Legislators release latest Anti-Unfair Competition Law draft
Big companies, watch out.
On December 25, the legislature (NPCSC) released the second draft of the revised Anti-Unfair Competition Law.
Some context: The first draft was released in November 2022 during the tech crackdown, with the primary goal of regulating new forms of unfair competition emerging from the rise of the platform economy.
While the latest draft still largely focuses on internet platforms, one addition caught our attention:
- “Large enterprises must not abuse their advantageous positions…by imposing clearly unreasonable payment terms, payment methods, payment deadlines, or breach of contract liabilities on small and medium-sized enterprises.”
ICYDK: In China, it’s common for large companies to force small suppliers into unfair terms.
- Chinese new energy vehicle (NEV) makers are notorious for delaying supplier payments to improve cash flow, a practice common across many industries (Bloomberg).
Get smart: If included in the final revised law, this new provision will increase litigation risks for large corporates in China.
sources
Caixin: 修法拟禁止利用算法和平台规则搞不正当竞争 能否管住“内卷”
CCPIT: 反不正当竞争法（修订草案）公开征求意见，附修改前后对照表