Brian Hioeby Brian Hioe
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Photo Credit: bfishadow/Flickr/CC BY 2.0
ADS FOR CHINESE e-commerce platform Taobao recently appeared in the Taipei MRT. The ads appeared both on subway platforms and in subway cars themselves.
It may not be surprising, then, that this has led to criticisms of the Taipei city government for approving the ads. Namely, Taobao advertising in Taiwan in this manner is illegal, and contravenes relevant cross-strait regulations.
Among those critical of the ad placements has been the Economic Democracy Union (EDU), the main group that coordinated the Bluebird Movement protests earlier this year. DPP legislator Puma Shen, an expert on Chinese disinformation operations and United Front activity, was also among those to participate in the EDU’s press conference on the ad placement.
The EDU criticized the ad placement as violating Article 420-1 of the Act Governing Relations between the People of the Taiwan Area and the Mainland Area.
Unless permitted by the competent authorities and having established in the Taiwan Area a branch or liaison office, neither a profit-seeking enterprise of the Mainland Area nor a profit-seeking enterprise it invested in a third area may engage in any business activities in Taiwan […] the scope of business activities or operations and any other requirements regarding a profit-seeking enterprise of the Mainland Area and a profit-seeking enterprise it invested in a third area as referred to in the preceding paragraph shall be drafted by the Ministry of Economic Affairs and submitted to the Executive Yuan for approval.
Photo credit: CC BY 3.0
In this sense, part of the criticism of the ad was for skirting around ordinances required for approval for Chinese businesses to operate in Taiwan. Nevertheless, the EDU also criticized Taobao itself for engaging in unfair trade practices designed to flood the Taiwanese market with cheap products and, in this way, gain market control.
The controversy proves similar to Chinese over-the-top providers. In 2020, the Tsai administration moved to ban Taiwanese companies or individuals from acting as local agents for Chinese OTT providers. OTT providers are online streaming services such as Netflix, as distinguished from traditional cable or satellite networks.
Legislation to ban Taiwanese companies and individuals from acting as representatives for Chinese OTT providers was rolled out alongside new restrictions on Chinese investment in Taiwanese companies from the Ministry of Economic Affairs. Chinese OTT providers are not allowed to operate in Taiwan by the Taiwanese government, much as Taiwanese OTT providers are not allowed to operate in China, and so the justification for banning Chinese OTT providers was partly on the basis that Taiwan is unable to enforce regulatory measures on Chinese companies.
To this extent, one may expect similarly with regards to how any subsequent scandal plays out. Namely, one of the reasons as to why Taobao ads in Taipei are a hotbed issue is because the current mayoral administration of Taipei is KMT-controlled. As such, the Chiang mayorship, which has otherwise defended the approval of the ads, is likely to see criticism with the allegation that it is allowing for Chinese United Front activity in Taiwan.
Indeed, the KMT eventually framed the Tsai administration’s actions on OTT providers as a form of political censorship, rather than a regulatory measure on investment. While OTT providers were asked to register with the government under new regulations, the KMT claimed that this registration system could be used as a way to politically monitor, blacklist, or take off air OTT providers that do not comply with the wishes of the government, and that the government intends to fine OTT providers that do not register with the government.
Ironically, this occurred despite the fact that the Taiwanese government did not move to ban the use of Chinese OTT providers, seeing as such OTT providers operate through servers in Hong Kong, and removing them entirely from the Internet would raise questions regarding limitations on freedoms of speech.
It is possible that the KMT will defend Taobao ads in the Taipei metro system on similar grounds, alleging violations of freedom of speech, and restrictions on valid cross-strait exchanges. This is to be seen.