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China to Strengthen Regulation of Online Competition

Fri, 01 Oct 2021
Categories: China Legal Trends

On 17 Aug. 2021, the State Administration for Market Regulation released the “Provisions on Prohibiting Acts of Unfair Competition on the Internet (Draft for Public Comment) (hereinafter “the Provisions”, 禁止网络不正当竞争行为规定(公开征求意见稿)) to gather public opinions until 15 Sept. 2021, which defines unfair competition in the network scene and stipulates standards for determining malicious incompatibility

The Provisions clarifies the concept and connotation of unfair competition in the network scene. With attention paid to the characteristics of the Internet, Chapter 3 of the Provisions strengthens the regulation of competition acts by prohibiting the use of technical means to commit acts of unfair competition like obstruction and interference. Therefore, operators shall not prevent or disrupt the normal operation of network products or services legally provided by other operators by means of influencing users' choices or otherwise through data, algorithms, or other technical means to commit acts such as traffic hijacking, interference, and malicious incompatibility.

The issue of malicious incompatibility is controversial in both theory and practice, especially when it comes to how to determine this type of unfair competition. Article 16 of the Provisions has taken seven factors of incompatibility into account: the subjective intent, the scope of targets, the impact on the order of market competition, the impact on the normal operation of online products and services legally provided by other operators, and the impact on the legitimate rights and interests of consumers and social welfare, thus providing specific criteria for determining malicious incompatibility and strengthening its feasibility.

 

 

Cover Photo by Jennifer Chen (https://unsplash.com/@jnnfrchn) on Unsplash

Contributors: CJO Staff Contributors Team

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