China has passed a new law protecting online user data privacy on Friday tightening its grip on the technology sector. The new regulations are said to be one of the world’s strictest online privacy laws.

According to global media outlets, China's top legislative body, the Standing Committee of the National People's Congress, enacted the Personal Information Protection Law at a meeting in Beijing, today.

The law will go into force on November 1st.

  • The sweeping privacy law aims at barring firms from gathering sensitive personal data, as the country grapples with an increase in internet frauds and Beijing targets tech giants of hoarding personal information.
  • State and private entities managing personal information will be required to restrict data gathering and obtain user agreement under new rules imposed by China's highest legislative body.
  • Policy analysts believe the new law is unlikely to limit the government's massive monitoring. Chinese state security apparatus will continue to have access to large amounts of personal data.
  • The new restrictions are anticipated to shock China's internet sector, which has seen companies like Didi, a ride-hailing giant, and Tencent, a gaming giant, in the spotlight of regulators in recent months for misusing personal data.

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  • The new laws will restrict businesses from charging varying fees for the same service depending on their customers' spending patterns.
  • A representative for the National People's Congress told media that the law intended to protect those who "feel strongly about personal data being exploited for user profiling and by recommendation algorithms or the use of big data in setting unfair prices."
  • The law also states that the personal data of Chinese citizens cannot be transferred to nations with lesser data security standards than China, which might cause complications for foreign businesses.
  • The law is based on the General Data Protection Regulation of the European Union, which is one of the most rigorous online privacy rules in the world.
  • Kendra Schaefer, a partner with Beijing-based consulting firm Trivium China said, "With this law, China is not really looking at the immediate future." Instead, it aims to "provide the foundations for the digital economy for the next 40 or 50 years," she added.
  • Companies that do not comply could face fines of up to 50 million yuan ($7.6 million) or 5% of their yearly revenue.
  • According to the law, sensitive personal data includes information such as colour, ethnicity, religion, biometric data, and a person's location that, if released, might lead to "discrimination or gravely endanger the safety of individuals."

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