CHINA Trends and Developments Contributed by: Zhang Yunyan, Yang Dong, Shang Zicheng and Ye Xin, Beijing Jincheng Tongda & Neal (Shanghai) Law Firm
The judgment establishes an important judicial prin - ciple prohibiting competitors from systematically scraping and reusing core platform data to replace or replicate another platform’s services. Businesses that rely heavily on data-driven operations should therefore carefully review both the methods by which data is obtained and the scope of its subsequent use in order to minimise unfair competition risks. Overall, recent judicial developments demonstrate that Chinese courts are continuing to refine the appli - cation of existing laws to emerging issues arising from the development of the IT sector. Through representa - tive cases involving AI, personal information protec - tion, data security and digital platform competition, the courts have provided greater legal certainty for businesses operating in China. As regulatory policies and judicial practice continue to evolve in parallel, businesses should monitor not only legislative devel - opments but also emerging judicial trends and adjust their compliance frameworks and business operations accordingly. Future regulatory trends and compliance recommendations Looking ahead, China’s regulatory framework for the IT sector is expected to continue evolving alongside the rapid development of emerging technologies such as AI, big data and cloud computing. Future regulatory initiatives are likely to focus on maintaining an appro - priate balance between encouraging technological innovation and safeguarding data security, cyberse - curity and other public interests. Further refinement of the regulatory framework is expected in key areas including AI governance, data security, personal infor - mation protection and digital platform regulation. China’s regulatory approach is becoming increasingly rules-based, refined and sophisticated. Supported by a comprehensive legislative and regulatory frame - work, the current regime seeks to regulate techno - logical innovation, data processing and digital mar - ket competition while continuing to provide sufficient space for legitimate technological development and commercial innovation. Against this regulatory backdrop, businesses should establish comprehensive and ongoing compliance
programmes capable of adapting to both regulatory developments and evolving judicial practice. For example, businesses engaged in AIGC-related activities should maintain comprehensive records of prompts, parameter settings and subsequent human modifications to facilitate the verification of copyright ownership in the event of disputes. When processing personal information, businesses should review and optimise their authorisation mechanisms by eliminat - ing mandatory consent practices, providing genuine opt-out options and ensuring compliance with the principle of data minimisation. In relation to data secu - rity, companies should implement integrated technical and organisational safeguards covering encryption, audit logging, monitoring and incident response, sup - ported by regular internal audits and security assess - ments. Businesses should also avoid scraping or reusing competitors’ proprietary data without proper authorisation and instead compete through independ - ent innovation in order to minimise unfair competition risks. More broadly, IT companies should continue strength - ening their internal compliance governance by estab - lishing comprehensive policies covering data security, personal information protection and intellectual prop - erty management. For both domestic and international businesses oper - ating in China, compliance will increasingly require more than satisfying individual statutory obligations. Instead, companies should develop integrated com - pliance frameworks covering AI governance, data security, personal information protection, cybersecuri - ty and intellectual property management. Embedding compliance considerations throughout product devel - opment, data governance and day-to-day business operations will be essential to balancing technological innovation with sustainable commercial growth in an increasingly complex regulatory environment. Beyond compliance with individual legal requirements, businesses should increasingly adopt a governance- based approach to regulatory risk management. Rath - er than treating AI governance, cybersecurity, data protection and intellectual property as separate com - pliance functions, companies should establish an inte -
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