China’s regulations on new types of unfair competition in the digital age: ‘Internet Provision’ and ‘Data Provision’

Abstract

Abstract This article delves into the emergence of ‘new types of unfair competition’ in China, propelled by the rapid development of the digital economy. It primarily focuses on ‘Internet Provision’ and the proposed ‘Data Provision’. Notably, China’s Anti-Unfair Competition Law, enacted in 1993, underwent its first significant revision after a span of 24 years, leading to the introduction of the ‘Internet Provision’. However, the typology of these provisions presented evident flaws, resulting in the frequent invocation of the ‘catch-all clause’ by the courts since its implementation. This lack of specific categorization for unfair competition in the Internet domain has led to the courts heavily relying on Article 2 of the ‘Anti-Unfair Competition Law’, which is regarded as a general provision. Unfortunately, this approach has given rise to convoluted reasoning, unstable outcomes and excessive judicial intervention in commercial competition matters. To address these issues, the newly proposed ‘data clause’ aims to reestablish clear typification. Nevertheless, it contains semantic ambiguities in its specific expression. More importantly, while the proposed rules consider the cost of public access to information, they do not sufficiently safeguard freedom of information. The lack of well-defined boundaries for data scraping tends to overly favour the original platforms that control the data. Confronting this novel form of unfair competition, it is crucial for codified law countries to endeavour to typify unfair competition acts. However, in designing the legal system, due consideration should be given to the principle of ‘competitive neutrality’ meaning that excessive judicial coercion and interference in the Internet competition landscape should be avoided to ensure a level playing field. The law’s role is to establish clear parameters while allowing for technical solutions to address many of the arising problems. Therefore, it is essential to define a precise and consistent standard. This paper argues against an overly broad recognition of ‘new unfair competition behaviour’, as it may hinder market entry and stifle innovation in the long run.