GAPP Issues Notice Further Restricting Foreign Participation In China’s Internet Gaming Industry

INTRODUCTION

On September 28, 2009, the PRC General Administration of Press and Publication ("GAPP"), National Copyright Administration, and National Office of Combating Pornography and Illegal Publications jointly published the Notice Regarding the Consistent Implementation of the "Stipulations on 'Three Provisions'" of the State Council and the Relevant Interpretations of the State Commission Office for Public Sector Reform and the Further Strengthening of the Administration of Pre-examination and Approval of Internet Games and the Examination and Approval of Imported Internet Games (Xin Chu Lian [2009] No. 13, "Notice 13"). Notice 13 restates the general principle espoused in recently promulgated regulations that foreign investment is not permitted in Internet game operating businesses in China. In addition, Notice 13 expressly prohibits foreign investors from using contractual or other control arrangements to gain control over domestic Internet game operators.