China Data Privacy: New rules on use of algorithms for digital business, data analytics and decision-making

The new "Administrative Regulations on Algorithm Recommendation of Internet Business Services" comes into force on 1 March 2022, and will introduce important rules on the use of algorithms when operating digital platforms/websites/apps – including targeted marketing – in China. The new regulations are designed to ensure greater transparency for online users, and also avoid use of algorithms that promote addictive use of sites/apps or deployment of "recommendations" by way of algorithms to promote sales.

Users must be given choices to navigate around a site without algorithm recommendations. Users must also be notified if algorithm recommendations are deployed on a site/platform/app – we anticipate this will be included in the privacy policy or website terms of use. Algorithms should also not be used to provide online content or services based on personal characteristics of the users unless users are given the choice to opt-out. Finally, users must be allowed to delete their individual tagging.

There is also a basic principle that the algorithm must "promote good values" and comply with China's cyber and national security regulations.

Operators of online services must implement a complaint channel and governance programme, and must monitor compliance with the new regulations. Use of certain specified algorithms (e.g. those that impact public opinion) must be registered with the relevant authority (the CAC) and a security assessment will need to be undertaken.