May 2022
Jolene Chen and Teresa Huang
On January 29, 2022, the Judicial Committee of the Supreme People’s Court adopted the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Anti-unfair Competition Law of the People’s Republic of China (hereinafter, the “Judicial Interpretation”), which came into effect on March 20, 2022.
For starters, the Judicial Interpretation clarifies the nature of the miscellaneous provisions of Article 2 of the Anti-unfair Competition Law. If an operator disrupts the order of market competition to the extent of undermining the legitimate rights and interests of other operators or consumers, and is besides in violation of Chapter II of the Anti-unfair Competition Law as well as the Patent Law, the Trademark Law, the Copyright Law and other requirements, the people’s court may make a determination by applying Article 2 of the Anti-unfair Competition Law.
Secondly, the Judicial Interpretation clarifies the standard for determining if an act of market competition violates business ethics, i.e., the code of conduct generally followed and recognized in a specific business field, under Article 2 of the Anti-unfair Competition Law. The people’s court should take into account the specific circumstances of the cases, and generally consider the rules of the industry or commercial practice, the subjective state of the operators, the choice willingness of the trading counterparties, the impact on the rights and interests of consumers, the order of market competition, social and public interests, and other factors to determine in accordance with law whether the operators have violated business ethics.
Thirdly, the Judicial Interpretation further explains and refines the improper conduct that should not be engaged by operators that use the Internet to engage in production and business activities. For example, a target jump that directly takes place without the consent of other operators and users should be regarded by the people’s court as a “mandatory target jump.” If only a link is inserted and the target jump is triggered by the user, the people’s court should consider the specific manner of link insertion, the existence of reasonable grounds, the impact on the interests of the users and other operators, and other factors to determine if such conduct is an act of improper competition through “link insertion to force a target jump.” For example, if the operator maliciously interferes in or damages the network products or services lawfully provided by other operators by misleading means, deception, compelling the user to make changes, closures, or uninstallation, or other means without a clear indication in advance and with the consent of the user, the people’s court should determine that the act is “misleading, deceiving, or forcing the user to modify, close, or uninstall the network products or services legally provided by other operators.”
Fourthly, the Judicial Interpretation also clarifies the transition of the old and new legal norms. The Anti-unfair Competition Law as amended applies to the civil unfair competition cases heard by the people’s court after it goes into effect, the conduct that took place before the effective date of the decision is governed by the Anti-unfair Competition Law before amendment, and the conduct that occurred before the effective date of the decision but continues after the effective date of the decision is governed by the Anti-unfair Competition Law as amended.