Law curtails unfair app competition

Legal professionals say constant updating required to stay current

Legal professionals have welcomed a revision to the law that aims to tackle the growing number of lawsuits related to smartphone apps.

The demand for smart mobile devices has soared in China in the past five years, creating a highly lucrative app market. Yet the rush to profit has resulted in rogue business tactics, such as copying wellknown brands or creating apps that block users from downloading rival software.

A report last year from the Supreme People’s Court showed that courts nationwide filed 2,181 lawsuits over unfair competition in 2015, up by about 54 percent year-on-year. Those related to the internet increased sharply, it said.

To deal with that, a new clause in the Law Against Unfair Competition, which for the first time regulates the behavior of technology companies involved in the app market, was approved by national legislators this month.

The revised law, which takes effect in January, “specifically responds to unfair competition online, which receives the most complaints from the public, and will help judges deal with the rise in such disputes more accurately”, said Yang Dejia, chief judge of the intellectual property tribunal of Haidian District People’s Court in Beijing.

Disputes over unfair practices “not only harm the interests of app makers but also disrupt general market order”, he said at a forum over the weekend.

The new clause sets out several forms of misconduct, including copying another’s brand, and states that unfair behavior should be punished by banning the offender from the market.

In 2015, the Chaoyang District People’s Court in Beijing ordered a technology company to pay 200,000 yuan ($30,190) to a media company because an app designed by

The new clause needs to be continuously observed in practice and improved, because it may get out of date easily in light of rapid developments in cyberspace.” Yang Huaquan, law professor at Beijing Institute of Technology

the defendant had the same name that the plaintiff had used in its WeChat public account.

“The app market is the harder-hit section and breeds unfair competition, because mobile devices have become a major way to surf the internet,” Yang said.

Yang Huaquan, a law professor at Beijing Institute of Technology, also welcomed the revision. The unfair competition law was first introduced in 1993.

“However, the new clause needs to be continuously observed in practice and improved because it may get out of date easily in light of rapid developments in cyberspace,” he said.

Diao Yunyun, an employee responsible for legal affairs at Tencent, one of China’s largest technology enterprises, said: “The clause is too specific to cover all unfair competition online.”

For example, she said, theft of app data is not mentioned in the law, though it happens frequently in the market.

She said she is looking forward to seeing the clause further interpreted in future legal documents to correct other unfairly competitive behavior online. “After all, we don’t want it to be rendered ineffective in a short time,” she said.