CHINA Trends and Developments Contributed by: Ting Liu, Fang Pan and Xiangru Chen, King & Wood Mallesons
King & Wood Mallesons 28th Floor, China Resources Tower 2666 Keyuan South Road Nanshan District Shenzhen Guangdong
People’s Republic of China Tel: +86 0755 2216 7179 Fax: +86 0755 2216 3380 Email: liuting@cn.kwm.com Web: www.kwm.com
Introduction China’s commercial legal landscape has undergone a series of profound transformations in 2025, from the comprehensive revision of the Anti-Unfair Com - petition Law of the People’s Republic of China (the “New PRC Anti-Unfair Competition Law”) to the suc - cessive issuance of new judicial interpretations on labour disputes by the Supreme People’s Court of the People’s Republic of China (the “PRC Supreme People’s Court”). These updated legal frameworks not only broaden the scope of employee misconduct and corresponding liability but also extend investigative coverage beyond national borders and from senior management down to key personnel. Meanwhile, the rapid adoption of artificial intelligence (AI) technology, while driving dramatic leaps in investigative efficiency, has introduced new challenges and compliance risks. The Expanding Scope of Employee Misconduct and Elevated Internal Investigation Burden New misconduct and legal liabilities under the New PRC Anti-Unfair Competition Law On 25 December 2024, the Draft Amendment to the Anti-Unfair Competition Law of the People’s Repub - lic of China (the “Draft Amendment”) was officially released for public comment. Following this process of deliberation and refinement, the New PRC Anti- Unfair Competition Law was issued on 27 June 2025 and formally came into force on 15 October 2025. The New PRC Anti-Unfair Competition Law brings about key changes essential for safeguarding a fair com - petitive market, and extends its influence to internal corporate matters such as employee investigations.
The newly added illegal circumstance of “accepting bribery” from an anti-competitive perspective Compared with the version prior to amendment, Arti - cle 8 of the New PRC Anti-Unfair Competition Law explicitly incorporates the regulation of bribe accept - ance and prohibits any enterprise or individual from accepting bribes. Notably, unlike the Draft Amend - ment, the New PRC Anti-Unfair Competition Law expands the scope of bribe acceptance from being confined to “transactional activities” to covering all possible scenarios, specifically: • Article 8 of the Draft Amendment – no relevant entity or individual may accept bribes in the course of transactional activities; and • Article 8 of the New PRC Anti-Unfair Competition Law – no relevant entity or individual may accept bribes. Accordingly, Article 24 of the New PRC Anti-Unfair Competition Law provides for administrative penalties regarding accepting bribes and increases the severity of penalties for offering bribes. It also expands liabil - ity to include not only the employer for acts of com - mercial bribery, but also the legal representatives and key personnel involved in bribe-offering, as well as all employees involved in bribe-taking. Furthermore, Article 40 establishes the extraterrito - rial application of the New PRC Anti-Unfair Competi - tion Law, stipulating that acts of unfair competition committed outside PRC which disrupt the domestic market order or infringe upon the lawful interests of domestic business operators shall also be subject
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