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Trends related to IT rules and regulations - Part 2: Other countries - EY - China

New rules and regulations on IT and fair competition

Trends related to IT rules and regulations - Part 2: Other countries / areas

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Figure 3. Comparison of penalties for infringing on software IP rights in selected countries and territories

Source: Legal publications of the listed countries
21 For criminal cases

Figure 4. ACTA signatories as of January 2012

Source: CMBJ; Wikimedia Commons
Source: Signatories are Australia, Canada, Japan, Morocco, New Zealand, Singapore, South Korea, United States, the European Union and 22 of its members states

Figure 5

Source: Various sources; EY analysis

In reflecting the seriousness of software IP rights infringement, the penalties have become more severe.

The US appears to be paving the way in introducing rules and regulations that specifically target the use of illegal IT and its impact on competition. While such specific laws do not yet exist in other countries or jurisdictions, this does not mean the absence of competition legislation or copyright and IP legislation.

In fact, most countries have competition laws that deal with anti-competitive behaviour, as well as government regulators that aid in the enforcement of such laws.

Laws involving IP infringement and the use of illegal software are also common in
most countries.

However, the laws that deal with anti-competitive practices are generally meant to prevent situations such as monopolistic behaviour, or address issues such as the restraint of competitive trade for a product or within an industry.

Laws that target the use of illegal IT are typically compartmentalized from anti-competitive behaviour, and are invoked either by the copyright holder or the relevant enforcement agency.

Antitrust laws should in theory cover the use of illegal IT to gain unfair competitive advantages in the marketplace. In practice, however, there does not yet appear to have been any significant cases involving the use of illegal IT as a main driver for anti-competitive behaviour.

Many countries have put in place legislation that addresses software IP rights infringement, allowing the copyright holder to seek redress in a court of law. In reflecting the seriousness of software IP rights infringement, the penalties have, correspondingly, become more severe.

While enforcement of software IP rights legislations play an important role in the protection of software IP rights, the ability and effectiveness of the regulator or enforcement agency varies from country to country (Figure 3).

Other trends to encourage fair competition

Concern over illegal IT and unfair competition continues to spread across the globe.

One way that has manifested itself is through a multi-national treaty that is similar to the SOPA and PIPA in the US. Known as the Anti-Counterfeiting Trade Agreement (ACTA), this treaty aims to establish international standards for IP rights enforcement.

The objective of ACTA is to develop an international legal framework to deal with counterfeit products, generic medication and copyright infringement on the Internet – all of which have an impact on fair competition.

ACTA was met with opposition from some fronts. Opponents voiced concern about
the Agreement’s potential effect on freedom of expression and privacy.

To date, 31 signatories have shown their support for ACTA. However, ACTA is not currently in force as it has yet to be ratified.

Issues concerning IPR protection and enforcement also received strong support from the Group of Eight (G8) leaders meeting in May 2012.

Responses to IT rules and regulations

The responses to the UCA and related legislation have been generally positive. Proponents applaud the greater emphasis on IT responsibility, while opponents are concerned about the potential burden on liability and financial aspects.

 

Economies with strong manufacturing interests, including trade associations, industry associations, and law firms, have advised their manufacturing industry to comply with IT legislation, stating compliance could be a competitive differentiator in the future.

 

 

 


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  • Stephen Y. Lo 
    Asia Pacific Technology and Telecommunications Industry
    Advisory Leader
    +86 10 5815 2837
  • Edward Chang 
    Advisory Partner
    +86 10 5815 2321
  • Keith Yuen 
    Advisory Partner
    +86 21 2228 2252
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