(Yicai Global) June 3 -- The Shenzhen government has released a draft law aimed at reining in the practice of using Big Data-generated algorithms to charge different customers different prices for the same product with a maximum fine of CNY50 million (USD7.8 million).

Internet-based firms’ access to vast amounts of individuals’ online spending habits has led to targeting marketing and increasingly also to differential pricing. Around 57 percent of respondents in a survey conducted by the Beijing Consumer Association said they had experienced price discrimination on online sites, a practice known colloquially as ‘shashu.’

Market entities may not infringe on the legitimate rights and interests of other market entities or consumers, and shall not, through data analysis, treat trading counterparts with the same trading conditions in a differentiated manner without justifiable reasons, according to the draft law released by the Shenzhen Municipal People's Congress yesterday which is now open to feedback from the public.

A public-interest litigation mechanism in the field of data will be established, the draft said. Related industry bodies and the people's procuratorates can, in accordance with the law, file civil or administrative public-interest lawsuits against those who fail to fulfil the responsibility of data security protection or who damage the interests of the country or the public by illegal data harvesting.

Offenders will be fined up to CNY200,000 (USD31,338) for unlawful gains under CNY10,000 (USD1,500), up to CNY1 million (USD156,690) for unlawful gains over CNY10,000 with a maximum penalty of CNY50 million for very serious cases, the draft said. All illicit profits will be confiscated and business licenses might also be revoked.

Editor: Kim Taylor