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China: Judicial Interpretation of Anti-Unfair Competition Law was Released

Authors: Carol Zhu and Yinbing Chen

The Supreme People’s Court released its interpretation on several issues concerning the application of the PRCs Anti-Unfair Competition Law (the “Judicial Interpretation“). The Judicial Interpretation was formulated to improve the rules for competition cases and stimulate a healthy and sustainable development of the economy.  According to the Judicial Interpretation, “business ethics” are defined as a code of conduct that is widely followed and acknowledged in specific commercial fields. To legally determine whether business operators have violated business ethics, the People’s Courts shall review specific circumstances of the cases and comprehensively consider the industrial rules or business practices, the subjective mentality of business operators, transaction counterparties’ willingness to choose, and other factors, such as influence on consumer rights and interests, market competition order, as well as social and public interests. In addition, the Judicial Interpretation also includes detailed provisions on acts of confusion, false or misleading commercial publicity, unfair online competition, etc. The Judicial Interpretation has come into force, officially, as from 20 March 2022.

Key Action Points for Human Resources and In-house Counsel

In recent years, talent has started to be viewed as one of the most essential resources of the company, and the talent war is becoming much fiercer in the labour market. Against this backdrop, traditional employment disputes regarding an employee’s conflict of interests, violations of their confidentiality obligation or breach of non-competition obligations are closely connected to the laws and regulations governing competition. Therefore, it is advisable for employers to pay attention to the newly formulated competition laws and regulations.