Data protection Illustration: VCG

South China's Shenzhen is introducing the first property rights framework covering personal data across the country as cities like Beijing and Shanghai speed up with data legislation reform.

A draft data management regulation which first clarified the ownership of personal data, is seeking public opinion in Shenzhen, South China's Guangdong Province, as China ramps up efforts to improve the legal framework covering personal information protection, data ownership and data monopoly.

The draft regulation first proposed that individuals possess the property rights on the data services and products compiled using personal data, such as their consumption records. They can either use the data independently according to law or derive profits by selling to other users.

This comes as the first local regulation on data in China and the first to clarify the ownership of data rights and interests.

After defining the ownership of personal data, the regulation also makes it clear that individuals have the right to know about and approve the use and processing of their personal data, with further rights to restrict or refuse its use by non-authorized parties.

The legislation also emphasized the principle of fair competition in data, forbidding internet platforms from applying differential treatment and offers to users, such as charging higher fees for existing customers versus new customers. 

Violation of these new regulations will lead to heavy penalties up to 50 million yuan ($7.83 million) or 5 percent of the turnover of the previous year.

The draft also added new terms on minors data protection, forbidding platforms to collect large amount of information about minor users and create detailed online behavioral profiles of individuals. 

Personal data from minors should be regarded as sensitive personal data, along with facial recognition, fingerprint data, iris recognition and other biometric technologies which demand the data processer to have high ability to secure these data.

In addition to Shenzhen, cities like Beijing and Shanghai are also speeding up data protection reform.

In April, China University of Political Science and Law has joined in a data legislation research and demonstration support service project in Beijing which is widely seen as the launch of Beijing's data legislation.

Shanghai authorities recently held a seminar on data legislation. The draft is to be submitted to the National People's Congress for first instance in September, which aims at making breakthroughs in key bottleneck issues such as data right ownership and data transaction.

Guo Shuqing, Chairman of the China Banking and Insurance Regulatory Commission, pointed out last year that ownership of the data property rights is a fundamental issue when it comes to data market allocation and compensation pricing. 

At present the ownership of data is largely in the hands of large technology companies as there has been no clear law on the ownership worldwide.

Guo has called on to clarify the data rights and interests, promote and improve the data flow and price formation mechanism, make full and fair use of data value, and protect the interests of all trading subjects according to law.