency to implement and enforce the CA Privacy Acts.[1] The CA Privacy Acts directed the Agency to update existing regulations to account for the 2020 Act, operationalize new rights and concepts introduced by the 2020 Act, and reorganize and consolidate requirements under the CA Privacy Acts.

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SEC Deems Nine Tokens Securities

U.S. Tech Law Update

August 26, 2022

By: Greg Pilarowski | Magdalene Bedi

II. Introduction

         On July 21, 2022, the United States Securities and Exchange Commission (the “SEC”) alleged that nine digital assets constituted securities in its first insider trading claim involving cryptocurrencies, SEC v. Ishan Wahi, Nikhil Wahi, and Sameer Ramani (the “Complaint”).[1] In the Complaint, the SEC charges a former Coinbase manager and two others with perpetrating a scheme to trade at least 25 digital assets ahead of Coinbase announcing that those assets would be listed on its trading platform.[2] Each of Coinbase’s announcements prompted a spike in the digital assets’ value, resulting in profits totaling more than $1.1 million for the defendants.[3] The SEC established its jurisdiction by declaring that nine of the involved digital assets are securities: AMP, RLY, DDX, XYO, RGT, LCX, POWR, DFX, and KROM (the “Nine Complaint Tokens” or “Complaint Tokens”).[4] This is the first time the SEC characterized digital assets as securities in a legal action that did not include the issuers of those digital assets as parties to the legal action.

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Security Assessment for Cross-Border Data Transfers

China Regulation Watch

July 20, 2022

By:  Zhu Ziwei | Alexandra Ashbrook

  1. Introduction

       On July 7, 2022, the Cyberspace Administration of China (国家互联网信息办公室)(“CAC”) released the final version of the Cross-Border Data Transfer Security Assessment Measures (数据出境安全评估办法) (the “Security Assessment Measures”). The Security Assessment Measures set forth requirements for the transfer of personal information and important data collected within the territory of People’s Republic of China (“China” or “PRC”) out of China after passing a security assessment conducted by the CAC.

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Standard Contract for Cross-Border Transfers of Personal Information

China Regulation Watch

July 7, 2022

By:  Zhu Ziwei | Alexandra Ashbrook

  1. Introduction

         On June 30, 2022, the Cyberspace Administration of China (国家互联网信息办公室)(“CAC”) released draft  Personal Information Cross-Border Transfer Standard Contract Provisions (个人信息出境标准合同规定) (the “Draft Standard Contract Provisions”) together with the form standard contract (the “Standard Contract”) for public comments. Entering into a standard contract with overseas recipients of personal information in a form provided by the CAC is one of three approaches that enable personal information processors[1] to legitimately provide personal information collected in People’s Republic of China (“PRC” or “China”) to overseas recipients. The other two approaches include a security assessment by the CAC and receiving professional agency certification.[2] This article provides an overview of the Draft Standard Contract Provisions and an analysis of the Standard Contract.

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Implications of Biden Executive Order for Blockchain Games

U.S. Tech Law Update

 

July 6, 2022

 

By: Greg Pilarowski | Magdalene Bedi

 

I. Introduction

 

 

        On March 9, 2022, President Joe Biden issued the “Executive Order on Ensuring Responsible Development of Digital Assets” (the “Biden Order”),[1] and shortly after, on May 4, 2022, California Governor Gavin Newsom issued “Executive Order N-9-22” (the “Newsom Order”, and together with the Biden Order, the “Orders”), addressing California’s approach to blockchain technology and crypto assets.[2] Both Orders, while recognizing the need for consumer and investor protection, emphasize the goal of ensuring America and California are welcoming to blockchain technology and the potential economic gains that it may foster.

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Cross-Border Personal Information Processing Security Certification Specifications

China Regulation Watch

July 1, 2022

By:  Zhu Ziwei | Alexandra Ashbrook

  1.  Introduction

          On June 24, 2022, the Secretary of the National Information Security Standard Technology Committee (全国信息安全标准化技术委员会秘书处) issued Cross-Border Personal Information Processing Security Certification Specifications (个人信息跨境处理活动安全认证规范) (“Certification Specifications”), which provide practical guidance on professional agency certification approaches for companies that transfer personal information collected within the People’s Republic of China (“China” or “PRC”) to overseas recipients.

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China Proposes an Initiative to Guide Compliant Issuances of Non-Fungible Tokens

China Regulation Watch

May 24, 2022

By: Zhu Ziwei | Alexandra Ashbrook

    1. Background

        On April 13, 2022, the National Internet Finance Association of China (中国互联网金融协会), the China Banking Association (中国银行业协会) and the Securities Association of China (中国证券业协会) jointly issued an Initiative on Preventing the Financial Risk of Non-Fungible Tokens (the “NFT Initiative”), which identifies illegal uses of non-fungible tokens (“NFT(s)”) as financial assets in certain transactions. Continue reading “China Proposes an Initiative to Guide Compliant Issuances of Non-Fungible Tokens”