Nana Muazin
The Cyberspace Administration of China (CAC), in conjunction with several high-level state ministries, has officially released the Provisions on the Management of Multi-Channel Distribution Services for Internet Information Content. Formulated under the framework of the PRC Cybersecurity Law and the Measures on the Management of Internet Information Services, these regulations aim to standardize the rapidly expanding Multi-Channel Network (MCN) industry, protect the rights of online entities, and foster a "healthy online ecology." The provisions, which apply to all multi-channel distribution activities within mainland China, establish a comprehensive oversight mechanism involving the Ministry of Public Security, the Ministry of Culture and Tourism, the State Administration for Market Regulation (SAMR), and the National Radio and Television Administration (NRTA).
The new regulatory framework arrives at a critical juncture for China’s digital economy, where MCNs—entities that manage and support multiple internet influencers or "KOLs" (Key Opinion Leaders)—have become the primary drivers of content production and e-commerce. By mandating strict registration, content auditing, and platform-level verification, the Chinese government is moving to institutionalize the responsibility of these intermediaries, ensuring they are held accountable for the behavior of the creators under their management.
Comprehensive Operational and Registration Mandates
Under Chapter II of the Provisions, MCN agencies are now required to register as legal business entities with specific language in their business scope. Article 6 stipulates that the phrase "Internet information content multi-channel distribution services" must be explicitly included in the agency’s business registration. For existing agencies already in operation, a 30-day grace period from the date of the regulation’s implementation is provided to update their registration details with the relevant market supervision departments.
Beyond simple registration, the law mandates a structural shift in how these agencies manage content. Article 6 requires MCNs to establish dedicated content management teams led by a designated individual responsible for information security. The size and expertise of these teams must be proportionate to the scale of the agency’s operations and the number of creators they manage. Furthermore, agencies are required to develop internal protocols for emergency response, personnel management, and content review to prevent the dissemination of illegal or "harmful" information.
The Gatekeeper Role of Internet Platforms
A significant portion of the new regulation shifts the burden of oversight onto internet service providers and social media platforms, such as Douyin, Kuaishou, and WeChat. Article 7 requires platforms to sign formal entry agreements with MCN agencies operating on their systems. Platforms are legally obligated to verify the business licenses and operational qualifications of these agencies before allowing them to provide distribution services.
Furthermore, Article 8 introduces a provincial filing system. Platforms must report the entry of MCN agencies to the provincial-level cyberspace department within 30 working days. This information is then shared across a centralized database accessible by the police, cultural and tourism bureaus, and market regulators. This inter-agency transparency is designed to eliminate "regulatory blind spots" where agencies might move between platforms or regions to avoid scrutiny.
To increase transparency for the end-user, Article 11 mandates that platforms clearly label the MCN affiliation of any signed account. This label must be prominently displayed on the user’s profile page. If a platform discovers an account that has failed to disclose its MCN affiliation, it must issue a prompt for correction. Failure to comply can result in the platform restricting the account’s features, suspending its profit-generating capabilities, or terminating the service agreement altogether.
Content Standards and Prohibited Behaviors
Chapter III outlines the "Service Specifications" that MCNs and their creators must follow. Article 15 encourages the production of content that aligns with "Socialist Core Values," promoting traditional Chinese culture, revolutionary history, and national unity. However, the regulation is more specific regarding prohibited behaviors that have plagued the industry in recent years.
Article 17 explicitly forbids a wide range of "malicious" marketing and content tactics, including:
- Fabricating Topics: The creation of fake news or the use of deepfake technology (AI-generated content) to mislead the public.
- Emotional Manipulation: Intentionally inciting "
group confrontation," regional discrimination, or exploiting public sentiment to generate traffic.
- Data Falsification: The use of bots or manual "click farms" to inflate views, likes, comments, and follower counts.
- Misleading Marketing: Fabricating background stories or "personas" to deceive consumers during livestreaming or short-video sales.
- Exploiting Tragedies: Using social hotspots, accidents, or disasters as "clickbait" or for sensationalist entertainment.
These prohibitions target the "traffic-first" mentality that has led to numerous scandals in China’s influencer economy, ranging from fake charity livestreams to the staged "street battles" between rival influencers.
Protection of Minors and Consumer Rights
The regulation places a heavy emphasis on the protection of vulnerable groups. Article 18 aligns the MCN rules with China’s broader Law on the Protection of Minors. It strictly prohibits MCNs from providing livestreaming services to children under the age of 16. For minors aged 16 to 18, agencies must verify their identity and obtain explicit consent from parents or legal guardians before allowing them to engage in livestreaming or content production.
In the realm of e-commerce, Article 19 requires MCNs engaged in livestream marketing to comply with consumer protection laws. They must establish systems for product selection, quality control, and after-sales service. This is a direct response to a series of high-profile cases where influencers promoted counterfeit or substandard goods, leading to massive consumer complaints and legal disputes.
Enforcement, Penalties, and the "Blacklist" System
The enforcement mechanism described in Chapter IV is multifaceted. Article 25 grants provincial-level authorities the power to conduct "regulatory talks" (interviews) with the legal representatives of MCNs or platforms if security risks or incidents are discovered. These talks are often the first step in a formal investigation and require the entity to implement immediate "rectification" measures.
Financial penalties for violations are outlined in Article 26. In cases where existing laws (like the Cybersecurity Law) do not specify a penalty, authorities can issue warnings, public criticisms, and orders for correction. Fines range from 10,000 RMB to 100,000 RMB. However, if a violation results in "serious consequences" or harms public health and safety, the fine can be increased to 200,000 RMB.
Perhaps the most significant deterrent is the "Blacklist" system mentioned in Article 27. Entities or individuals who commit "serious acts of bad faith" in the internet information sector can be placed on a joint credit punishment list. This may result in a temporary or permanent ban from engaging in internet information services, effectively ending the career of an influencer or the operations of an agency.
Market Context and Supporting Data
The necessity for these provisions is underscored by the explosive growth of China’s MCN industry. According to data from iResearch, the number of MCN agencies in China grew from approximately 160 in 2015 to over 25,000 by 2023. The market value of the MCN industry, which includes advertising, e-commerce commissions, and virtual gifting, is estimated to have exceeded 500 billion RMB (approximately $70 billion USD).
With over 1 billion internet users in China and more than 800 million of them engaging with short-video platforms, MCNs have become the primary gatekeepers of public discourse. However, this growth has been accompanied by "chaos" (luanxiang). A 2023 report by the China Consumers Association noted that nearly 40% of consumers had experienced issues with livestreaming e-commerce, including false advertising and difficulty obtaining refunds. The CAC’s "Qinglang" (Clear and Bright) campaigns in 2022 and 2023 resulted in the closure of thousands of accounts and hundreds of agencies for spreading rumors or manipulating traffic.
Chronology of Regulatory Development
The release of these provisions is the culmination of a multi-year effort to bring the MCN industry under state control:
- 2021: The CAC first announced its intention to regulate MCNs following several high-profile tax evasion cases involving top-tier influencers.
- 2022: The CAC issued "Opinions on Strengthening the Standardized Management of MCN Agencies," which served as the conceptual precursor to the current provisions.
- 2024-2025: A series of draft regulations were circulated for public comment, focusing on data security and the "traffic economy."
- September 1, 2026: The current Provisions officially take effect, marking the start of a new era of institutionalized oversight for the industry.
Analysis of Implications
The implementation of these provisions signals a transition from "reactive" to "preventative" regulation. Previously, authorities would intervene after a scandal occurred. Now, by requiring MCNs to have internal content auditors and provincial filings, the government is creating a system of "distributed responsibility."
For MCN agencies, the cost of compliance will rise. Smaller agencies may struggle to maintain the required content management teams, potentially leading to a consolidation of the market where only larger, more professionalized firms survive. For creators, the "labeling" requirement (Article 11) may change the dynamic with their audience, as the "independent creator" persona becomes harder to maintain when an agency affiliation is clearly marked.
Industry analysts suggest that these rules will likely stabilize the e-commerce sector. By holding MCNs accountable for the products their influencers promote, the government is reducing the "wild west" nature of livestream sales. However, some observers worry that the broad language regarding "socialist values" and "harmful information" could lead to overly cautious content production, potentially stifling the creativity that made the industry successful in the first place.
Ultimately, the Provisions on the Management of Multi-Channel Distribution Services for Internet Information Content represent China’s most comprehensive attempt to date to govern the "intermediary layer" of the internet. By focusing on MCNs, the state is targeting the organizational structures that amplify content, ensuring that the digital "multi-channels" of the future are aligned with national stability and consumer safety.
Jia Lissa
Muslim
