On November 22, 2022, the State Administration for Market Regulation issued an announcement on publicly soliciting opinions on the Anti-Unfair Competition Law of the People's Republic of China (Draft for Comments). The deadline for feedback is December 22, 2022.
The main revised contents of the draft are as follows:
1. Improved the rules for anti-unfair competition in the digital economy, and regulated and dealt with acts that disrupt the order of competition in the development of new economy, new forms of business and new models. In combination with the characteristics of competition in the digital economy, the draft made detailed provisions on new types of unfair competition on the Internet, such as unfair competition in data acquisition and use, unfair competition implemented by algorithms and obstruction of open sharing. At the same time, considering the complexity of the identification of unfair competition in the digital economy, the consideration factors for judging whether they constitute unfair competition are specified to enhance the predictability of the system and the standardization of law enforcement. In addition, it also stipulates the responsibility of platform operators to strengthen competition compliance management, promoting social co-governance of anti-unfair competition.
2. In view of the prominent problems existing in the practice of supervision and law enforcement, the existing manifestations of unfair competition are supplemented and improved. The false publicity clauses are detailed, and the behavior types of commercial publicity are described, so as to provide reference for distinguishing commercial publicity and advertising in law enforcement practice. Intensified efforts to crack down on organizing and helping false publicity, and clearly prohibited helping other operators to make false publicity by means of organizing false trade and fictitious evaluation. In case of any of the above illegal acts, the supervision and inspection department should order them to stop the illegal acts, confiscate the articles used for the illegal acts and illegal gains, and impose a fine of not less than 100,000 Yuan but not more than one million Yuan; if the circumstances are serious, a fine of not less than one million Yuan but not more than two million Yuan should be imposed, and the business license may be revoked. If an operator knows or should have known a false publicity act, but continues to provide services such as planning, producing or publishing, the punishment should be made in accordance with the preceding paragraph. Any operator who publishes false advertisements should be punished in accordance with the Advertising Law of the People's Republic of China.
3. Filled the legal gap and newly added types of unfair competition. One is newly adding the acts that undermine fair trade and strengthening the protection of the legitimate rights and interests of small and medium-sized market players. The draft typified the typical behaviors that damage fair trade, listed six kinds of behaviors such as "one of two" and forced tie-in, and gave guidance on how to judge "comparative advantage position" in the supplementary provisions. The other is newly adding malicious trade behaviors. For the behaviors that intentionally carry out malicious trade to trigger other operators to be punished by relevant rules, impeding or destroying the normal operation of other operators, they should be summarized, listed and prohibited.
4. Improved legal liabilities in accordance with the requirements of strengthening anti-unfair competition. Scientifically adjusted the amount of punishment for illegal acts. According to the need of law enforcement practice, in order to ensure that the fault is equal to punishment, the lower limit of punishment for false publicity is reduced; at the same time, further cracked down on those acts that undermine fair trade and unfair online competition, which are particularly serious and of a bad nature and seriously impaired the order of fair competition or the social public interest.
Source: SAMR
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