China Fortifies Market Integrity with Sweeping Amendments to Anti-Unfair Competition Law: A New Era for IP Protection and Platform Accountability

In one of the most significant legislative developments in China’s commercial law landscape this year, the Standing Committee of the National People’s Congress has enacted a comprehensive amendment to the Anti-Unfair Competition Law (AUCL), marking a watershed moment in the country’s ongoing efforts to modernize its market regulatory framework. Set to take effect on October 15, 2025, this revision introduces substantial changes that strengthen intellectual property protections, clarify platform responsibilities, enhance data safeguards, and explicitly extend the law’s jurisdiction to extraterritorial conduct affecting the Chinese market.

The amended AUCL represents far more than a routine legislative update. It is a strategic recalibration of China’s approach to market regulation in the digital age, addressing the profound transformations wrought by e-commerce, big data, artificial intelligence, and the platformization of economic activity. By codifying judicial practices, incorporating administrative regulations, and introducing novel provisions tailored to the realities of the 21st-century marketplace, the law positions China at the forefront of efforts to govern digital commerce while maintaining robust protections for fair competition and innovation.

This legislative overhaul comes at a critical juncture. China’s digital economy has grown exponentially over the past decade, with e-commerce transactions exceeding RMB 40 trillion annually and the country boasting the world’s largest population of internet users. This explosive growth has brought unprecedented opportunities but also novel challenges: sophisticated forms of digital infringement, platform monopolies, data misappropriation, and cross-border unfair competition that existing legal frameworks struggled to address adequately. The amended AUCL is Beijing’s comprehensive response to these challenges.

The Evolution of China’s Anti-Unfair Competition Framework

To appreciate the significance of the 2025 amendments, it is essential to understand the evolution of China’s anti-unfair competition regime. The original AUCL was enacted in 1993, during the early stages of China’s transition to a market economy. That law was groundbreaking for its time, establishing fundamental principles of fair competition and prohibiting practices such as commercial bribery, false advertising, and the misappropriation of trade secrets.

However, the 1993 law was conceived in an era before the internet revolution. As China’s economy digitalized, courts and regulators found themselves stretching the law’s provisions to cover new forms of misconduct. The 2017 amendment to the AUCL made important strides, particularly in addressing online unfair competition, but it was the subsequent issuance of the “Interim Provisions on Prohibiting Unfair Competition on the Internet” in 2024 that laid much of the groundwork for the current comprehensive revision.

The 2025 amendment represents the culmination of this evolutionary process. It takes the lessons learned from years of judicial practice, the insights gained from administrative enforcement, and the principles established in the 2024 Interim Provisions, and elevates them to the level of national legislation. The result is a law that is both more comprehensive and more granular, providing clearer guidance for businesses while equipping regulators with more powerful tools.

Expanded Protection Against Confusion: Addressing the Digital Identity Crisis

One of the most transformative aspects of the amended AUCL is the dramatic expansion of protections against confusion-causing acts. Article 6 of the original law prohibited the unauthorized use of another’s well-known product names, packaging, and trade dress. While this was adequate for physical goods, it left significant gaps in the digital realm.

The revised Article 7 now explicitly extends protection to a comprehensive array of digital identifiers, including:

• Web domain names and online platform names
• New media account names (such as WeChat official accounts, Weibo handles, and Douyin profiles)
• Mobile application names and icons
• Mini-program identifiers
• Online game interfaces and character designs

This expansion is not merely a list of new protected categories; it represents a fundamental recognition that in the digital economy, brand identity is increasingly expressed through these online touchpoints rather than traditional physical markers. A company’s WeChat official account or its app icon may be far more valuable and recognizable to consumers than its physical storefront or product packaging.

The law establishes a clear standard: if a rights holder can demonstrate that their digital identifier has achieved “a certain degree of influence” in China, it will receive protection against unauthorized use that is likely to cause confusion. This standard, borrowed from trademark law’s concept of acquired distinctiveness, provides a flexible yet principled framework that can accommodate the rapid pace of digital innovation.

The Keyword Controversy: Bringing Clarity to Search Engine Marketing

Perhaps no issue has generated more litigation and uncertainty in recent years than the use of competitors’ trademarks as search engine keywords. The practice, known as keyword bidding or search engine marketing (SEM), has been a legal grey area, with courts issuing conflicting decisions on whether such use constitutes unfair competition.

The amended AUCL brings much-needed clarity. Article 7 now explicitly prohibits the unauthorized use of another’s influential trade name, company name, or trademark as a search keyword if such use is likely to cause confusion. Critically, the law applies a unified standard to both visible use (where the keyword appears in the search results or ad copy) and hidden use (where the keyword triggers an ad but does not appear in the visible content).

This represents a significant shift from previous judicial practice, which often treated these two scenarios differently. By focusing on the likelihood of confusion rather than the visibility of the keyword, the law adopts a more consumer-centric approach. The question is not whether the competitor’s mark is displayed, but whether the average consumer, searching for one brand, is likely to be misled into clicking on a competitor’s advertisement.

For businesses engaged in digital marketing, this provision demands a careful reassessment of SEM strategies. The use of competitor keywords, once a common and aggressive marketing tactic, now carries substantial legal risk. Companies must ensure that even if they bid on competitor terms, their advertisements clearly distinguish their own brand and do not create a false impression of affiliation or endorsement.

Protecting Unregistered Trade Dress in the Digital Age

The amended law also strengthens protection for unregistered trade dress—the overall look and feel of a product or service that has acquired secondary meaning. In the physical world, this might include the distinctive design of a restaurant interior or the unique shape of a product. In the digital realm, it extends to website layouts, app user interfaces, and the visual design of online services.

This is particularly important in China’s fast-paced digital market, where “copycats” can quickly replicate the look and feel of a successful online service. While trademark and copyright law provide some protection, they often fall short when dealing with the holistic user experience. The AUCL’s trade dress protection fills this gap, allowing companies to protect their distinctive digital presence even if individual elements are not separately protectable.

Platform Responsibility: From Passive Intermediary to Active Gatekeeper

The relationship between e-commerce platforms and the unfair competition that occurs on their sites has long been contentious. While the E-commerce Law established a framework for platform liability in cases of IP infringement, it left significant ambiguity regarding platforms’ obligations to address unfair competition more broadly.

The amended AUCL seeks to transform platforms from passive intermediaries into active gatekeepers of fair competition. Article 8 now requires platforms to:

1. Establish and publicize fair competition rules governing the conduct of sellers and service providers on their platforms.
2. Create dedicated complaint mechanisms specifically for unfair competition acts, separate from general IP infringement channels.
3. Take timely action when unfair competition is reported, which may include removing listings, suspending accounts, or terminating services.
4. Report serious violations to market supervision authorities.

These requirements represent a significant expansion of platform obligations. Previously, platforms could often claim ignorance of unfair competition occurring on their sites, arguing that they were merely providing a neutral marketplace. The new law makes clear that platforms have an affirmative duty to police their ecosystems.

The Practical Challenges of Implementation

However, the law’s practical impact will depend heavily on how platforms interpret and implement these requirements. Unlike trademark or copyright infringement, which can often be identified through automated systems, unfair competition—particularly confusion-causing acts involving unregistered rights—requires more nuanced, context-dependent analysis.

Will platforms develop sophisticated AI systems to detect potential confusion? Will they employ teams of specialists to review complaints? Or will they, as many observers expect, continue to require complainants to provide administrative decisions or court judgments before taking action in all but the most clear-cut cases?

The law provides some guidance by requiring platforms to establish “fair competition rules,” which must presumably be detailed enough to give sellers clear notice of prohibited conduct. These platform-specific rules will likely become a critical battleground, as rights holders push for expansive definitions of unfair competition and sellers argue for narrow, predictable standards.

Notably, while the law imposes these new obligations on platforms, it does not specify administrative penalties for non-compliance. Platforms that fail to act on unfair competition complaints may face civil liability under Article 45 of the E-commerce Law, which holds platforms liable for losses resulting from their failure to take necessary measures. However, the absence of direct administrative penalties may limit the law’s deterrent effect.

Data Protection: Beyond Trade Secrets

In recognition of data’s central role in the modern economy, the amended AUCL introduces groundbreaking provisions to protect against the improper acquisition and use of data. Article 10 prohibits obtaining data lawfully held by others through:

• Fraud or coercion
• Circumventing or breaching technical protection measures
• Other improper means

This protection is notably broader than the law’s trade secret provisions. To qualify as a trade secret under Article 9, information must be: (1) not publicly known, (2) have commercial value, and (3) be subject to reasonable confidentiality measures. Data protected under Article 10, by contrast, need not be secret or even confidential. It need only be “lawfully held” by another party.

This distinction is critical. In the age of big data, much valuable information is not secret in the traditional sense. Customer transaction data, user behavior patterns, and aggregated analytics may be widely known to exist, but the specific datasets held by individual companies represent significant competitive assets. By protecting this data from improper acquisition, the law provides a legal foundation for data-driven businesses to safeguard their competitive advantages.

The Scope and Limits of Data Protection

The law’s data protection provisions raise important questions about scope and application. What constitutes “improper means” of data acquisition? Does web scraping violate this provision? What about the use of APIs in ways not explicitly authorized by the data holder?

The law provides some guidance by specifically mentioning the circumvention of technical protection measures, suggesting that violating access controls is clearly prohibited. However, the catch-all phrase “other improper means” leaves considerable room for interpretation. Courts will need to develop standards that balance the legitimate interests of data holders against the need for data portability, interoperability, and competition.

It is also worth noting what the law does not do: it does not establish data ownership rights. The provision protects against improper acquisition, but it does not grant data holders absolute control over “their” data. This reflects the ongoing global debate about data rights, with China, like most jurisdictions, stopping short of recognizing data as property in the traditional sense.

Extraterritorial Reach: China Asserts Global Jurisdiction

Perhaps the most geopolitically significant aspect of the amended AUCL is the formal codification of its extraterritorial application. Article 40 states unequivocally that the law applies to unfair competition acts conducted outside of China if those acts:

• Disrupt the order of market competition within China, or
• Harm the legitimate rights and interests of Chinese business operators or consumers

This provision, while building on principles already established in judicial interpretations, represents a bold assertion of regulatory jurisdiction. It aligns the AUCL with the extraterritorial reach already claimed by China’s Anti-Monopoly Law and signals Beijing’s determination to protect its market from foreign unfair competition.

Implications for International Business

For multinational corporations, this extraterritorial clause introduces a new dimension of compliance risk. Consider the following scenarios:

• A company headquartered in Europe runs a digital marketing campaign that uses a Chinese competitor’s trademark as a keyword in Google Ads. Even though the campaign targets European consumers, if it is accessible to Chinese users or affects the Chinese market, it could potentially violate the AUCL.
• A U.S. software company implements a feature that scrapes data from a Chinese competitor’s platform. Even if the scraping occurs on servers located outside China, if it targets data related to the Chinese market, it may fall under the AUCL’s jurisdiction.
• A Southeast Asian e-commerce platform hosts sellers who offer counterfeit goods that imitate Chinese brands. If those goods are marketed to or reach Chinese consumers, the platform could face liability under the AUCL.

The practical enforcement of these extraterritorial provisions will depend on several factors, including China’s ability to assert jurisdiction over foreign defendants, the willingness of foreign courts to recognize Chinese judgments, and the availability of assets within China for enforcement. Nonetheless, the mere assertion of jurisdiction creates compliance obligations and litigation risks that international businesses cannot ignore.

Balancing Sovereignty and Comity

The extraterritorial application of the AUCL also raises important questions of international law and comity. While China is not alone in asserting extraterritorial jurisdiction—the U.S., EU, and other jurisdictions have done so in antitrust, securities, and other areas—the expansion of such claims increases the risk of jurisdictional conflicts and regulatory fragmentation.

For businesses operating globally, this trend towards extraterritorial regulation creates a complex compliance landscape. Conduct that is lawful in one jurisdiction may violate the laws of another, and companies may find themselves subject to conflicting legal obligations. This underscores the need for international dialogue and, ideally, harmonization of competition law principles.

Enhanced Penalties: Raising the Stakes

To ensure that the law’s expanded protections have real teeth, the amended AUCL significantly increases the penalties for violations. For serious violations of trade secret provisions, the minimum fine has been raised from RMB 500,000 to RMB 1 million. For online unfair competition acts such as fabricating transactions, posting false reviews, or engaging in malicious refund behavior, the maximum fine increases from RMB 500,000 to RMB 1 million, with penalties for severe violations rising from RMB 500,000-3 million to RMB 1-5 million.

These enhanced penalties reflect a broader trend in Chinese regulatory enforcement towards more punitive sanctions. The message is clear: unfair competition will be costly. For businesses, this means that compliance is not merely a legal obligation but an economic imperative. The potential fines, combined with the reputational damage of a public enforcement action, make the cost of non-compliance potentially catastrophic.

Practical Implications and Strategic Recommendations

The amended Anti-Unfair Competition Law presents both opportunities and challenges for businesses operating in or with China. Here are key strategic considerations:

For Brand Owners and IP Holders:

1. Audit Your Digital Assets: Conduct a comprehensive review of your digital brand presence, including domain names, social media accounts, app names, and online interfaces. Assess which have acquired sufficient influence to merit protection under the new law.
2. Document Your Rights: Gather evidence of the use and recognition of your digital identifiers. This may include user statistics, media coverage, marketing expenditures, and consumer surveys demonstrating brand awareness.
3. Develop Enforcement Strategies: With the law’s expanded scope, you now have more tools to combat digital infringement. Work with counsel to develop proactive monitoring and enforcement strategies, including administrative complaints and civil litigation.
4. Engage with Platforms: Leverage the new platform obligations to address unfair competition. Familiarize yourself with each major platform’s fair competition rules and complaint procedures.

For E-commerce Platforms:

1. Update Terms of Service: Revise your platform rules to explicitly prohibit the forms of unfair competition identified in the amended law. Ensure these rules are prominently displayed and acknowledged by users.
2. Establish Complaint Mechanisms: Create clear, accessible channels for reporting unfair competition, separate from general IP infringement procedures. Train staff to handle these complaints effectively.
3. Invest in Technology: Consider developing or acquiring AI-powered tools to detect potential unfair competition, such as systems that identify suspicious seller behavior or flag potential confusion-causing listings.
4. Balance Competing Interests: Develop fair procedures that protect rights holders while also providing due process for accused sellers. Avoid over-enforcement that could stifle legitimate competition.

For International Companies:

1. Conduct Extraterritorial Risk Assessments: Review your global business practices to identify activities that, while conducted outside China, could affect the Chinese market and potentially violate the AUCL.
2. Localize Compliance: Ensure that your China operations have robust compliance programs tailored to the specific requirements of the amended law. This may require dedicated legal resources with expertise in Chinese competition law.
3. Monitor Developments: Stay informed about implementing regulations, judicial interpretations, and enforcement trends. The practical application of the new provisions will evolve through administrative and judicial practice.
4. Consider Dispute Resolution Clauses: In contracts with Chinese parties, carefully consider choice of law and forum selection clauses, keeping in mind the AUCL’s extraterritorial reach.

Conclusion: A New Chapter in China’s Market Regulation

The amended Anti-Unfair Competition Law represents a new chapter in China’s ongoing effort to build a legal framework that supports a fair, competitive, and innovative market economy. By expanding protections to cover digital assets, imposing greater responsibilities on platforms, safeguarding data, and asserting extraterritorial jurisdiction, the law demonstrates a sophisticated understanding of modern market dynamics and a firm commitment to protecting competition and intellectual property.

For businesses, the law presents both challenges and opportunities. Those that proactively adapt to the new regulatory landscape, invest in compliance, and leverage the law’s expanded protections will be best positioned for success in China’s evolving digital economy. As implementing regulations and judicial interpretations emerge in the coming months, continued vigilance and strategic adaptation will be essential.