On October 15, 2025, China’s revised Anti-Unfair Competition Law (AUCL) will take effect, ushering in the most significant overhaul of China’s market regulation in nearly a decade.
I began my legal career doing antitrust work at Kirkland & Ellis, so when China first rolled out its competition laws in the early 2000s, I expected a wave of sophisticated enforcement and compliance work. That didn’t happen. For years, enforcement was sporadic and often driven by political or policy priorities rather than market fairness. The 2025 AUCL revision suggests that may finally be changing, and foreign companies should take notice.
Passed by the National People’s Congress Standing Committee on June 27, 2025, this revision represents more than a modernization; it’s a fundamental shift in how China regulates competition, data, and executive accountability. It expands China’s regulatory reach beyond its borders, codifies new rules for the digital economy, and makes executives personally liable for misconduct.
For any multinational company with operations, suppliers, or customers tied to China (not just in China), this law is an urgent compliance trigger.
1. Regulating the Digital Economy: New Rules for Data, Algorithms, and Platforms
China’s regulators have spent years warning that the digital marketplace has become “involutionary” (内卷, neijuan), a self-defeating spiral of manipulation, fake engagement, and algorithmic coercion that substitutes harmful tactics for genuine innovation. The 2025 AUCL responds by establishing a comprehensive legal regime for digital conduct.
A. Algorithms, Data, and Platform Conduct
The revised law bans using data, algorithms, or platform rules to engage in unfair competition. Key prohibitions include:
Data Misappropriation: It is unlawful to obtain or use another operator’s data through deception, coercion, or technical circumvention (including advanced web scraping). Any company using AI or competitive intelligence tools must verify the legality of its data sources.
Malicious Digital Acts: The AUCL now defines fake orders, fabricated reviews, and malicious bulk returns as explicit forms of unfair competition.
Platform Abuse: E-commerce platforms cannot coerce merchants into selling below cost or restrict them from selling on rival platforms. Algorithmic pressure and rule-based discrimination are now enforceable offenses.
These provisions bring years of regulatory guidance into binding law, giving Chinese authorities clear grounds for digital enforcement.
B. Expanded Protection for Digital Brands
The AUCL also updates traditional “acts of confusion” to fit the digital age. It now protects social media handles, app names, and icons, not just trade names or trademarks. It even addresses keyword confusion, prohibiting the unauthorized use of another brand as a search keyword when it causes, or is likely to cause, consumer confusion.
For foreign brand owners, this means auditing online advertising strategies and ensuring all digital identifiers are registered and protected in China.
2. Extraterritorial Jurisdiction: China’s Expanding Long Arm
The most consequential development for global business lies in Article 40, which establishes explicit extraterritorial jurisdiction:
An act of unfair competition committed outside the territory of the People’s Republic of China which disrupts the order of market competition within the territory of the People’s Republic of China or damages the legitimate rights and interests of domestic business operators or consumers shall be dealt with in accordance with this Law.
In plain terms: the AUCL now applies globally if the impact of the conduct is felt in China.
This “long-arm” clause means that foreign companies (whether in advertising, data aggregation, e-commerce, or AI) can face investigation even if the conduct occurs entirely outside China.
Example: A U.S.-based software company that scrapes data from Chinese e-commerce platforms using servers in California could face AUCL enforcement if the data misappropriation harms Chinese competitors or consumers.
This provision aligns with China’s broader legal direction under the Data Security Law (see our [guide to China’s data transfer regime]), the Export Control Law, and the Anti-Foreign Sanctions Law. It cements China’s claim to regulate global conduct that affects its domestic market.
3. Commercial Bribery and Executive Exposure
China’s anti-corruption drive now has direct application under the AUCL. The 2025 revision tightens prohibitions on commercial bribery and introduces personal liability for those directly responsible.
A. The Dual-Target Rule
Both sides of a bribery transaction are now explicitly liable. This includes agents, intermediaries, and any third party whose influence affects a business transaction. This dual approach aligns the AUCL with China’s broader anti-corruption framework and global laws like the FCPA.
B. Escalated Penalties
Maximum corporate fines for severe commercial bribery have increased from RMB 3 million to RMB 5 million (about USD 700,000), along with confiscation of illegal gains and potential license revocation.
C. Personal Liability
For the first time, legal representatives, key executives, and directly responsible individuals face fines up to RMB 1 million (about USD 140,000) and confiscation of personal gains.
Example: A VP of Global Sales based in New York who approves a payment to a Chinese consultant to secure a contract could face personal fines, even if they never set foot in China. The “I didn’t know” defense won’t survive under this law.
4. Abuse of Advantageous Position: New Protections for SMEs
In another significant addition, the AUCL introduces a rule against abuse of advantageous position. Large enterprises and dominant operators may not exploit their financial, technological, or market advantages to impose “manifestly unreasonable” terms, especially regarding payment timing, methods, or liability.
This new clause strengthens protections for small and medium-sized enterprises (SMEs), aligning with Beijing’s broader policy goal of balancing market power and preventing predatory supplier contracts.
5. Compliance Strategy for Multinationals
With less than two weeks before the AUCL takes effect, companies must move from awareness to execution. Below are five high-priority actions to take now.
Risk Area
Action Required
Commercial Bribery
Update anti-bribery policies to reflect personal liability. Expand training to include both the giving and acceptance of bribes.
Extraterritorial Reach
Conduct a global AUCL audit to identify business practices abroad that could impact the Chinese market. Ensure cross-border consistency with China compliance standards.
Digital Conduct
Review data-sourcing methods and algorithms for compliance with prohibitions on data scraping, fake transactions, or coercive pricing. Example: A company using web scraping to monitor competitor prices or “growth hacking” through fake reviews could now violate Article 13.
Brand Protection
Register all key digital identifiers (social media accounts, app names, icons) as IP in China. Audit search marketing for unauthorized keyword use.
Internal Controls
Strengthen due diligence on third parties and local agents. Build auditable compliance records to defend against SAMR inquiries.
6. Enforcement Outlook: How the AUCL Will Be Applied
Beyond preparation, companies must understand how Chinese regulators are likely to approach enforcement of these new provisions. The State Administration for Market Regulation (SAMR) will lead enforcement, but it is expected to coordinate with cybersecurity and data authorities for cases involving algorithmic conduct or data misuse.
Investigations will likely begin with local subsidiaries or accessible data flows, then expand outward through cooperation requests or data evidence gathering. Early cases are expected in digital commerce and commercial bribery, where enforcement can demonstrate regulatory credibility quickly.
7. What Employers and Executives Must Watch Out For
Under China’s revised Anti-Unfair Competition Law (AUCL), effective October 15, 2025, employers must ensure that every aspect of their business complies with China’s expanding definition of “fair competition.”
The law now makes individual executives personally liable for commercial bribery and unfair digital practices. That means compliance failures can result in personal fines, confiscation of gains, and even entry risks for executives.
Most importantly, the AUCL’s extraterritorial jurisdiction means that even companies with no operations in China can be targeted if their conduct affects Chinese competitors, consumers, or markets. A company based entirely outside China could still trigger enforcement if, for example, its data collection, algorithmic pricing, or marketing practices distort the Chinese market. Executives whose decisions cause such effects should think twice before traveling to China, as personal liability may follow them across borders.
Tomorrow, we will publish a comprehensive FAQ designed to help foreign companies better understand and avoid AUCL-related risks, including detailed guidance on executive liability, digital conduct compliance, and practical steps for cross-border operations.
Conclusion: The New Cost of Doing Business in or with China
The revised AUCL signals a new era where digital conduct, executive behavior, and global operations all fall within China’s competition law perimeter. Companies must now treat AUCL compliance as a global operational requirement, not a regional checkbox.
With less than two weeks remaining before the October 15 effective date, companies cannot afford to wait.
