The unique Chinese legal approach to online ad blocking: Is it in the right direction?

Abstract

The legal debate around online ad blocking demonstrates a tension between user's freedom and online content providers' revenue-generating business model. This paper aims to analyze ad blocking from a unique perspective of the Chinese law and practice. Since ad blocking does not violate copyright law, copyright law cannot be a guardian to the ad-based business model. China takes a different approach to protect the ad-based business model under unfair competition law and bans ad blocking software directly by regulation. The Chinese courts held that providing ad blocking software is anti-competitive under a vague general principle of the Anti-Unfair Competition Law. The special policy reason behind these decisions is that the Chinese government and courts want to maintain this business model and strengthen intellectual property protection. These decisions are reinforced by the regulatory ban of ad blocking software in China. However, the Chinese approach is in the wrong direction. The Chinese courts have applied a principle of “non-interference unless in the public interest” to ad blocking cases but never analyzed the public interest seriously. This paper argues that the “public interest” in the Internet context should be the interests of Internet users. The group of Internet users is large enough to constitute the general public. The public have a compelling interest of autonomy to justify ad blocking. The right approach to solving the ad blocking problem should be flexible, easily adjustable and it should not totally fail one side. Compared to direct regulatory intervention, a flexible judicial approach is better because it could take into consideration a variety of interests and strike a balance in specific cases. And, to regulate new technologies, a soft version of guidelines could be easily adjustable than an immature regulation. The Internet itself is a creative industry developed under the process of “creative destruction”. Any legal intervention shall be careful and not impede the emerging technologies, market structure development and autonomous competition.