China Passes Revised Anti-Unfair Competition Law, Effective October 15, 2025

On June 27, 2025, China's National People's Congress (NPC) passed the newly revised Anti-Unfair Competition Law, which will come into effect on October 15, 2025.

First introduced in 1993, the Anti-Unfair Competition Law serves as China's foundational legal framework aimed at promoting fair competition, regulating market practices, and ensuring the healthy operation of the market economy. The law underwent two revisions in 2017 and 2019. The current revision, passed during the latest NPC Standing Committee session, marks its third update.

In response to the rapid growth of the internet industry, the new revision addresses emerging challenges and evolving forms of online unfair competition, significantly improving the rules governing fair competition in the digital economy. This update comes at a crucial time to address new issues in the digital landscape.

The revised law, which now consists of 41 articles—up from the original 33—includes provisions on general principles, types of unfair competition behaviors, investigations of suspected violations, legal liabilities, and supplementary provisions. Below are some highlights of the law:

Clearer Requirements for Combating Unfair Competition

The revised law introduces significant improvements, including clearer overall requirements for addressing unfair competition. Notably, it:

◾ Incorporates "prevention" of unfair competition as a primary legislative goal.

◾ Emphasizes that operators must "fairly participate in market competition."

◾ Reinforces the leadership of the Communist Party of China in combating unfair practices.

◾ Refines the roles and responsibilities of coordination mechanisms overseeing unfair competition.

Enhanced Provisions for Confusion-Based Unfair Competition

A major revision targets confusion-related unfair competition, with the law now addressing four specific areas:

◾ Unauthorized Use of New Media Names and Icons: The law now explicitly classifies the unauthorized use of popular new media account names, app names, or icons as unfair competition if it causes confusion.

◾ Misleading Use of Trademarks: The revision ensures alignment with trademark law, clarifying that using another's registered or unregistered famous trademarks in a company name, in a way that causes confusion, is considered unfair competition.

◾ Misuse of Search Keywords: It regulates the use of search keywords, prohibiting the setting of another company's name, product name, or trademark as search keywords if it misleads consumers into thinking the products are from a different business or affiliated with another entity.

◾ Assisting in Confusion: The law now prohibits operators from assisting others in committing confusion-based unfair competition.

Strengthened Provisions for Online Unfair Competition

The revised law further addresses online unfair competition, particularly:

◾ Commercial Bribery: The law introduces provisions preventing individuals and entities from accepting bribes.

◾ False Advertising: It broadens the definition of false advertising, extending it from targeting consumers to also include "other operators." The law also tightens regulations on misleading reviews and prohibits using fake reviews to support false advertising.

◾ Improper Sales Promotions: Operators are prohibited from arbitrarily changing promotional sales terms after the start of a campaign.

◾ Commercial Defamation: The law extends the scope of commercial defamation to include "other operators" beyond just competitors and prohibits directing others to engage in defamation.

Key Updates on Online Unfair Competition

One of the key updates addresses online unfair competition. The law now explicitly bans operators from using data, algorithms, technology, or platform rules to engage in unfair competition. Additionally, it introduces regulations on data rights violations, prohibiting operators from using fraudulent, coercive, or disruptive technical means to acquire or use data held by other operators, thereby disrupting market competition.

Platform operators are also now required to:

◾ Establish fair competition rules in their service agreements.

◾ Set up systems for reporting and resolving unfair competition complaints.

◾ Take immediate action to address any identified unfair competition, including reporting violations to the relevant authorities.

Addressing Unpaid Debts to Small and Medium Enterprises (SMEs)

A notable addition to the revised law is its focus on outstanding business payments. It prohibits large enterprises from exploiting their dominant position to impose unreasonable payment terms or delay payments to SMEs. Government authorities at the provincial or higher levels are tasked with investigating violations.

Enhanced Legal and Regulatory Measures

The revised law introduces several key changes to improve legal accountability:

◾ Civil Compensation: Compensation for unfair competition is now calculated based on the actual loss suffered by the victim or the benefit gained by the infringer.

◾ Personal Liability for Bribery: The law introduces provisions holding company legal representatives, key personnel, and directly responsible individuals accountable for bribery.

◾ Adjusted Penalties: The law increases fines for violations involving trade secrets, commercial defamation, and online unfair competition, while removing the minimum fine for false advertising.

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