The key types of unfair competition addressed by the Provisions
The Provisions contain a myriad of prohibited types of conduct, accompanied by examples of such types of conduct. These can be categorized into primarily the following forms of acts of unfair competition:
1. Acts that cause confusion as to the source of products or services, closely linked to IP protection. Echoing the pre-existing Anti-Unfair Competition Law, the Provisions expressly prohibit the below acts of confusion (Article 7):
- Unauthorized use of logos that are identical or similar to the main part of domain names, website names, web pages, etc. that have certain influence on others.
- Unauthorized use of third-party product names, business names (including abbreviations, brands, etc.), social organization names (including abbreviations, etc.), names (including pen names, stage names, translated names, etc.) that have certain influence as the main part of domain names and other online business activities;
- Unauthorized use of a logo identical or similar to the page design, name, icon, shape, etc. of the application software, online store, Client, mini program, official account, game interface, etc., that have certain influence on others.
- Unauthorized use of online nicknames, online symbols, online abbreviations and other identifications that have certain influence on others.
- The production and sale of products that may cause people to mistakenly think that they are products of others or have a specific connection with others.
- Jointly conducting acts of confusion with other business operators by providing convenient conditions such as network business sites.
- Other acts of online confusion, which are capable to cause people to mistakenly think that products originate from others or have a specific connection with others.
- Selecting third party brands as a keyword for internet searches may also fall under this category if it causes confusion or a presumption of a business connection.
2. Conducting misleading or false advertising via internet channels or internet promotion activities. Examples are misleading internet users or conducting false advertising via a company’s mini programs, official accounts, live-streaming rooms, etc., or by means of false platform recommendations, top searches, false rankings, false transaction records, displaying fictitious reservations, false numbers of clicks, views, likes, reads, votes, reviews, box office and audience ratings etc. (Articles 8 and 9).
3. Fabricating or disseminating misleading or false information that damages or may damage the commercial reputation and commodity reputation of competitors. Examples given in the Provisions include conspiring to provide malicious evaluations of competitors' products or spreading false or misleading information about others (Article 11).
4. Acts that hinder or impede the normal business operation lawfully provided by other business operators. The Provisions provide examples such as internet traffic hijacking, inserting links or forcing target jumping, misleading users to modify, shut down or uninstall third party network products, maliciously setting up incompatibilities for network products, blocking or screening the information content and pages of others, illegally obtaining and using data lawfully held by others etc. (Articles 12-22).
5. Certain acts of platform operators that may impede fair competition. The Provisions list for example using trading rules or any other means to impose unreasonable restrictions on operators on the platform as to transactions, transaction prices and transactions with other operators on the platform etc. (Articles 23-25).
Conclusion
The Provisions are doubtlessly very useful for companies operating in the online environment in China, as they clearly set out the broad principles and also list specific examples of prohibited online conduct that will be subject to the law enforcement by the administrative authorities. We believe that the new Provisions will be particularly helpful to substantiate legal complaints against such activities in the future. The Provisions are expected to provide greater clarity and a broader arsenal of weapons to companies encountering unfair competition on the Internet in China. We will continue to monitor how the administrative authorities will implement and enforce the Provisions in practice and, in the meantime, would be happy to further clarify any of its aspects.
Authored by Grace Guo and Stefaan Meuwissen
