CHANG TSI
Insights
On March 30, 2026, China’s State Administration for Market Regulation (SAMR) issued the Notice on Further Implementing the Anti-Unfair Competition Law (the “Notice”), marking the shift of the newly revised Anti-Unfair Competition Law (AUCL, effective October 15, 2025) from legislative completion to full enforcement. The Notice covers enforcement priorities, institutional development, capacity building, and social co-governance—translating statutory provisions into actionable regulatory pathways.
From an IP protection perspective, five developments deserve particular attention.
Article 7 of the Notice deploys enforcement measures for the AUCL’s extraterritorial application, targeting overseas acts of false advertising, trade secret misappropriation, commercial defamation, and online unfair competition that disrupt China’s domestic market order or harm domestic right holders. This operationalizes Article 40 of the revised AUCL—which adopts an “effects doctrine” focused on where harm occurs rather than where the actor is registered—and aligns with Article 27 of the Supreme People’s Court’s Judicial Interpretation, which grants jurisdiction to courts at the place where infringing results occur within China.
For brand owners, this closes a long-standing enforcement gap. A typical scenario: an infringer registers a shell company overseas with a name confusingly similar to a well-known Chinese brand, then conducts false advertising targeting the Chinese market via cross-border e-commerce or social media. A more covert variant involves using such a shell entity as an investor to establish a domestic affiliate, which then claims “foreign origin” to create source confusion with the right holder’s brand. The new framework enables right holders to pursue both the domestic affiliate directly and, where needed, pierce through to the overseas entity under Article 40 and the newly added “helping confusion” provision.
The Notice signals a regulatory upgrade: SAMR will push forward the drafting of a Regulation on Prohibiting Online Unfair Competition—an administrative regulation with higher legal authority than the current interim departmental rule (effective September 2024). Enforcement will leverage the AUCL’s new data rights provisions and strengthen oversight of related industries. For data-intensive and AI enterprises, the boundaries around data collection, use, and trading are narrowing, while right holders’ space to assert data protection is expanding.
Article 6 of the Notice outlines a comprehensive framework spanning rulemaking, service infrastructure, national standards, and a state-promoted certification system for trade secret management. Coupled with SAMR’s Trade Secret Protection Regulations (effective June 1, 2026) and high-profile judicial attention at the 2026 Two Sessions, this marks a systemic shift.
The planned “state-promoted certification” (similar to the existing IP management system certification) will make trade secret protection capabilities quantifiable and comparable. Whether an enterprise has obtained certification may serve as evidence of “reasonable confidentiality measures” in enforcement and litigation, and influence competitiveness in government procurement, due diligence, and investment assessments.
The revised AUCL has already codified key provisions—including treating keyword hijacking as a form of passing off, prohibiting “helping” confusion, and assigning liability to sellers of infringing goods. The Notice’s contribution lies in providing enforcement-level operational guidance: calibrating how to “correctly apply” these provisions, “reasonably define” the responsibilities of intermediaries such as platforms and distributors, and strike the balance between “neither over-expanding the scope of protection nor condoning violations.” For brand owners, this means the AUCL is becoming an increasingly operational tool alongside trademark and patent law.
The AUCL now explicitly prohibits platforms from forcing merchants to sell below cost. Article 2 of the Notice specifies enforcement across platform economy, photovoltaic, lithium battery, and new energy vehicle sectors. While price competition itself is not a core IP issue, the link is practical: forced below-cost selling often breeds counterfeit packaging, false claims, and review manipulation. The Notice’s upstream regulation of platform coercion complements the AUCL’s provisions on passing off and false advertising, offering brand owners a fuller enforcement toolkit.
The AUCL is no longer merely a “catch-all” supplement to patent, trademark, and copyright law. In areas such as data rights protection, trade secret governance, cross-border enforcement, and online competition regulation, it is becoming a foundational instrument in its own right. For enterprises operating in or with China, integrating anti-unfair competition strategies into the broader IP management framework is no longer optional—it is a baseline requirement for protecting innovation and sustaining competitive advantage.
Chang Tsi & Partners is a leading Chinese IP law firm. The firm’s Strategic Research Institute focuses on policy analysis and industry intelligence at the intersection of IP, competition, and technology regulation.
