A Shanghai judge said courts should give greater weight to public welfare in data-related unfair competition cases and avoid approaches that could create “data monopolies.”
A judge at the Shanghai High People’s Court said Chinese courts reviewing data-related unfair competition disputes should focus not only on competitive interests but also on innovation, consumer welfare and broader public interests. Speaking at a recent competition conference, the judge warned against judicial approaches that could contribute to the emergence of “data monopolies.”
The remarks centered on Article 13 of China’s Anti-Unfair Competition Law, which prohibits companies from using improper means to obtain or use data lawfully held by other market participants. Improper conduct includes fraud, coercion and circumventing or sabotaging technical protection measures.
The judge said courts should consider the nature of the data involved, including whether it is processed or raw, public or non-public, and whether technical restrictions or the data holder’s commercial intentions were violated.
Courts should also assess the effects of the conduct, including whether the data was transformed into a new product or merely reused in its original form, and whether such practices create a substantial substitutive effect for existing products or services.
According to the judge, harm to competitors or claims that a rival benefited “without sufficient effort” should not automatically constitute unfair competition. Instead, courts should focus on whether the conduct distorts market order and the competitive environment.
The presentation also called for a “prudent and inclusive” approach toward emerging internet business models to avoid excessive intervention that could hinder technological innovation and development of China’s digital market.
The presentation also advocated a “multi-dimensional” approach to internet competition disputes, combining business-ethics analysis, competition-on-the-merits analysis, proportionality review and competition-impact assessment with consideration of commercial interests, consumer welfare, market order and broader public interests.
The judge also addressed the “catch-all” provision under Article 13, which prohibits conduct interfering with the normal operation of online services provided by other operators. She said courts should assess the actual effects on competition, users’ rights and innovation rather than rely on a mechanical interpretation of the law.
Source: MLex
