Revised draft tightens regulation of internet unfair competition

As a fundamental piece of legislation regulating market competition in China, the Anti-Unfair Competition Law has played a significant role in maintaining fair market competition since its promulgation in 1993. In recent years, new types of unfair competition that are unique to the internet have continued to emerge one after another, such as hijacking internet traffic, content tampering, misleading comparisons and improper blocking of advertisements. However, currently effective PRC legislation (including the Anti-Unfair Competition Law) has no specific restrictions and regulations in this regard.

In judicial practice, only general principles are available for internet-related unfair competition. Therefore, clear definitions and restrictions on internet-related unfair competition at the legislative level are urgently needed.

In this context, the Anti-Unfair Competition Law (Revised Draft submitted for review), published by the Legislative Affairs Office of the State Council on 25 February 2016, includes specific provisions on internet operations, and strives to regulate unfair competition in the internet sector in the ways set out below.

Defines the scope of commercial marks. The revised draft expressly stipulates that the main body of internet domain names, website names and webpages fall within the scope of commercial marks, and that operators may not misappropriate the same (e.g., by using a similar domain name as a competitor to divert traffic to another website) to mislead the public and cause confusion in the market. This provision explicitly strengthens the legal protection of commercial marks.

Leo Wang and Ben Chai are associates at DaHui Lawyers