New regulations introduced, targeting unfair competition on the internet

2024-05-13

Recently, the State Administration for Market Regulation announced the Provisional Regulations on Anti Unfair Competition in the Internet (hereinafter referred to as the "Regulations"), which will come into effect on September 1, 2024. In the view of experts, the promulgation of the Regulations is conducive to preventing and stopping unfair competition on the internet, maintaining a fair market order, encouraging innovation, protecting the legitimate rights and interests of operators and consumers, and assisting in the construction of a unified national market. Currently, China is accelerating the construction of a unified national market, which is a major deployment made by the Party Central Committee and the State Council from a global and strategic perspective. Fair competition is a key element and powerful driving force in accelerating the construction of a unified national market. Anti unfair competition plays a fundamental role in maintaining fair competition and is related to the basic level and quality of the market economy. In recent years, with the rapid development of China's digital economy, information technology innovation iterations, counterfeiting, confusion, false propaganda, commercial slander and other traditional unfair competition behaviors use Internet technology to reinvent. New forms of online unfair competition, such as reverse brushing (giving negative reviews to competitors) and illegal data acquisition, are more covert and hinder the improvement of economic efficiency, the free flow of goods and factors, and the formation of a unified national market. Therefore, it is urgent to strengthen fair competition governance and continuously improve efficient, complete, transparent, and predictable regulatory mechanisms. In addition, the global competitive landscape is accelerating adjustment, a new generation of economic and trade rules is being formed, and institutional competition has become an important part of international competition. Some countries and regions have made a series of new institutional arrangements for the digital economy, and combating unfair competition has become an important focus of international economic and trade rules. Therefore, it is urgent to strengthen forward-looking dynamic research, promote China's competition policy to align with international rules, improve the trade and investment environment, and continue to deepen institutional openness in the field of competition. It can be said that the promulgation of the Regulations is timely. It can provide clear guidance and bottom line for various business entities, ensure the efficient and orderly operation of market competition mechanisms on the track of the rule of law, guide digital technology to better empower, and thus lead China's competitiveness to continuously improve. One of the highlights of the Regulations is that they insist on encouraging innovation and regulating competition at the same time. While protecting the innovative achievements of enterprises and promoting the Internet industry to maximize its innovative potential, they also ensure fair transactions between business entities of different sizes, promote the coordinated development of various enterprises, prevent disordered competition, and strive to create a good market environment. The Regulations adhere to a problem oriented approach, classify and sort out online unfair competition behaviors based on the complex and ever-changing characteristics of online competition, and clarify the identification criteria. It clarifies the new manifestations of traditional unfair competition behaviors such as counterfeiting, confusion, and false advertising in the online environment, regulates hot issues such as brushing orders, speculation, and cashback of positive reviews, and focuses on eliminating regulatory blind spots. In response to new forms of unfair competition in the field of the internet, the Regulations list online unfair competition behaviors such as reverse brushing, malicious interception or blocking, illegal data acquisition, platform operators imposing unreasonable restrictions or adding unreasonable conditions on platform operators, and clarify the applicable legal provisions. For example, Article 12 of the Regulations states that operators shall not use the Internet, big data, algorithms and other technical means to influence users' choice or other parties

Edit:Chenjie    Responsible editor:Liling

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