China has essentially moved forward with the plans that country's delegates proposed during the ITU Treaty talks in Dubai earlier this month. In what is ostensibly meant to protect its citizens' privacy, the Chinese government has imposed new regulations that prohibit Internet users from creating accounts using "fake names." The mandate also requires ISP's to remove "illegal" postings or sites and report such activity to the Ministry.

Echoes of WCIT

The Chinese, along with the Russians and other International Telecommunications Union delegates, made waves at the recent World Conference on International Telecommunications with their joint proposal to allow for more direct government control over the regulation of cyber-traffic. The proposal was later withdrawn under much controversy and opposition from less restrictive member states who feared censorship was the ulterior motive behind the proposal. But as reported in The New York Times, China appears to have gone ahead and imposed the restrictions outlined in the joint proposal within its own cyber borders.

The laws are apparently targeted primarily at network providers for mobile devices. However, China has also taken several steps in recent weeks to try to block or restrict access to internationally based websites, Google being a highly publicized example. Internet Service Providers, whether "fixed line" or for mobile access, are now required to demand proof of identity from their subscribers, though users are not prohibited from adopting screen names or "handles" as part of their online presence. The new laws also prohibit the selling or otherwise releasing of digital information by any entity or agency of web user information. However, this clause has been deemed by many observers to have been included merely as a way to detract from the thinly veiled censorship the regulations allow. ISP's must also report online activity deemed "illegal," however a specific definition of what that might entail has not been provided.

Potential Effect

This latter issue is what may be of most concern to midsize businesses, particularly those that market with the Asian superpower. The lack of clarity in the regulations about what constitutes illegal cyber activity could potentially be very disruptive to midsize businesses trading with or within China. The other major concern for some midsize enterprises is that Virtual Private Networks, formerly a way to stave off intrusive government oversight, are no longer excluded from regulation. Over the past couple of years, China has put in a great deal of effort to implement ways to track and block VPN's, but only began imposing wide-scale policing in the last few months. What this could mean for corporate privacy and liabilities for companies doing business in China will likely begin to unfold over the next several months.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. Like us on Facebook. Follow us on Twitter.