Is it illegal to use another’s game licence?

By Jeff Yang, Wang Jing & GH Law Firm
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Since the implementation of the Administrative Regulations on Internet Publishing Services in 2016, the national publishing administrative authorities have continually tightened the approval and supervisory rules of game publishing licences. Possessing such a licence is a qualification threshold for the legal operation of online game products.

As a result of the tightening, the progress of issuing game publishing licences now falls significantly short of the demand for licences in the domestic online gaming industry, making game publishing licences a scarce resource in the industry. Without a licence, a game cannot be launched for operation. This is resulting in some game companies lacking income and facing existential threats.

Jeff Yang, Wang Jing & GH Law Firm
Jeff Yang
Director
Wang Jing & GH Law Firm

Against this backdrop, some game companies are choosing to privately trade game publishing licences and commercially operate their games that have not obtained licences by using purchased licence information. This behaviour is essentially an unauthorised operation of games without a licence.

Whether the practice of using another’s publishing licence constitutes a crime has sparked considerable controversy. This article will delve into this issue.

Article 225 of Criminal Law clearly stipulates the elements of the crime of illegal business operation: “violation of state regulations” is one of the conditions for prosecution.

Therefore, the primary issue to be addressed is whether the practice of using another’s publishing licence violates state regulations.

Legal interpretation

According to the Notice of the Supreme People’s Court on Accurately Understanding and Applying the Issues Concerning the Interpretation of State Regulations in Criminal Law, “state regulations” refers to laws and decisions formulated by the National People’s Congress and its standing committee, administrative regulations, rules, decisions and orders formulated by the State Council.

Documents issued in the name of the General Office of the State Council should be considered as state regulations under specific conditions. Acts that violate local regulations or departmental rules should not be deemed as violations of state regulations. Whether a defendant’s actions constitute a violation of state regulations should be treated as a matter of legal application and referred to the Supreme People’s Court for guidance.

From the above-mentioned documents, it can be inferred that the state regulations in the crime of illegal business operation have strict requirements regarding drafting authorities and the type of documents. Departmental rules and local regulations do not fall within the scope of state regulations in criminal law.

Different perspectives

Regarding whether the practice of using another’s publishing licence constitutes the crime of illegal business operation, it is necessary to further confirm whether the relevant regulations on game publishing licences fall within the scope of state regulations.

Based on the author’s experience in handling similar cases, there are two prevailing viewpoints in practice. The first viewpoint holds that the relevant regulations on game publishing licences do not belong to the state regulations in criminal law.

Currently, the direct requirement for online games to obtain a licence before going online comes from the following regulatory documents: article 27 of the Provision on the Administration of Online Publishing Services (2016), formulated by the National Press and Publication Administration (NPPA) and the Ministry of Industry and Information Technology states that, before online publication, online games must apply to the publication administrative department of a provincial, autonomous region or municipality directly and, after approval, report to the NPPA for approval. The legal force level of this regulation is that of departmental rules.

This viewpoint argues that the legal force level of the provision belongs to departmental rules formulated by the subordinate departments under the State Council, which does not fall under the state regulations in criminal law. Therefore, the practice of using another’s publishing licence does not meet the conditions for the crime of illegal business operation.

The second viewpoint holds that, according to the Regulations on Publication Administration formulated by the State Council, newspapers, periodicals, books, audio and video products, electronic publications and other publications should be published by qualified publishing units.

Although online games are not mentioned in the regulations, the listing of “other publications” implies that it is not an exhaustive list and there are other forms of publications beyond those listed. Combining the clear statements in the provisions that online games belong to online publications, the status of online games as publications is beyond doubt.

Therefore, the practice of using another’s publishing licence essentially violates the regulations. Conducting business operations by applying others’ licences to online games that should not be published by publishing units constitutes a violation of state regulations in criminal law.

However, proponents of the first viewpoint dissent, arguing that expanding the scope of publications defined by the regulations is erroneous. Although the regulations were promulgated in 2001, the last amendment occurred in November 2020. There have been five revisions in total, with three revisions taking place after the formal implementation of the provisions, indicating that the State Council had no intention of managing online games as publications when amending the regulations.

Despite the existence of these two conflicting viewpoints, the author believes that the crime of illegal business operation should be strictly restricted and not subject to an unlimited expansion of its scope of application.

Jeff Yang is a director at Wang Jing & GH Law Firm

Wang Jing & GH Law FirmWang Jing & GH Law Firm
14, 17/F, Central Tower
5 Xiancun Road, Zhujiang New Town
Tianhe District, Guangzhou 510623, China
Tel: +86 20 3564 1888
Fax: +86 20 3564 1899
E-mail: yj@wjngh.cn
www.wjngh.cn

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