More legal control over unfair competition on the internet

The intense competition on the internet in China has led to frequent occurrences of unfair competition. In the past few years, China’s internet giants such as Baidu, Tencent, Sohu and Qihoo 360 have actively or passively been caught up in the swirl of unfair competition suits. Notwithstanding the fact that the dust in the most famous of these, the “3Q” battle, has settled, its impact on the development of the internet in China cannot be ignored.

The current Anti-Unfair Competition Law formulated 24 years ago, subject to the legislative background at the time, does not contain any specific provisions addressing unfair competition on the internet. At present, where the specific provisions of the law cannot be directly applied, courts will generally apply the provisions of principle, i.e., “good faith” and “commonly accepted commercial ethics” of article 2 of the law to rein it in. This method of proceeding has effectively resolved the dilemma of having no law to rely on in adjudicating unfair competition in the internet sector, but the lack of consistency in the determination criteria from case to case and the risk of abuse of discretion by judges have been decried by persons in the industry. Accordingly, it can be said that the addition of provisions addressing unfair competition on the internet in current revisions to the law has commanded the support of the public.

CATEGORIZATION PROVISION

Article 14 of the Draft for Amending the Anti-Unfair Competition Law, submitted to the Standing Committee of the National People’s Congress for first reading on 22 February 2017, expressly sets forth four types of acts of unfair competition in the internet sector: (1) inserting, without consent, links in the online products or services lawfully provided by other business operators, forcing a jump in target; (2) misleading, deceiving or compelling users to modify, close or uninstall the online product or service lawfully provided by another; (3) interfering with or disrupting the normal operation of the online product or service lawfully provided by another; and (4) maliciously causing incompatibility with the online products or services provided by other business operators.

Sun Jinlin is a partner of Jincheng Tongda & Neal