Lawmakers adopt revised law on fair market practices

New rule to promote a unified, open, competitive and orderly market system

Chinese lawmakers passed a revised version of the anti-unfair competition law on Friday, as part of the country's broader efforts to drive a fair and orderly market environment.

The revised law, adopted at a session of the Standing Committee of the National People's Congress, China's top legislature, consists of five chapters that include general provisions, acts of unfair competition, investigation of suspected violations, legal liabilities and supplementary provisions. It will come into effect on Oct 15.

According to the law, China will improve the rules and systems to combat unfair competition, strengthen related law enforcement and judicial work, maintain the order of market competition, and promote a unified, open, competitive and orderly market system.

Notably, the law stipulated that platform operators must clearly include fair competition rules within platforms, such as in service agreements and trading policies, and establish mechanisms for reporting, handling and resolving unfair competition disputes.

Operators are also required to take timely and lawful actions when unfair practices are detected. They are obligated to retain relevant records and notify local supervisory authorities.

Shi Hong, an official from NPC Standing Committee's Legislative Affairs Commission, said, "The latest revision of the law came as China further deepens reform. The law holds significant importance for promoting high-quality economic and social development."

Shi emphasized that in recent years, the rapid emergence of new technologies, business formats and models has brought new challenges in market competition, such as cutthroat competition, infringement of data rights and malicious transactions.

"Addressing these prominent problems has made it urgent to revise the law and improve the legal framework for the socialist market economy," he added.

In a further move to refine rules on data-related misconduct, the revised law defines specific types of malicious transactions. These include abuses such as manipulating platform rules to direct false transactions, fake reviews, or unjustified returns, all of which have harmed competitors and disrupted market order.

Moreover, the law targets abuse of dominance by large enterprises, stipulating that companies must not exploit their capital, technology, distribution channels or industry influence to impose unreasonable contract terms on smaller firms.

Prohibited conduct also includes enforcing unfair payment periods or conditions, and delaying payment for goods, construction projects or services-practices that have burdened small and medium-sized businesses.