China’s revised AUCL takes effect: Advancing IP protection and fair competition in the digital economy

Key IP highlights of China’s AUCL amendment

1. Expanded protection for New Digital Identifiers (Article 7)

The amendment broadens the scope of protectable distinctive signs on the internet. In addition to the main part of the domain name, name of website as well as webpage, the law now also explicitly protects:

• Online usernames,
• New media account names (including account names on social media); and
• Application names and icons.

The AUCL now specifies that the use of any of these identifiers constitutes a forbidden act of confusion if they already possess “a certain influence” and such use confuses consumers about the origin of the goods or the goods’ connection with another person. For IP owners, this means that digital branding elements—once considered peripheral—can be treated as core assets within trademark and brand protection strategies.

2. Codification of legal practice concerning acts of confusion (Article 7)

In addition to expanding protection to the new digital identifiers, the amendment now also explicitly regulates the below acts of confusion:

• Misuse of Trademarks as Company Names:

The unauthorized use of another party’s registered trademark or unregistered well-known trademark as a company name is now clearly prohibited under the AUCL. This aligns the AUCL with Article 58 of the Trademark Law.

• Keyword Manipulation:

The use of another party’s distinctive sign—such as a product name, enterprise name, registered trademark or unregistered well-known trademark—as a search keyword (e.g. on e-commerce platforms or search engines) becomes actionable if it leads consumers to mistakenly believe there is a connection with the trademark owner.

3. Liability for infringement (Articles 7 and 23)

The revised AUCL also addressed the liabilities of infringement in the scenarios of aiding infringement and selling infringing goods.

First, it introduces a standalone paragraph in Article 7 prohibiting to aid others in committing acts of market confusion, which aligns with Article 57(6) of the Trademark Law. This includes notably providing logistical, technical, or operational support—such as warehousing, transportation, mailing, printing, concealment, or digital infrastructure—that facilitates unfair competition.

Furthermore, in Article 23 regarding the administrative liabilities for violating Article 7, the revised AUCL also provides a standalone paragraph regarding selling of the infringing goods. Selling of the infringing goods will now be subject to administrative penalties, except where the seller (a) is not aware that the goods are infringing; and (b) is able to prove that the goods are legitimately obtained and provide the information of the supplier. This provision also aligns with Article 64 of the Trademark Law.

4. Expanded scope of false advertising (Article 9)

Article 9 makes two important changes to the false-advertising rules. Firstly, it broadens protection against false advertising from just “consumers” to now include “other operators”. This change now clearly allows for the application of this Article 9 in the context of B2B disputes. Secondly, it explicitly bans fabricated “user reviews” as a method to create false or misleading promotions, in addition to the already existing ban on arranging fake transactions to boost numbers.

5. Enhanced regulation of online unfair competition (Article 13)

The revised AUCL also refines the rules on unfair competition in the digital economy, with Article 13 serving as its cornerstone. Article 13 explicitly prohibits business operators from leveraging data, algorithms, technologies, or platform rules to disrupt the normal operations of competitors’ network products or services. It also includes a newly codified prohibition against acquiring or using data held by other operators through improper means such as fraud, coercion, circumvention of technical safeguards, or destruction of technical management measures—acts that infringe upon data rights and distort market competition. Furthermore, the amendment targets manipulative platform behavior by banning the abuse of platform rules to orchestrate false transactions, fake reviews, or malicious returns, either directly or through third parties. These provisions reflect China's growing emphasis on fair competition in the online space, especially on China’s pervasive e-commerce platforms.

6. Strengthened obligations for platform operators (Article 21)

Article 21 imposes proactive governance duties on platform operators: they must incorporate fair competition rules into service agreements and transaction policies, establish mechanisms for reporting and resolving unfair competition disputes, and guide on-platform behavior in accordance with the law. Finally, when unfair competition is detected, platforms are required to take timely necessary remedial measures, maintain relevant records, and report violations to local supervisory authorities.

These reinforced obligations mark a more general signal of a shift from legal treatment of e-commerce platforms as passive hosts to giving platforms a more proactive stewardship role, reinforcing platforms’ role as gatekeepers of fair market competition.

7. Remedies, damages and fines (Articles 18, 19, 22, 25, 26, 28 and 29)

The amended AUCL introduces a proactive tool for administrative authorities through Article 18, which empowers them to conduct regulatory interviews with responsible personnel of suspected violators. This mechanism allows regulators to require explanations and suggest corrective proposals before formal investigations or penalties are initiated, reflecting a shift toward proactive governance. Complementing this, Article 19 also improves the confidentiality guarantees for authorities, mandating that authorities and their staff safeguard any trade secrets, personal privacy, or personal information obtained during investigations.

In article 22, the amendment provides more flexibility for the damages mechanism for unfair competition by amending that damages may be calculated based on:

• The actual losses suffered by the rights holder, or
• The illegal gains obtained by the infringer.

Compared with the pre-existing article under which, literally, the damage could only be calculated based on the infringer’s illegal profits when the loss suffered could not be confirmed, the merit of the new provision is that the dual standard provides explicit flexibility and can significantly increase recoverable damages in IP-related cases, especially those involving high-traffic digital platforms or widespread brand confusion.

As to the amounts of administrative fines, the revised AUCL abolishes the statutory minimum fine for false or misleading business promotion, which previously stood at RMB 200,000, while maintaining the upper limit of RMB 1 million for normal infringement in Article 25, thereby granting enforcement authorities greater discretion to tailor penalties based on the severity of each case. However, it is worth noting this article does not apply to false advertising activities that fall under regulation of the Advertising Law, which still sets the minimum fine at RMB 200,000 where the advertising expenses are incalculable or evidently low.

Simultaneously, for trade secrets violation (article 26), commercial defamation (Article 28) and online unfair competition (Article 29), the limits for the two levels of administrative fines are increased and harmonized to up to RMB 1 million for normal infringement, and up to RMB 5 million for serious infringements.

8. Extraterritorial reach (Article 40)

Notably, the AUCL’s article 40 also expands the territorial reach of the law, and stipulates that it also applies to unfair competition acts committed outside China insofar that these acts:

• Disrupt the order of competition in China’s domestic market, and
• Harm the lawful rights and interests of business operators or consumers in the domestic market.

This provision reflects China’s growing emphasis on cross-border enforcement. The change empowers both domestic rights holders and administrative authorities to prosecute infringing or unfair competition acts that happen out of China, —such as digital infringement, confusion, brand impersonation or unfair advertising on foreign social media platforms, but harm the legitimate rights of Chinese domestic rights holders.

Conclusion

The third amendment to China’s Anti-Unfair Competition Law represents a decisive step for China toward modernizing its unfair competition law in an increasingly digital and platform-driven economy. Businesses operating in - or targeting- China should reassess their IP strategies, digital marketing practices, and platform partnerships to ensure compliance and maximize protection under the new law.

Authored by Stefaan Meuwissen, Elsie Pan, Grace Guo, and Helen Xia.