Amendments to China Anti-Unfair Competition Law 2025

The key amendments to China’s Anti-Unfair Competition Law (AUCL), approved on June 27, 2025, and effective from October 15, 2025, introduce significant updates to address evolving market and digital economy challenges.

Background

Introduced in 1993 amid China’s shift from a centrally planned to a market-driven economy, the Anti-Unfair Competition Law (AUCL) was designed to promote fair competition, curb unfair practices, support economic growth, and safeguard the lawful interests of businesses and consumers in the Chinese market.

Since its introduction, the AUCL has undergone two revisions in 2017 and 2019 respectively. The latest amendments in 2025 reflect this modernization with expanded provisions to address data misuse, platform regulation, and extraterritorial jurisdiction, reflecting China’s ongoing efforts to strengthen market supervision and protect fair competition in a more complex global and digital environment.

Amendments 2025

The amendments to China’s Anti-Unfair Competition Law (AUCL) in 2025 were driven primarily by the need to modernize the legal framework to address evolving market realities and digital economy challenges, ensuring fair competition in a rapidly changing business environment.

Key reasons behind the amendments include:

Addressing new forms of unfair competition in the digital and platform economy: The rise of online platforms, digital marketing, and new media necessitated expansion of prohibitions to cover unfair practices using data, algorithms, platform rules, and online identities such as social media account names, app icons, and search keywords to cause confusion or manipulate competition
Increasing penalties and introducing individual liability: Higher fines for businesses and direct fines on legal representatives or managers aim to enhance accountability and deter violations such as commercial bribery, false advertising, and unfair competition
Extending extraterritorial jurisdiction: Broadening its legal reach, the law now expressly covers unfair conduct occurring beyond China’s borders that undermines domestic market competition or causes harm to Chinese enterprises and consumers. This addresses the globalized nature of business and online commerce.
Broadening its legal reach, the law now expressly covers unfair conduct occurring beyond China’s borders that undermines domestic market competition or causes harm to Chinese enterprises and consumers
Protecting trademarks, trade secrets, and market integrity: Strengthened protections against unauthorized use of trademarks in new contexts and enhanced safeguards for trade secrets align with China’s broader goals of fostering a trustworthy market environment and protecting intellectual property

Overall, the amendments reflect China’s strategic effort to adapt its competition law to the realities of the digital economy, strengthen market supervision, enhance transparency and accountability, and protect both domestic and international business interests in an increasingly complex and interconnected market landscape

Major changes

Prohibition of illegal data acquisition: Business operators are barred from obtaining or using data held by others through fraud, coercion, bypassing, or sabotaging technical measures (Article 13.3).
Crackdown on fake transactions and reviews: Any exploitation of platform regulations—such as initiating or encouraging fraudulent transactions, posting false reviews, orchestrating unwarranted returns, or engaging in other unethical activities—is strictly forbidden, in accordance with Article 13.4.
Ban on platform-forced below-cost sales: Platform operators must not force businesses on their platforms to sell below cost through pricing rules (Article 14).
Regulation of abuse of dominant positions: Large enterprises cannot abuse capital, technology, channel advantages, or industry influence to force SMEs into unreasonable payment or contract terms (Article 15).
Expanded scope of confusing acts: Unauthorized use of third-party social media names, app icons, well-known trademarks as trade names, or setting competitors’ product/enterprise names or trademarks as search keywords is now prohibited (Article 6).
Heightened penalties and personal accountability: The maximum fines for offenses such as commercial bribery, defamation, and unfair online competition have been raised from RMB 3 million to RMB 5 million. Additionally, legal representatives and senior management may now be individually fined up to RMB 1 million for engaging in bribery, as stipulated in Articles 19, 23, and 24
Extraterritorial jurisdiction: Expanding its reach beyond national borders, the law now explicitly addresses unfair practices occurring outside China that negatively impact domestic market competition or cause harm to Chinese companies and consumers (Article 40).

Additional amendments strengthen protections against false advertising (including false reviews), commercial slander, and trade secret infringements, and impose obligations on platform operators for fair rules, complaint mechanisms, and violation reporting.

Extraterritorial jurisdiction

China introduced extraterritorial jurisdiction in its Anti-Unfair Competition Law (AUCL) primarily to regulate unfair competitive practices that occur outside China but disrupt its domestic market or harm Chinese businesses or consumers. This legal provision, introduced in Article 40 reflects China’s intent to extend its regulatory reach to cross-border activities impacting its market integrity.

Key reasons for this extraterritorial provision include:

Addressing the globalized and digital nature of modern commerce, where unfair competition acts abroad can affect the Chinese market and competitive landscape.
Aligning with global enforcement trends, as countries increasingly seek to regulate multinational commercial behaviors with cross-border impacts.
Protecting domestic operators from unfair practices by foreign companies or entities acting outside China but whose conduct adversely affects China’s market competition.
Enhancing China’s ability to safeguard fair competition and market integrity amid evolving international trade and digital economy challenges.
Reflecting lessons from prior legal cases (e.g., a 2021 Supreme People’s Court case) that highlighted the need to address cross-border unfair practices effectively.

By adopting extraterritorial jurisdiction, China aims to compel multinational companies to ensure their competitive behaviors worldwide comply with Chinese law to avoid penalties and protect domestic market.

Summary

These amendments reflect China’s effort to modernize its competition law framework to address digital economy realities, enhance business protections, regulate platform economies, and extend regulatory reach beyond its borders.

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