УДК 659

Behind the Ban on Live Stream E-commerce: Data Privacy, Market Regulation, and Social Impact

Хэжань Жэхэти – магистр филологического факультета Российского университета дружбы народов.

Аbstract: The article explores the reasons and impacts of banning live stream e-commerce globally. It highlights the risks of data privacy breaches due to platforms collecting extensive user data, creating challenges for market regulation. The cross-border and real-time nature of live stream e-commerce complicates traditional oversight, necessitating new legal and regulatory approaches. Additionally, the article discusses how societal and cultural differences influence perceptions and acceptance of live stream e-commerce. While some cultures may prefer traditional retail, others are more open to digital alternatives. The decision to ban reflects a balance between digital economic growth and consumer protection, subject to changes with evolving technology and societal views. This comprehensive analysis offers insights into the legal and policy environment shaping the future of live stream e-commerce.

Keywords: Live Stream, E-commerce, Data Privacy, Market Regulation, Digital Economy, Consumer Protection, Cross-border Commerce.

On March 16, 2023, the American tech giant Facebook shut down its live stream e-commerce business, and TikTok, owned by China's ByteDance, also announced its abandonment of live stream e-commerce plans in Europe and America. By October 2023, 32 countries globally, including Indonesia, Vietnam, India, Malaysia, and the 27 member states of the European Union, have announced restrictions or bans on live stream e-commerce. The reasons for this development are manifold.

1. Data Privacy Leaks in Live Stream E-commerce.

The issue of privacy invasion and data breaches brought by live stream e-commerce is significant. In this digital age, data privacy and security have become crucial topics. Live stream e-commerce platforms typically handle a vast amount of user data, including personal information, shopping habits, and payment details. This data, if not adequately protected, could be vulnerable to hacking or misuse.

Privacy Concerns: Users might inadvertently reveal personal information during live e-commerce activities. For instance, during live interactions, they may share personal preferences and shopping habits. Improper collection and use of this data could lead to privacy violations.

Data Security Risks: Live e-commerce platforms need to collect and store extensive user data, making them potential targets for cyberattacks. Data breaches could threaten users' personal information and financial security.

Regulatory Challenges: The novelty and complexity of live e-commerce pose challenges for existing data protection laws and frameworks. Regulatory bodies must continually update and refine laws and regulations to better protect user data.

Importance of Technology and Education: To address these challenges, the development of technology and user education is essential. Measures such as enhancing data encryption, improving platform security, and educating users about privacy protection are necessary.

Overall, while live e-commerce offers convenience and new opportunities for consumers and businesses, the associated data privacy and security issues cannot be overlooked. A collective effort from industry participants, regulatory bodies, and technology developers is needed to ensure platform security and user data protection.

2. The Pressure of Live Stream E-commerce on Market Regulation.

The cross-border nature and immediacy of live stream e-commerce indeed place significant pressure on traditional market regulation, primarily manifested as:

Regulatory Scope and Jurisdictional Issues: Live stream e-commerce, operating across national borders, encounters diverse legal and regulatory frameworks, posing challenges to consistent regulation. For example, a platform legal in one country might violate laws in another, necessitating cross-national cooperation and unified legal standards.

Challenges of Real-Time Regulation: The real-time aspect of live streaming means that regulatory violations can occur and impact consumers swiftly, demanding faster response and processing capabilities from regulatory bodies.

Data Protection and Privacy: Live e-commerce's global data collection and processing present new challenges in data protection and privacy, requiring enforcement of data protection regulations to prevent misuse of consumer information.

Consumer Rights Protection: The cross-border nature of live e-commerce complicates the protection of consumer rights, especially in international transactions, demanding novel methods to safeguard national consumer interests.

3. The ban on live stream e-commerce can be viewed as consumer protection for several reasons.

Preventing Misleading Marketing: Live e-commerce, with its real-time interaction and influential hosts, can drive impulsive purchases leading to regret or financial loss.

Reducing Fraudulent Practices: Live e-commerce platforms may have issues like false advertising or selling counterfeit goods, harming consumer interests.

Data Privacy Protection: Live e-commerce platforms often collect extensive user data, which, if mishandled, could lead to privacy breaches.

Enhancing Consumer Rights Protection: Traditional e-commerce channels, in comparison to live streaming, might be easier to regulate, thus better protecting consumer rights.

Preventing Overconsumption: The interactive and immediate nature of live e-commerce might encourage excessive spending, especially in consumers with low self-control.

However, this approach can be controversial as it may limit market freedom and innovation, potentially suppressing emerging market growth and limiting consumer choices. This complex issue requires a balance of various factors and interests.

4. The impact of societal and cultural differences on live stream e-commerce is intricate, encompassing various aspects.

Consumer Behavior and Preferences: Cultural backgrounds influence preferences in products and shopping styles. Some cultures prioritize product quality and brand heritage, while others focus more on cost or trends. These preferences shape the content and marketing strategies of live stream e-commerce.

Shopping Habits: Societal shopping habits also affect the popularity of live stream e-commerce. Some societies prefer physical shopping experiences, whereas others lean towards the convenience of online shopping.

Technology Adoption: The acceptance and prevalence of technology vary by region. In areas with high technology adoption, live stream e-commerce might be more popular, aligning with the digital habits of consumers.

Trust and Credibility: The trust consumers place in live stream e-commerce platforms and hosts is influenced by their societal and cultural backgrounds. In some cultures, consumers may prefer hosts with whom they share a cultural connection or identity.

Legal and Regulatory Environment: The legal and regulatory landscape in different countries and regions impacts live stream e-commerce operations. Stringent consumer protection and data privacy laws in some countries could restrict certain practices in live stream e-commerce.

Language and Communication: Live stream e-commerce needs to consider language and communication preferences across regions. The content and interaction methods must adapt to the communication styles and expectations of different cultures.

These elements collectively shape how live stream e-commerce is approached and received in various cultural contexts.

5. To combat wealth concentration and ensure a fairer distribution of economic benefits in the market.

Reducing Wealth Concentration: Live stream e-commerce, especially in its current form, often leads to significant wealth accumulation by a few individuals or companies. This can exacerbate wealth inequality, as the success of these platforms often depends on algorithms and network effects that favor already popular entities. By limiting such e-commerce practices, it's possible that wealth distribution could become less skewed.

Supporting Small and Medium Enterprises (SMEs): Traditional retail and SMEs often find it challenging to compete with the massive reach and resources of large e-commerce platforms. Restrictive measures on live stream e-commerce could level the playing field, giving SMEs a better chance to thrive and contribute to a more equitable economic landscape.

Diversifying Economic Opportunities: When e-commerce dominates the retail sector, it can lead to a homogenization of economic opportunities, where success increasingly depends on digital presence and marketing. Restricting this dominance can help maintain a diverse range of economic activities, including those in the physical retail sector, thus offering a wider array of opportunities to different segments of the population.

Addressing Consumer Protection and Fair Practices: The rapid growth of e-commerce, including live stream selling, has raised concerns about consumer protection, data privacy, and fair business practices. Implementing restrictions can be a way to address these issues, ensuring that economic growth in the e-commerce sector does not come at the expense of consumer rights and ethical business conduct.

Encouraging Sustainable Consumption: The ease and impulsiveness of purchasing through live stream e-commerce platforms can lead to overconsumption and wasteful practices. By curbing these practices, it might encourage more thoughtful and sustainable consumption habits among consumers.

It's important to note that while these measures could contribute to a fairer distribution of economic benefits and combat wealth concentration, they must be carefully designed and implemented to avoid unintended consequences. For instance, overly restrictive policies might stifle innovation and convenience that e-commerce platforms offer. The key is finding a balance that promotes fair competition, supports diverse economic opportunities, and protects consumers and small businesses, while also embracing the benefits of digital advancements.

The measures taken by the United States and European countries, among others, to prohibit or restrict live stream e-commerce reflect concerns about the challenges and impacts arising from the rapid development of e-commerce. These measures aim to restore market competition balance, revitalize traditional retail, and potentially increase employment opportunities in the retail sector.

On one hand, the convenience of e-commerce, allowing consumers to shop without leaving their homes, is undeniable. However, this mode of shopping, if it persists over the long term, might gradually weaken the demand for traditional in-person retail shopping, even altering some essential aspects of our lifestyles. To remind people that while pursuing shopping convenience, the importance of the physical economy should not be overlooked, various countries have introduced policies to limit or prohibit e-commerce. The physical economy provides employment opportunities across various sectors, supports the development of small and medium-sized enterprises, and promotes the healthy development of the social economy.

The development of e-commerce is an inevitable trend, but it's essential not to blindly pursue convenience at the expense of other vital elements. The policies of various countries aim to continue promoting the development of e-commerce while finding a balance between the physical economy and e-commerce, to enrich our lives with more diversity, quality, and warmth.

In summary, these measures demonstrate an understanding of the challenges that the rapid growth of e-commerce poses to traditional retail. They represent an effort to balance the relationship between e-commerce and the physical economy, aiming to foster a more diverse and sustainable economic model while protecting and revitalizing the traditional retail market.

Сonclusion

This article discusses the significant issues of data privacy, the challenges in market regulation due to the cross-border and real-time nature of live e-commerce, and the varied societal and cultural responses to these platforms. The paper reveals the need for a balanced approach that considers both consumer protection and market innovation. It emphasizes the importance of updating regulatory frameworks, enhancing data security measures, and recognizing the diverse consumer behaviors influenced by cultural differences. The paper suggests that while live e-commerce presents new opportunities, it also raises critical questions about privacy, consumer rights, and the adaptability of legal systems in the digital age. This analysis provides valuable insights for policymakers, businesses, and scholars in understanding the complex dynamics of the digital marketplace and its regulatory environment.

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