On May 11, 2024, the State Administration for Market Regulation issued the Interim Provisions on Anti-Unfair Competition Online (the "Interim Provisions"), which improves and supplements the regulatory system for online unfair competition in mainland China. Previously, most of the acts of unfair competition on the Internet relied on the relevant norms of the Anti-Unfair Competition Law and the E-Commerce Law for supervision, but the ever-changing network environment has brought many types of unfair competition behaviors that were not anticipated by legislators when they legislated, and the "E-commerce Law" promulgated in 18 and the "Anti-Unfair Competition Law" revised in 19 years are obviously difficult to adapt to this rapidly changing environment, which in turn brings certain difficulties to the application of the law. On the basis of the E-Commerce Law, it is foreseeable that the e-commerce law will optimize the online business environment in mainland China to a certain extent. Today's article by Sister Sa's team makes a brief analysis of this provision.
01 New Jurisdictional Provisions
For operators and consumers (users), jurisdiction is the first issue that needs to be paid attention to.
Article 27 of the Interim Provisions stipulates that:
"The "Provisions on Administrative Punishment Procedures for Market Regulation" apply to the jurisdiction of cases of unfair competition online.
Where reports of online acts of unfair competition are relatively concentrated, or cause serious consequences or other negative impacts, the local market regulation department at the districted-city level or above for the actual business operation or the place where the illegal results occurred may have jurisdiction. ”
In this regard, Article 7 of the Provisions on Administrative Punishment Procedures for Market Regulation clearly states that "administrative punishment shall be under the jurisdiction of the market regulation department at or above the county level where the illegal act occurred." Where laws, administrative regulations, or departmental rules provide otherwise, follow those provisions. At the same time, Article 10 of the article states that "the illegal acts of online trading platform operators and online trading operators who sell goods or provide services through self-built websites or other online services shall be under the jurisdiction of the market regulation department at or above the county level in their place of residence." The illegal acts of operators on the platform are under the jurisdiction of the market regulation department at or above the county level in the place where they actually operate. Where the market regulation department at the county level or above for the domicile of an online trading platform operator first discovers leads on violations of the law or receives complaints or reports, it may also exercise jurisdiction. ”
As a result, for platform operators, online trading operators, and in-platform operators involved in acts of online unfair competition, in principle, the relevant cases are under the jurisdiction of the market supervision and administration department at or above the county level in the domicile of the entity involved, which leads to the fact that on the one hand, for users and other business operators, if their legitimate rights and interests are infringed, they must go "thousands of miles" to the location of the enterprise to complain, which is extremely inconvenient, and on the other hand, the regulatory department where the enterprise is located may accumulate too many reports and complaints, which is difficult to handle. Therefore, in order to deal with this situation, the second paragraph of Article 27 of the Interim Provisions clarifies that in the case of "the reporting of online unfair competition acts is relatively concentrated, or causes serious consequences or other adverse effects", it can also be under the jurisdiction of the local market supervision and administration department at or above the districted city level where the actual business operation and the illegal results occur, which greatly facilitates users and other business operators, but it is also foreseeable that for enterprises, this means that it may need to face investigation by the local market supervision and administration authorities. It may have a large impact on the business. In addition, how to define the criterion of "reports of online unfair competition acts are relatively concentrated, or cause serious consequences or other adverse impacts" also needs to be tested in practice.
02 对虚假交易 say no
Article 9 of the Interim Provisions stipulates that:
"Proprietors must not carry out the following conduct to make false or misleading commercial promotions about commodity production and business entities, as well as commodity sales status, transaction information, business data, user evaluations, and so forth, to deceive or mislead consumers or the relevant public:
(1) False transactions or false rankings;
(2) Fabricating data and information related to operations, such as transaction volume, transaction volume, and reservation volume;
(3) Using methods such as false claims of spots, fictitious reservations, or false panic purchases to conduct marketing;
(4) Fabricating user reviews, or using methods such as misleading displays to conceal negative reviews, putting positive reviews in front and negative reviews in the back, or evaluations that do not significantly distinguish between different products, and so forth;
(5) Using methods such as cashbacks, red envelopes, or coupons to induce users to make interactive conduct such as designated praises, likes, or targeted voting;
(6) Fictitious traffic data such as favorites, clicks, followers, likes, reads, subscriptions, and forwards;
(7) Fabricating interactive data such as the number of votes, listens, views, broadcasts, box office, and ratings;
(8) Fictitious education and training effects such as admission rates, examination pass rates, and employment rates;
(9) Using methods such as falsifying word-of-mouth, concocting topics, creating false public opinion hotspots, or fabricating the income of online employees to conduct marketing;
(10) Other false or misleading commercial publicity conduct.
Business operators must not assist other business operators in carrying out false or misleading commercial publicity conduct in the preceding paragraph through methods such as organizing false transactions or organizing false rankings. ”
Compared with the more general provisions in the Anti-Unfair Competition Law and the E-Commerce Law, the Interim Provisions clearly enumerate the acts that deceive or mislead consumers or the relevant public. Although the first two make it clear that business operators shall not conduct false or misleading commercial promotions to deceive or mislead consumers by means of fictitious transactions, fabricated user reviews, etc., they do not specify what kind of conduct falls into this category.
In this regard, the Interim Provisions stipulate nine specific situations, of which various fictitious acts (such as fictitious transactions, fictitious transaction amounts, fictitious collections, etc.) are the focus. We all know that many online trading platforms will try to allow users to make purchases by marking the number of collections and transactions in order to attract users, but these data may be false data created by the platform or operators on the platform through internal transactions, hired transactions, swiping orders, etc., and carry out false commercial promotion, and then deceive and mislead users, and the "Interim Provisions" clarify the illegality of this kind of behavior, and major operators should pay attention to it.
In addition, it should also be noted that "using cashback, red envelopes, card coupons, etc. to induce users to make interactive behaviors such as designated praise, likes, and targeted voting" and "using methods such as falsifying word-of-mouth, concocting topics, creating false public opinion hotspots, and fictitious online employees' incomes for marketing" are all considered to be illegal acts, and both often occur in practice, such as giving vouchers when a merchant expresses a good review when eating out, or hiring a well-known short video blogger to concoct a topic to attract popularity. This does not mean that the two acts cited above must constitute acts of unfair competition on the Internet, in fact, they must achieve the effect of "deceiving or misleading consumers or the relevant public", and in principle, they must also meet the requirements of "disrupting the order of market competition, affecting fair market transactions, and harming the legitimate rights and interests of other business operators or consumers", but according to the Interim Provisions, such acts already have great compliance risks.
03 Illegal acquisition of data is also unfair competition!
Another highlight of the Interim Provisions is the clarification of the illegal acquisition and use of data lawfully held by other operators, which is obviously a new provision in response to the current crawler technology and the large AI model that requires a large amount of data for training. Article 19 states that "business operators shall not use technical means to illegally obtain or use data lawfully held by other business operators, obstruct or undermine the normal operation of network products or services lawfully provided by other business operators, or disrupt the order of fair market competition." The legal liability of this article is punished in accordance with Article 24 of the Anti-Unfair Competition Law. Article 24 of the Anti-Unfair Competition Law actually targets that "business operators shall not use technical means to impede or undermine the normal operation of network products or services lawfully provided by other business operators by influencing user choices or other means", specifically including: "(1) inserting links or forcing target jumps into network products or services lawfully provided by other business operators without their consent; (2) Misleading, deceiving, or coercing users to modify, close, or uninstall network products or services lawfully provided by other business operators; (3) Maliciously carrying out incompatibility with network products or services lawfully provided by other business operators; (4) Other conduct that obstructs or undermines the normal operation of network products or services lawfully provided by other business operators. ”
Therefore, it can be considered that the Interim Provisions determine that "the use of technical means to illegally obtain or use data lawfully held by other business operators, and obstruct or undermine the normal operation of network products or services lawfully provided by other business operators" is "other acts that obstruct or undermine the normal operation of network products or services lawfully provided by other business operators".
However, there are also some problems in the application of this article, one is that there is still a lack of relatively clear standards for how to determine the "illegality" in "illegal acquisition and use". Second, although Article 26 of the Interim Provisions provides a standard for determining "obstructing or undermining the normal operation of network products or services lawfully provided by other business operators", it may be difficult to judge in practice when this provision is applied in such a situation, for example, whether the crawler's crawling behavior occurs once a month can be determined to be frequent and long-lasting, and whether the decrease in the number of visits to the website of the enterprise crawled by the crawler can be attributed to the crawler's behavior, the above points need to be judged more clearly in practice. in order to apply the provisions of Article 19 of the Interim Provisions more appropriately.
04 Write at the end
The Interim Provisions will not be officially implemented until September 2024, which can be said to give online platform operators and operators on the platform relatively sufficient time to improve and improve according to the requirements of the new regulations.
Source: Xiao Sa Lawyer
编辑：Sharon