Regulating Unfair Competition in Digital Economy: SAMR Seeks Comments on Draft Amendments of Anti-Unfair Competition Law

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On 22 November 2022, the State Administration for Market Regulation (“SAMR”) published the Anti-Unfair Competition Law of the People’s Republic of China (Draft amendments for public comments) (the “Draft Amendments”). This is the second time that China puts the amendment of the Anti-Unfair Competition Law on the legislative agenda, following its first amendment in 2019.

Against the rapid development of digital economy, the Draft Amendments capture new types of unfair competition behaviors under its radar. Some major changes under the Draft Amendments include:

  • Regulating the new types of Internet-based unfair competition behaviors, such as malicious purchases, traffic hijacking by misuse of key word searches, platform blocking, data crawling and big-data discrimination;
  • Adding back the long debated “relative market power position” provision (Article 13), which aims to strengthen the protection of protect the rights and interests of small and medium-sized entities in the market players ; and
  • Clarifying that facilitating others to commit unfair competition conducts may also be held illegal, which may impose heavier obligation on Internet platforms to supervise the conducts of online merchants.

We expect that the Anti-Unfair Competition Law, together with the PRC Anti-monopoly Law will more comprehensively supervise the anti-competitive conducts and will contribute to a more fair and open market environment in China