In a move that underscores Beijing’s ongoing commitment to fostering a “fair and orderly” digital economy, China’s State Administration for Market Regulation (SAMR) has issued targeted compliance guidance for the smartphone industry. Announced on Wednesday in Shenzhen—a hub for tech innovation and home to giants like Huawei and Tencent—the guidelines aim to curb anti-competitive practices among smartphone manufacturers and mobile application platform operators. This development arrives amid broader regulatory reforms, including the sweeping revisions to the Anti-Unfair Competition Law (AUCL) earlier in 2025, signaling a new era of heightened oversight for one of the world’s most dynamic tech sectors.
The Guidance: A Blueprint for Fair Play
The new anti-unfair competition compliance guidance provides a practical framework for companies to self-assess and mitigate risks in their operations. Drawing from enforcement experiences, it emphasizes proactive measures such as establishing internal audit mechanisms, training programs on antitrust risks, and reporting systems for potential violations. Key focus areas include:
- Algorithmic Transparency and Pricing Practices: Platforms must scrutinize algorithms used for product recommendations, dynamic pricing, and advertising to prevent coordinated price undercutting or exclusionary tactics. For instance, automated systems that track competitors’ prices and force merchants to match or undercut them—sometimes below cost—could now trigger scrutiny under the expanded AUCL definitions.
- Data Usage and Market Intelligence: The rules prohibit the misuse of third-party data for competitive intelligence, such as scraping rival app data to gain an edge in app store rankings or user acquisition. This ties into the AUCL’s broadened prohibitions on data-driven abuses, requiring firms to audit their data pipelines for compliance.
- Platform Neutrality and Access: Mobile app platforms, which dominate smartphone ecosystems, are urged to implement clear rules for merchant onboarding, dispute resolution, and non-discriminatory access. Exclusive dealing—such as pressuring developers to avoid rival platforms—faces explicit bans, echoing past penalties on firms like Alibaba.
Unlike binding legislation, this guidance is voluntary but serves as a “soft law” benchmark. Non-compliance could invite investigations, fines up to 10% of annual revenue under the Anti-Monopoly Law (AML), or even forced restructuring. SAMR officials have described it as a tool to “bolster internal compliance systems while supporting market-driven innovation.”
Why Now? Navigating a Maturing Market
China’s smartphone market, valued at over $200 billion in 2024, has matured into a battleground of fierce innovation and cutthroat rivalry. Domestic leaders like Huawei, Xiaomi, Oppo, and Vivo command more than 70% of global shipments, but growth has slowed to single digits amid economic headwinds and U.S. export curbs on advanced chips. Against this backdrop, regulators view unfair practices as a drag on sustainable development.
The timing aligns with the 2025 AUCL overhaul, which expanded “confusion” to cover hidden keyword bidding on competitors’ trademarks and introduced extraterritorial reach for cross-border violations. It also builds on the AML amendments effective since 2022, which added digital-specific provisions like bans on algorithmic collusion. Recent enforcement trends show SAMR prioritizing monopoly agreements in tech, with probes into upstream suppliers and platform operators rising 30% year-over-year.
For smartphone makers, the stakes are high. App ecosystems drive device loyalty, and any whiff of exclusionary tactics—such as favoring in-house apps over third-party ones—could erode consumer trust and invite global backlash, especially as firms eye expansion into Europe and Southeast Asia.
Industry Reactions: Caution Amid Opportunity
Early responses from the sector blend wariness with optimism. Xiaomi, a vocal proponent of transparency, hailed the guidance as a “step toward healthier competition” in its latest transparency report, though it stopped short of detailing internal adjustments. Huawei, still navigating U.S. sanctions, emphasized its commitment to “global standards” without specifics. Smaller players like Oppo and Vivo may benefit most, as the rules level the playing field against dominant platforms.
Analysts, however, warn of compliance burdens. “This isn’t just box-ticking; it’s a cultural shift toward self-regulation in a high-stakes environment,” said a Beijing-based antitrust expert. Firms will need to invest in AI ethics teams and legal audits, potentially adding millions to operational costs. Yet, proponents argue it could spur genuine innovation by reducing predatory pricing wars that have squeezed margins to razor-thin levels.
Broader Implications: A Template for Digital Regulation
This smartphone-specific guidance is no outlier—it’s part of SAMR’s blitz on digital platforms, including drafts on algorithmic governance released just weeks ago. It reflects China’s “dual circulation” strategy: fortifying domestic markets while preparing firms for international competition under stricter rules.
For multinational partners, the message is clear: extraterritorial clauses mean global supply chains aren’t immune. As one legal firm noted, “Businesses must treat AUCL compliance as core, reviewing everything from keyword strategies to data-sharing pacts.”
In the end, while the guidance may crimp short-term agility, it positions China’s smartphone giants for long-term resilience. As Beijing doubles down on “high-quality development,” the sector’s ability to adapt will determine whether it leads the next wave of global tech dominance—or gets sidelined by its own success. Watch this space: with public consultations ongoing, refinements could roll out by early 2026.