Ministry Of Culture’s Opinions On The Development And Administration Of Internet Music (18/04/2007)
(18/04/2007)
1. When were the Opinions released?
The Opinions of the Ministry of Culture on the Development and Administration of Internet Music (the “Opinions”) were released on 11 December, 2006, by the Ministry of Culture (“MOC”), which is China’s regulatory authority for the internet market.
2. What is meant by “internet music”?
The Opinions define internet music as music products that are disseminated via wire or wireless network, such as the internet and telecom network, and involves the production, distribution and consumption of digital music. The Opinions place internet music into two categories.
3. What are the two categories?
One is online music, which is on the internet and can be played from the internet or downloaded onto the internet user’s personal computer. The other is wireless music, also called mobile music, which can be played on mobile phones via wireless network carrier services. These two categories are not limited to internet music; they also cover other interactive and intelligent information networks that are based on intellectual property (“IP”) agreements, such as telecom networks, mobile networks, cable networks, satellite, microwave and fibre wire communications.
4. What is the purpose of the Opinions?
The Opinions are intended to encourage the production and dissemination of original and healthy music products and cultivate a friendly environment for the development of Chinese internet culture. Its mission statement also includes regulating market practice, protecting IPR and improving the regulatory mechanism. Finally, the MOC expects the Opinions to improve the competitiveness of internet music enterprises and establish internationally recognized internet music brands with Chinese characters.
5. How does one enter the Chinese business market for internet music?
Currently, two regulatory systems govern China’s internet cultural products. One is the internet music business market entry system; the other is the imported internet cultural products content censorship system. Both mechanisms are the fruit of the MOC’s promulgation of the Decision of the State Council on the Establishment of Administrative Licensing for Matters Which Remain Subject to Administrative Examination and Approval (“Decree No.412”) and Provisional Regulations on Internet Culture Administration (the “Regulations”).
6. How does the Opinion support the two existing regulatory systems?
They reiterate that internet music business operators must comply with the Regulations and must obtain MOC approval to engage in internet cultural activities for profit, including the importation of internet music. Currently, the MOC’s Licence for Internet Cultural Business Operation (the “Licence”) authorizes operators to engage in the internet audio-visual product market. However, operators shall not exceed the business scope permitted in their Licence; for example, an operator authorized to engage in the internet game market shall not engage in the internet music market. Also, the Opinions ban foreign investment in internet cultural companies.
7. Who is responsible for the examining of the content and dissemination of the imported internet cultural products?
The Measures for Reinforcing the Regulation of Imported Cultural Products (the “Measures”) provide that the MOC is responsible for examining the content of imported internet cultural products and no organization or individual is allowed to import, disseminate or circulate foreign internet music products without the MOC’s approval of importation. Internet music products that have not been censored by the MOC shall not be traded or disseminated in China. Any party disseminating uncensored imported products in violation of the Measures will be penalized by the MOC and the website(s) engaging in such violation will be penalized by the relevant telecom regulatory authority.
The Opinions require that internet business operators shall comply with censorship formalities and file with the MOC before 1 March, 2007 the imported internet music products that have been disseminated in China and are still being disseminated and sold in China. The operators may file their other internet music products for content examination at the same time. Operators who fail to file their imported products with the MOC for content review by the 1 March, 2007 deadline shall be punished for illegal dissemination of imported internet music products. The deadline also applies to operators who publish and disseminate domestic audio-visual products via information networks without MOC approval. Operators may resume internet music market activities only after receiving a MOC reference number.
8. What is the procedure for content censorship?
Content censorship procedures, including documentation filing, are discussed in detail in the Opinions’ appendices. The MOC is responsible for content review of imported audio-visual products and imported internet music products and applies consistent standards to both products. Therefore, the Opinions state that the MOC will simplify the filing formalities for imported audio-visual products that will be disseminated via information networks and those which have passed the MOC’s content examination (including those which have been officially published).
9. Are the formalities any different for Hong Kong SAR, Macau SAR or Taiwan?
The Opinions also address internet music products imported to the Hong Kong Special Administration Region (HKSAR), Macao Special Administration Region (Macao SAR) and Taiwan; internet music products for these areas are subject to formalities similar to foreign internet product formalities. Internet music products copyrighted by Sino-foreign joint ventures, Sino-foreign cooperative ventures or wholly-owned foreign entities are subject to those formalities, too. Finally, the Opinions extend the filing formalities to internet music products copyrighted by joint ventures and joint cooperative ventures incorporated in the mainland, HKSAR, Macao SAR and Taiwan or by companies wholly owned by companies in the HKSAR, Macao SAR or Taiwan.
10. How does the penalties protect intellectual property rights?
The Opinions provide penalties for businesses engaging in unauthorized for-profit internet cultural activities, including internet music activities. Businesses disseminating internet cultural products with illegal content shall be penalized according to the related laws and regulations and the cultural administrative authorities shall cooperate with the related authorities to prevent and penalize musical copyright infringement. Websites shall be subject to severe punishment for posting illegal content or engaging in the internet music business without the MOC’s approval. Anyone can dial a local number, 12318, to report law-breaking activities.
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