At the end of 2024, the official website of the Standing Committee of the National People's Congress announced the "Anti-Unfair Competition Law (Revised Draft)" (hereinafter referred to as the "Revised Draft") and opened for public comments. The Revised Draft represents the third major revision since the formal implementation of the "Anti-Unfair Competition Law," increasing the number of articles from the current thirty-three to forty-eight. The Revised Draft includes the following highlights:

(1) The Revised Draft incorporates relevant provisions from the judicial interpretations of the "Anti-Unfair Competition Law," explicitly listing "unauthorized use of another's registered trademark or unregistered well-known trademark as an enterprise name" as a legally prohibited act of confusion. Additionally, to meet the practical needs of the mobile internet market and drawing on judicial experience, the Revised Draft also explicitly includes "new media account names, application names, or icons" as new objects of protection and provides clear regulations on behaviors such as keyword searching and fake reviews.

(2) Strengthening the Protection of Data Security. The Revised Draft provides detailed regulations on unfair competition behaviors in the digital economy sector, specifically addressing data acquisition and usage, as well as network unfair competition behaviors implemented through algorithms and technology. It explicitly lists scenarios such as "acquiring and using data legally held by other operators through unfair means such as fraud, coercion, or electronic intrusion" and "abusing platform rules to engage in malicious transactions" as prohibited behaviors for operators engaging in production and business activities via the internet. This reflects the legislative body's emphasis on the protection of data.

(3) Strengthen the Governance and Crackdown on Unfair Practices such as False Advertising, Improper prize promotions, Commercial Defamation, and Commercial Bribery. The revised draft strengthens the governance and crackdown on unfair practices such as false advertising, improper prize promotions, commercial defamation, and commercial bribery. It introduces new unfair competition scenarios, including changing the conditions after the prize promotion activity has begun. The scope of false advertising has been expanded from "consumers" to include "other operators," and false reviews are now specifically listed as a form of false advertising. Additionally, "instructing others to fabricate or spread false or misleading information" is now directly classified as commercial defamation, and the protection scope of commercial defamation has been expanded from competitors in the same industry to "other operators." Furthermore, the revised draft introduces legal liability for the recipients of bribes and increases the penalties for commercial bribery.

(4) Introducing Extraterritorial Jurisdiction for Unfair Competition Behaviors. The Revised Draft stipulates that "unfair competition behaviors conducted outside the territory of the People's Republic of China that disrupt the domestic market competition order or harm the legitimate rights and interests of domestic operators shall be dealt with in accordance with this law and relevant laws."

Implications for Corporate Compliance Work

Firstly, the Revised Draft explicitly categorizes data scraping as an act of unfair competition for the first time. This imposes higher requirements on corporate data compliance from the perspective of unfair competition. Companies should scrutinize the legality of their data sources and the legitimacy of their data acquisition methods in their daily operations to avoid legal risks related to data compliance and unfair competition.

Secondly, the revised draft clarifies that the Anti-Unfair Competition Law has jurisdiction over acts conducted abroad that may affect the competitive order of the Chinese domestic market. This imposes higher requirements on the compliance work of multinational companies. When assessing the compliance of a market behavior, companies must consider not only the local laws and compliance risks of the place where the behavior occurs but also the relevant provisions of the Anti-Unfair Competition Law to avoid compliance risks and legal liabilities.

With this revision, the Anti-Unfair Competition Law will provide a more solid legal foundation for companies to protect their rights. On the other hand, it also poses new challenges and requirements for corporate compliance work. Companies should establish and improve their compliance systems, based on their actual business needs and in conjunction with the revisions to the Anti-Unfair Competition Law. This includes multiple dimensions such as intellectual property application, data compliance, and commercial promotion. It is suggested to strengthen internal audits and training, identify and promptly correct potential compliance issues. Additionally, companies should enhance cooperation with professional legal advisors to stay updated on the latest legal developments and compliance advice, ensuring the professionalism and effectiveness of their compliance management.