New draft aims for fairer competition

A draft amendment to the AntiUnfair Competition Law opened for public opinion on Tuesday, with provisions for fines ranging as high as 5 percent of a firm’s annual revenue to punish unfair competitive practices, it was announced on the website of the State Administration for Market Regulation.

The market regulator said that the draft has detailed provisions on anti-unfair competition rules in the digital economy sector, saying that operators should not use data, algorithms, technology or any related advantages to launch unfair competition.

For instance, operators would be barred from leveraging algorithms to give users different treatment or unreasonable restrictions by analyzing user preferences and consumption habits.

For those who violate the law, a fine ranging from 1 percent to 5 percent of annual revenue will be levied, with responsible executives subject to fines of 100,000 yuan ($14,010) to 1 million yuan.

Zhong Gang, executive director of the Competition Law Research Institute at the East China University of Political Science and Law, said: “The timely amendment aims to regulate and govern behaviors that disrupt fair competition during the development of the new economy, new formats and new business models in the country. It has made more detailed and accurate provisions to some new types of unfair competition behaviors, and will create a more level playing field for small and medium-sized companies.”

Some new types of unfair competition behaviors were added into the law, including acts that may harm the legitimate rights and interests of small and medium-sized market entities.

Market entities with a relatively dominant position should not impose unreasonable conditions on SMEs and other market entities on platforms to make it more difficult for them to establish or operate businesses, the draft added.