China releases new regulation to tackle unfair competition in internet industry

China's State Administration for Market Regulation (SAMR) on Saturday issued a temporary anti-unfair competition regulation for the internet industry, which clarifies various forms of unfair competition behaviors and provides regulatory basis to protect the rights of operators and consumers and to promote the sound development in the digital economy.

The regulation was issued to prevent and stop unfair competition in the internet industry, safeguard the market order with fair competition, encourage innovation, protect the legitimate rights and interests of operators and consumers, and promote sound and persistent development in the digital economy, said the SAMR. 

The new regulation came amid the country's master development plan of forming a unified national market and continuously improving the business environment, the top market regulator said.

Also, in line with the country's intensifying efforts to improve the business environment, an executive meeting of the State Council, China's cabinet, on Saturday also reviewed and adopted a draft regulation for fair market competition. 

The new regulation for the internet industry includes five chapters and 43 detailed rules, covering the definition of unfair competition in the internet industry, regulatory enforcement and legal liabilities clarification. It will enter force on September 1, 2024, according to the regulator.

The regulation clarifies various forms of common unfair competition behaviors such as fake information, false advertising and others to eliminate regulatory blind spots. Other forms of unfair competition in the internet industry were also listed, including traffic hijacking, malicious interference, and malicious incompatibility. 

New types of unfair competition behaviors by technical means such as reverse click farming, illegal data collection and discriminatory treatment will be also regulated. Meanwhile, the new regulation provides a regulatory basis to address potential new unfair competition issues, the market regulator said. 

Moreover, the regulation calls on platform enterprises to take more responsibility in regulating unfair competition behavior and take concrete steps for compliance. Internet operators that violate the regulation will be severely punished, according to the SAMR.