China Amends Anti-Unfair Competition Law: Digital Economy & Long-Arm Jurisdiction

The newly amended Anti-Unfair Competition Law of the PRC was adopted by the Standing Committee of the National People’s Congress on 27 June 2025 and will take effect on 15 October 2025.

This revision addresses gaps in traditional legal frameworks that struggled to govern complex digital economy scenarios. With commercial activities rapidly shifting online, new forms of unfair competition have emerged, including data scraping, review manipulation ("brushing and fake reviews"), platform-forced underpricing, and large enterprises’ payment defaults. The amended law establishes targeted preventive mechanisms, prohibits unfair competition leveraging data, algorithms, technology or platform rules, and refines fair competition standards for digital markets. It also expands types of confusing acts and aligns with the Trade Mark Law’s provisions on conflicts between trade marks and trade names.

Key amendments

1. Prohibition of Illegal Data Acquisition
   Business operators shall not obtain or use data lawfully held by others through fraud, coercion, bypassing or destroying technical management measures, or other improper means (Article 13.3)
2. Crackdown on Fake Transactions, Fake Reviews & Malicious Returns
   Business operators shall not abuse platform rules to directly engage in or instruct others to conduct fake transactions, fake reviews, malicious returns, or other acts against other business operators. (Article 13.4)
3. Ban on Platform-Forced Below-Cost Sales
   Platform operators shall not compel or covertly compel in-platform business operators to sell goods below cost pursuant to their pricing rules. (Article 14)
4. Regulation of Advantageous Position Abuse
   Large enterprises and other business operators shall not abuse advantageous positions in capital, technology, transaction channels, or industry influence to force SMEs into accepting manifestly unreasonable payment terms, methods, conditions or liability for breach, or default on payments for goods, projects, or services. (Article 15)
5. Expanded Scope of Confusing Acts
   Prohibits: Unauthorised use of third parties’ influential social media account names, application names/icons; Unauthorised registration of others’ registered/unregistered well-known trade marks as trade names; Setting others’ product names, enterprise names (including abbreviations/trade names), registered trade marks, or unregistered well-known trade marks as search keywords.(Article 6)
6. Increased Fines & Personal Liability
   Maximum fines for commercial bribery, commercial defamation, and online unfair competition raised from RMB 3 million to RMB 5 million (Articles 19, 23, 24). Legal representatives, principal managers, and directly liable persons may face individual fines up to RMB 1 million for commercial bribery (Article 19).
7. Explicit Extraterritorial Jurisdiction
   Unfair competition acts committed outside China that disrupt domestic market competition order or harm lawful rights of Chinese business operators/consumers shall be governed by this Law. (Article 40)

In summary, the amended law significantly strengthens oversight of platform economies, details malicious transaction patterns, enhances penalties, and extends jurisdiction to overseas conduct. It will more effectively address online infringements and guide fair competition in the digital era. Practical implications of the extraterritorial jurisdiction clause and whether it will lead to legal conflicts remain to be seen.