(By You Yunting) Several days ago, the author wrote an essay “Is It Illegal for Amazon.cn Running Kindle Store with A License Borrowed from Business Cooperation?” And in recent, the Office of Legislative Affairs of the State Council published the news that, the General Administration of Press and Publication (the “GAPP”) is working with other departments drafting the exposure draft of Management Measures of Online Publish Service (the “Measures”) (note: the link is in Chinese). According to the Measures, the foreign invested company shall not engage themselves in the online publishing. The domestic publishing units shall report their cooperation with foreign companies in the service of online publishing. For this reason, once the Measures would come into effect, the Amazon, a foreign invested company, would have no access to participate in the business concerning the online publishing service, and its cooperation with Chineseall.com shall be reevaluated for the security by the administration.
(By You Yunting) On the morning of 13th December, to most one’s inexpectation, Amazon.cn launched itsChinese Kindle Store. As indicated in the web page, it is run by Chineseall.com, a licensed online publisher. That hints Kindle reader would come to China soon. And on the eager of Chinese users,a media report on 14th December (Note: the link is in Chinese) claimed Kindle Store has been halted by the General Administration of Press and Publication (the “GAPP”) for its violation against the law.
“Mr. Wang Qiang, the chief of digital publication section of the Science & Digital Publication Department of GAPP said in his interview that Amazon’s Kindle Store is violating the law for its license borrowed from business cooperation”. Also, it is mentioned in the report that GAPP has inquired and investigated Amazon.cn and Chineseall.com, but yet no result is available now. It is obvious that to Amazon’s plan, it would like to settle the license obstacle by using others’ license. In today’s post, we would like to discuss legal issues concerning licenses on electronic book business.
I. What license is necessary for e-book business?
The qualification of e-book business is mainly regulated in department rules of GAPP. Possibly due to a faster development in science and outdated regulations, the rules are actually could not been seen as an official legislature. It is called Opinions on Developing E-book Industry by GAPP. (Note: the link is in Chinese) By its Article 14, the e-book business of Amazon involves the edition, publish and sales of the e-publication, and thereby shall correspondently apply for three licenses.
Before the e-book, the online game industry is also facing the license problem to publishing the user terminal. At then, two ways are mainly adopted by game companies for the acquisition of business license: 1) the game companies with online publish license could directly submit the game to the GAPP for approval in his own name; 2) those companies with no such qualification, they would present the games to the electronic audio and video publishing house and afterwards to gain the e-publication license. But unlike the publish of online game, for which hundreds of games could be run by a single company and they are possible to gain the license through the publishing house, the release of the e-book may involves millions of works, once they are published through publishing house, all their gains may be inadequate for the payment to the publishing house.
II. Why Amazon did not apply for the license directly?
Could Amazon directly apply for the license for online publication? The answer is no. The shareholder of Amazon.cn is Amazon USA, which makes it a foreign invested company. And by the Guideline of Foreign Invested Industry issued by the Ministry of Commerce, the field of video & audio production as well as the electronic publication and making is prohibited for foreign investment. For this reason, Amazon.cn could no apply for the license solely by itself or in its name.
III. What problems for the cooperation between Amazon and Chineseall.com?
According to the page of Amazon’s e-book:
“The e-book store of Kindle is supported by Chineseall.com, Xinchuwangzheng (jing) No.045”. The Chineseall.com is a licensed corporate, and obviously by Amazon’s plan,it would like to settle the problem of license through the cooperation with a licensed company. But to my personal opinion, the current operation model is defected. To my experience, the domain name, server room, software for reading and payment for book purchase of Kindle e-book store are all supported by Amazon.cn, and it has no connection with Chineseall.com, so where could see the support from Chineseall.com? Therefore, it is not groundless in law that the official from the GAPP said Amazon’s operation under others’ license is violating the law.
Before closing, just half month ago, Xiaomi Inc., a private high tech company, released its set top box–Xiaomi Box, which was also halted by the administration. For that, the author has also written two articles to criticize the authority. For this time, the international giant Amazon couters with the same problem in the publish field. However, either Xiaomi or Kindle Store leads the development direction of science and advanced culture. Their experience in the government’s administration could also explain their “advance”, and the outdate of Chinese authority. And by te existing system in China, no judicial relief is available to Chinese companies when in such situation, and they could not file an administrative lawsuit. The main risk for it is the administration supervision could kill the update and upgrade of high-tech products, which would eventually make our science development legging behind the global trend.