31 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 WWW.LEGALBUSINESSONLINE.COM/CHINA GC INSIGHT The strong regulatory era that China’s TMT industry has experienced over the past two years may be coming to an end. According to the “Rise of TMT” series of reports issued by Guojin Securities Research Institute earlier this year, following a period of policy adjustments in 20212022, the TMT sector is ushering in a new era of “policy re-alignment and supply and demand recovery,” and the rapid development of generative artificial intelligence technology (“AIGC technology”) continues to expand the space for new imaginations of “technology + scenarios.” “TMT may have already amassed all the important characteristics to become a new main theme of the market.” In fact, despite the changing market and policy environments in the past few years, most TMT companies have continued to work on technological and product innovation. Supporting innovation under tightened regulation further highlights the professional competency and wisdom of TMT in-house teams. Zhu Chunyu, general counsel of T3 GO, a Nanjing-based smart travel company, tells ALB: “Smart travel is a highly competitive industry. T3 GO has always faced stiff competition from taxis, Internet giants, traditional auto manufacturers, and other players. We are able to stand out from so many peers partly because of our ongoing business innovation, which helps to attract and serve constantly changing consumer demands and travel experiences.” Zhu gives an example: “Recently, the in-house team has collaborated with business units to launch a new platform to integrate both taxi and privately-owned vehicle resources that are underutilized to meet increased ride-hailing needs from the clients.” During the aforementioned business innovation, “we were faced with relatively large compliance risks because relevant regulations had not been promulgated, and the attitudes of regulators in different regions were also inconsistent.” As such, the in-house team “on the one hand, provided forward-looking legal research before the business went live to offer compliance guidance for different regions; on the other hand, conducted studies and engaged in talks with regulators to facilitate their understanding and approval of the new business.” Xing Jing, general manager of Du Xiaoman Legal and Compliance Department, shares that in the rapidly developing yet strictly regulated field, namely the fintech field, where his company operates, “balancing business innovation and compliance is something we have always been thinking about and facing.” To Xing, before focusing on any specific scenario, the in-house team must first grasp some general principles. Specifically, the in-house team should judge whether a financial product innovation can serve the real economy and the goal of inclusive finance, as well as safeguard the legitimate rights and interests of customers. “As long as innovation conforms to these principles, we will not be on the wrong track.” When it comes to translating the above ideas into product innovation, Xing gives the following example. “In recent years, there have been many cases of Internet financial products being used for telecommunications fraud and money laundering. The growth of artificial intelligence and other technologies has also lowered the bar for committing crimes. For example, deep fake technology has a tremendous ability to imitate the faces, voices, expressions, and other information of online targets. My team thus embarked on innovation to deploy computer vision technologies, such as biometric authentication, anti-deep fake, and visual risk control, to determine a customer’s real identity and transaction intention for use in scenarios such as anti-money laundering and anti-telecommunications fraud.” However, during this process, they have encountered new data protection compliance issues. “The anti-money laundering due diligence inevitably requires clients to provide personal information, which involves compliance issues related to information protection.”Xing explains that the Du Xiaoman legal team has thus taken a series of data protection measures, including fulfilling notification obligations in advance and properly discharging internal management duties after data collection. UPHOLDING DATA COMPLIANCE In the past few years, with the implementation of the “three major laws” on data compliance and the imposition of “billion-yuan fines” on corporate data breaches, data compliance has changed from a cutting-edge issue to an “obligation” and a “top priority.” This is particularly true for TMT companies that possess massive amounts of data. On the other hand, greater compliance pressure has also
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