Taiwanese distributors representing iQiyi (愛奇藝) or other Chinese over-the-top (OTT) services would be barred from operating in the nation when the Ministry of Economic Affairs’ proposed changes to the list of businesses that are off limits to Chinese investors take effect on Sept. 3, the National Communications Commission (NCC) said yesterday.
The list, which was announced by the ministry on Tuesday, bans Taiwanese companies from serving as agents or offering retail or other intermediary services to Chinese individuals, judicial persons or OTT service providers in Taiwan.
On Monday, the ministry also announced that it would adopt stricter standards to define companies funded by Chinese investors.
Photo: Huang Pei-chun, Taipei Times
However, the NCC last week announced that it would hold the first public hearing on Sept. 3 on a draft Internet audiovisual service management act, which would specifically regulate OTT services.
Asked about the timing of the ministry’s announcement, NCC spokesman Wong Po-tsung (翁柏宗) said that the draft act was prepared in view of the developing OTT industry, adding that the restrictions imposed on Chinese OTT operators is only part of the act.
“The act was necessary because the cable television service operators have asked that the commission apply across-the-board standards to regulate all audiovisual service platforms, which should include OTT services. It was not stipulated just to address the problems caused by iQiyi and other Chinese OTT operators,” he said.
The nation’s audiovisual service industry is off limits to Chinese investors, and iQiyi’s agent in Taiwan, OTT Entertainment Ltd (歐銻銻娛樂), has contravened the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例) by representing a Chinese OTT operator, he said.
The ministry wanted to make the regulation clearer to the public by adding the OTT industry to the list, he added.
Wong reiterated that it is impossible for the government to ask iQiyi to be removed from the Internet, as the service is offered through its servers in Hong Kong.
Taiwan is a democratic country, and the government would not block people from watching the content broadcast on iQiyi, nor would people have to view them through virtual private networks, he said.
Taiwan has denied iQiyi so-called landing right, as China has also banned Taiwanese OTT operators from landing there, he said.
“Once the ministry’s new list takes effect, we would inform telecoms, Internet service providers and information service providers that they need to comply with the regulation. Those contravening the regulation would face a fine of NT$50,000 to NT$5 million [US$1,694 to US$169,446], per the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area,” Wong said.
Aside from agents, advertisers and marketing professionals recruited by Chinese OTT operators, the “intermediary services” covered by the list also include those offered by content delivery networks, Internet data providers, and payment and customer service operators, the commission said.
As iQiyi has about 2 million active users in the nation, Wong said that the commission would soon meet with consumer protection officials in the central and local governments to discuss how they should work together to protect the interests of subscribers.
After the new list takes effect, consumers would be making cross-border payments whenever they pay subscription fees to access iQiyi and would not have local customer service representatives to ask about their subscription problems, the commission said, adding that they might also experience lag when watching content on the platform.
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