CHANG TSI
Insights
On June 27, 2025, the third amendment to China’s Anti-Unfair Competition Law (AUCL) was passed and will take effect on October 15, 2025. On the day of its adoption, we released an overview of the revision (accessible here).
This review—divided into two parts—will analyze the specific revisions in the third AUCL amendment, focusing on the “confusion provisions” and online unfair competition, to explore their practical implications for future IP protection. The previous article detailed how Article 7 of the new AUCL improves upon Article 6 of the current law regarding “confusion provisions”, including three major enhancements: expanding the scope of protected distinctive signs, specifying the types of confusion acts, and clarifying aiding confusion acts. This article will focus on another key aspect of the revisions—— Article 13 ("Internet-Specific Provision," formerly Article 12). The revised provision primarily features two major changes: 1. Highlighting the protection of data rights by explicitly listing "obtaining or using data lawfully held by other operators by improper methods" as an unfair competition; 2. Adding regulations targeting the "abuse of platform rules," explicitly categorizing practices such as conducting false transactions, false evaluations, and malicious returns as unfair competition. The following sections will provide a detailed introduction to these amendments.
The enhanced protection of data rights under Article 13(3) of the revised AUCL undoubtedly stands as one of the highlights of this amendment. Compared to multiple draft versions during the revision process, the final version introduces significant refinements in three key aspects. First, it explicitly regulates data scraping activities, replacing the vague references to "technical means" or "electronic intrusion" with a clear prohibition against data scraping that involves "fraud, coercion, circumvention, sabotage of technical or management measures." Second, the applicability condition has been expanded from "obtain and use" to "obtain or use," thereby extending regulation to purely illegal data acquisition. Third, a consequence requirement has been added, stipulating that improper data scraping must "harming their lawful rights and interests and disrupting the order of market competition," aligning with prevailing standards of judicial precedents.
In recent years, in China, data-related unfair competition has consistently been a focal point under the AUCL. As a new form of production factor, data has become deeply integrated into every aspect of Chinese society. According to International Data Corporation (IDC) projections, driven by emerging technologies such as industrial digitization and cloud computing expansion, China's data volume is expected to reach 51.78 ZB (zettabytes; 1 ZB ≈ 1 trillion gigabytes) by 2025, potentially growing to 136.12 ZB by 2029, with over 80% being enterprise data.[1] Consequently, in the context of massive data volumes and diverse application scenarios, the AUCL carries significant practical implications and represents an immediate need for the rule of law to fairly safeguard enterprises' legitimate data rights and maintain market competition.
In judicial practice, the typical cases of unfair competition promulgated across various regions uniformly include regulations addressing improper data scraping activities. For instance, in China's first unfair competition dispute involving online encyclopedia entries, the defendant company used technical means to scrape entries in bulk from the plaintiff's encyclopedia website and posted them on its own platform with fabricated user information. The court ruled this constituted unfair competition, ordering the cessation of infringement and awarding RMB 8 million (approx. USD 1.1 million) in damages. [2] Similarly, in the case concerning unfair competition over data rights on the Rednote Platform, where the defendant utilized technical means to illegally scrape user data from the Rednote Platform—including user account information and commercial collaboration details. The court determined that such technical means constituted unfair competition from the perspectives of data dimensions, method dimensions, and damage dimensions. The judgment ruled the cessation of infringement, payment of compensation amounting to RMB 4.9 million (approx. USD 675,000) in damages, and publication of a statement to eliminate adverse effects. [3]
In both cases, courts provided detailed jurisprudential reasoning on key points: whether data rights merit protection and how bulk data scraping undermines fair market competition. Although explicit statutory guidance was absent at the time, judicial practice had gradually established relatively consistent adjudicative standards through such precedents. Notably, the new AUCL align precisely with these judicial developments. With the formal implementation, the courts will adopt a clearer and more unified approach in identifying and penalizing unfair competition behaviors such as data scraping, while the lawful data rights of enterprises will be more explicitly safeguarded.
Article 13(4) of the revised AUCL further refines the prohibition against unfair competition through "abuse of platform rules", explicitly listing three prohibited practices: fictitious transactions, fabricate reviews, and initiate malicious product returns, "negative click farming" has thus been brought within the scope of regulation. It is worth noting that the attention to and regulation of negative click farming were already reflected in the Article 16 of the Interim Provisions on Anti-Unfair Competition on the Internet issued in 2024. Its incorporation into the "Internet-Specific Provision" of the revised AUCL demonstrates the legislators' focus on this matter.
Click farming generally includes two types: positive click farming and negative click farming. Positive click farming primarily refers to online store operators using technical means to fabricate fictitious transactions or reviews to gain an unfair competitive advantage. Negative click farming, on the other hand, targets competitors by deliberately undermining the objective data of rival stores or intentionally triggering platform regulatory mechanisms to cause penalties against competitors, thereby reducing their competitive advantage. [4] In China's judicial practice, positive click farming has become a key target for administrative regulatory authorities. Negative click farming also significantly disrupts normal market operations, and severe cases may even constitute criminal offenses. However, current laws lack clear and effective evaluation standards for determining civil liability in such cases. In China’s first e-commerce platform lawsuit against negative click farming in 2015, the Nanjing court ruled that the suspect's malicious bulk purchases of products from a competitor's online store, which misled the platform into identifying the competitor as engaging in fictitious transactions and subsequently imposing search ranking penalties, constituted the crime of disrupting production and business operations. [5]
After multiple revisions, the revised AUCL ultimately adopted a final version that removed extensive descriptions of specific behaviors. Instead, it employs the phrase "shall not abuse platform rules" and explicitly identifies three forms of unfair competition, namely "fictitious transactions, fabricate reviews, or initiate malicious product returns." This approach is better suited to addressing the ever-evolving dynamics of online competition. Mirroring the framework for data rights protection, abuse of platform rules shall meet the consequence requirement of “harming their lawful rights and interests and disrupting the order of market competition”. This serves as a mechanism to balance the interests among various online business operators.
Beyond refining the “Confusion Provision” and “Internet-Specific Provision”, the newly revised Anti-Unfair Competition Law takes a further step toward fostering a healthy market environment. Key advancements include elevating the maximum fine for unfair competition through the Internet from RMB 3 million to RMB 5 million and strengthening the management and accountability obligations of platform operators. Upon implementation, these substantially heightened penalties are expected to enhance its deterrent effect, while the provisions concerning platform responsibilities are anticipated to effectively promote the establishment of a fair competition order within online platforms. Platform operators are now required to proactively uphold fair competition by establishing internal rules and promptly report unfair competition behaviors to the supervisory and inspection authority of the people’s government. Additionally, refined complaint mechanisms will empower rights holders to efficiently safeguard their interests.
An overview of the third amendment of the AUCL highlights one of its key themes: "responding to the times." China is currently in an era driven by knowledge, information, and data, with the digital economy flourishing. Traditional competition rules often struggle to address new challenges such as platform economies, algorithmic decision-making, data disputes, and traffic monopolies. Born at the inception of the market economy, China's AUCL has undergone three intensive revisions over eight years, responding to the profound changes brought by the digital economy. The third amendment marks a new milestone in the evolution of China's competition law framework. We will continue to monitor the practical application of the revised law.
[1] IDC China: IDC Insight: China's Data Generation Volume to Exceed 136 ZB by 2029, IDC Consulting, available at: https://mp.weixin.qq.com/s/DoXvnA8S1cNdPvmHfBuXsA, (last visited July 7, 2025).
[2] Yang Dejia & Li Sidi: Haidian Court Adjudicates Nation's First Data Competition Case Involving Online Encyclopedia Entries, Haidian Court Website, available at: https://bjhdfy.bjcourt.gov.cn/article/detail/2025/04/id/8811447.shtml, (last visited July 7, 2025).
[3] Hangzhou Intermediate People's Court of Zhejiang Province, (2024) Zhe 01 Min Zhong No.4347.
[4] Research Group of Shanghai No.1 Intermediate People's Court: Liability Determination for Entities in Fraudulent and Manipulative Practices Involving Credit Ratings, 22 People’s Judicature (2022).
[5] Nanjing Intermediate People’s Court of Jiangsu Province, (2016) Su 01 Xing Zhong No.33.
