On February 25, 2016, the legislative affairs office of the State Council issued the revised Draft of the Anti-Unfair Competition Law (“the Draft”), to amend the current Anti-Unfair Competition Law in effect since 1993, for public comments.

The Drafts’ highlights:

  • It redefines “unfair competition activities” to include acts harmful to consumers’ legal rights and interests; “business operators” as natural persons, legal persons and other organizations that engage or participate in commodity production, operations or provision of services; and “commercial marks” to include trademarks, trade names and domain names (main part).
  • It includes under the definition of “unfair transaction activities” using relatively dominant position of all business operators.
  • It redefines “commercial bribery activities” to (i) include a third party involved in the transaction as bribe receiver; (ii) stipulate that “making or promising to make payments of economic interests falls under the scope of offering bribes, while receiving or agreeing to receive economic interests falls under the scope of taking bribes”; (iii) exclude excusing an employee’s personal act, i.e., if a business operator’s employee uses commercial bribes to seek transaction opportunities or competitive advantage for the business operator, it will be considered an act by the business operator.
  • It adds a new article on “acts affecting user selection or disturbing the normal operation of other business operators using network technologies or application services.”
  • It increases penalties for commercial bribery in line with the illegal gains obtained.

The Draft creates a new framework to address commercial bribery. However, several uncertainties still need to be clarified.

Date of issue: February 25, 2016. Deadline for public comments: March 25, 2016.