New rule to tackle unfair competition in internet sphere

China's State Administration for Market Regulation (SAMR) on Saturday issued an interim regulation against unfair competition in the cyberspace, which provides a legal basis to protect the rights of business operators and vast Chinese consumers.

The move showed that the regulation and development of the internet and e-commerce industries are being ramped up, following a big jump in the number of market players online, analysts noted.

The regulation was issued to prevent and stop unfair competition in the internet industry, maintain market order, encourage innovation, protect the legitimate rights and interests of market operators and consumers, and promote the sound and persistent development of the digital economy, the market regulator noted.

The new regulation came amid China's ramped-up efforts to form a unified national market and continuously improving the business environment, the regulator said.

On Saturday, an executive meeting of the State Council reviewed and adopted a draft regulation to promote fair market competition in China.

Liu Dingding, an internet industry analyst, told the Global Times on Sunday that China's law-based internet governance system has been basically formed now, which will benefit online business operation and provide a positive consumption environment for the economy's recovery. 

The new regulation has five chapters and 43 detailed stipulations, covering the definition of unfair competition in the internet sphere, such as fake information and false advertising, and clarifying regulatory enforcement and legal liabilities. It will take effect on September 1.

New types of unfair competition by technical means such as illegal data collection and discriminatory treatment will be also regulated. The new regulation provides a basis to address potential new unfair competition issues in the future, the market regulator said.

The new regulation also urges internet platform-based giant companies to assume more responsibility in regulating unfair competition and take concrete steps for compliance. Internet operators that violate this regulation will be severely penalized, according to the SAMR. 

Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, told the Global Times on Sunday that the regulation announced by the SAMR will help improve the country's digital business governance by cracking down on all illicit behaviors and protecting intellectual property in the internet sphere, and the regulator will play an important role in securing the legal rights of both companies and consumers.