The People's Republic of China Anti-Unfair Competition Law, The People's Republic of China Consumer Rights Protection Law.

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Publish Date: 2002-11-01
Features: The Anti-Unfair Competition Law of the People's Republic of China was passed by the Third Session of the Standing Committee of the Eighth National People's Congress of the People's Republic of China on September 2, 1993, and is hereby promulgated and implemented starting from December 1, 1993. President Jiang Zemin of the People's Republic of China, September 2, 1993. Article 1 To safeguard the healthy development of the socialist market economy, encourage and protect fair competition, prohibit unfair competition practices, and protect the legitimate rights and interests of operators and consumers, this Law is formulated. Article 2 In market transactions, operators shall adhere to the principles of voluntary, equal, fair, and good faith, and comply with recognized business ethics. Unfair competition referred to in this Law means that operators violate the provisions of this Law, infringe upon the legitimate rights and interests of other operators, and disrupt the order of the socialist market economy. The term "operator" refers to legal persons, other economic organizations, and individuals engaged in commodity operations or profitable services (hereinafter referred to as "commodities" shall include services). Article 3 Local people's governments at all levels shall take measures to prohibit unfair competition practices and create a good environment and conditions for fair competition. Administrative departments for industry and commerce at or above the county level shall supervise and inspect unfair competition practices; where laws and administrative regulations stipulate that other departments shall supervise and inspect, they shall comply with such provisions. Article 4 The state encourages, supports, and protects all organizations and individuals in carrying out social supervision of unfair competition practices. Public officials shall not support or cover up unfair competition practices.
Chapter II Unfair Competition Practices
Article 5 Operators shall not engage in market transactions using the following unfair means to harm competitors: (1) Counterfeiting others' registered trademarks; (2) Unauthorized use of the distinctive name, packaging, or decoration of well-known commodities, or using names, packaging, or decorations similar to those of well-known commodities, causing confusion with others' well-known commodities and making buyers mistakenly believe they are the well-known commodities; (3) Unauthorized use of the name or name of others' enterprises or individuals, leading buyers to mistake them for others' commodities; (4) Falsely forging or misusing certification marks, quality marks such as "high-quality" or "excellent," etc., on commodities, falsifying the origin of commodities, and making misleading false representations about the quality of commodities.
Article 6 Public utilities or other operators with exclusive status shall not restrict others from purchasing the commodities of the operators they designate, thereby eliminating fair competition among other operators.
Article 7 Governments and their affiliated departments shall not abuse administrative power to restrict others from purchasing the commodities of the operators they designate or to limit the legitimate business operations of other operators. Governments and their affiliated departments shall not abuse administrative power to restrict the entry of commodities from other regions into local markets or the flow of local commodities to other regions.
Article 8 Operators shall not engage in bribery using material or other means to sell or purchase commodities. If a party secretly provides rebates to another party or individual, it shall be treated as bribery; if another party or individual secretly accepts rebates, it shall also be treated as bribery. Operators may provide rebates to others in a transparent manner and may pay commissions to intermediaries. When providing rebates or commissions, operators must record them truthfully. Operators receiving rebates or commissions must also record them truthfully.
Article 9 Operators shall not use advertising or other methods to make misleading false representations about the quality, ingredients, performance, use, manufacturer, validity period, or origin of commodities. Advertising operators shall not, in the knowledge or reasonable belief of such circumstances, act as agents, design, produce, or publish false advertisements.
Article 10 Operators shall not engage in the following means to infringe upon trade secrets: (1) Obtaining the trade secrets of others through theft, inducement, coercion, or other unfair means; (2) Disclosing, using, or allowing others to use the trade secrets of others obtained through the means mentioned in the preceding paragraph; (3) Violating agreements or the confidentiality requirements of others regarding trade secrets, disclosing, using, or allowing others to use the trade secrets they control. A third party that knows or should know the illegal acts listed in the preceding paragraph and obtains, uses, or discloses others' trade secrets shall be deemed to have infringed upon trade secrets. The term "secret" in this article refers to technical and business information that is not known to the public, can bring economic benefits to the rightsholder, is practical, and has been protected by the rightsholder through confidentiality measures.
Article 11 Operators shall not sell commodities at prices below costs with the purpose of eliminating competitors. The following shall not be considered unfair practices: (1) Selling fresh commodities; (2) Disposing of commodities with an expiration date approaching; (3) Seasonal price reductions; (4) Selling commodities at reduced prices due to debt repayment, production transfer, or business closure.
Article 12 When selling commodities, operators shall not impose commodities or other unreasonable conditions against the wishes of buyers.
Article 13 Operators shall not engage in prize promotions in the following ways: (1) Using deceptive methods such as falsely claiming prizes or intentionally letting predetermined personnel win prizes; (2) Using prize promotions to push low-quality, high-priced commodities; (3) In prize promotions involving lotteries, the highest prize amount shall not exceed 5,000 yuan.
Article 14 Operators shall not fabricate or spread false facts to damage the business reputation or commodity reputation of competitors.
Article 15 Bidders shall not collude in tenders to inflate or depress prices. Bidders and bidders shall not collude to eliminate fair competition among competitors.
Chapter III Supervision and Inspection
Article 16 Supervision and inspection departments at or above the county level may conduct supervision and inspection of unfair competition practices.
Article 17 When supervising and inspecting unfair competition practices, supervision and inspection departments have the following powers: (1) In accordance with the prescribed procedures, to question the operators, interested parties, and witnesses under investigation and require them to provide evidence or other materials related to unfair competition practices; (2) To inquire into, copy, and collect agreements, ledgers, vouchers, documents, records, business correspondence, and other materials related to unfair competition practices; (3) To inspect properties related to unfair competition practices stipulated in Article 5 of this Law, and when necessary, to require the operators under investigation to explain the origin and quantity of the commodities, suspend sales, and await inspection. Properties related to unfair competition practices shall not be transferred, concealed, or destroyed.
Article 18 When supervising and inspecting unfair competition practices, staff of supervision and inspection departments shall present inspection certificates.
Article 19 When supervising and inspecting unfair competition practices, the operators, interested parties, and witnesses under investigation shall truthfully provide relevant materials or information.
Chapter IV Legal Liability
Article 20 If an operator violates the provisions of this Law and causes damage to the operator harmed, it shall bear compensation for the damages. If the loss of the harmed operator is difficult to calculate, the compensation shall be the profit obtained during the infringement period. The harmed operator shall also bear reasonable expenses incurred in investigating the unfair competition practices of the infringing operator. The harmed operator whose legitimate rights and interests have been damaged by unfair competition practices may file a lawsuit in court.
Article 21 If an operator counterfeits others' registered trademarks, uses others' enterprise names or names without authorization, falsifies or misuses certification marks, quality marks such as "high-quality" or "excellent," falsifies the origin of commodities, or makes misleading false representations about the quality of commodities, it shall be punished in accordance with the provisions of the Trademark Law of the People's Republic of China and the Product Quality Law of the People's Republic of China. If an operator uses the distinctive name, packaging, or decoration of well-known commodities without authorization or uses names, packaging, or decorations similar to those of well-known commodities, causing confusion with others' well-known commodities and making buyers mistakenly believe they are the well-known commodities, the supervision and inspection department shall order the cessation of illegal acts, confiscate illegal gains, and impose a fine of not less than one and not more than three times the illegal gains, depending on the circumstances. For serious cases, the business license may be revoked. If selling substandard commodities constitutes a crime, criminal liability shall be pursued.
Article 22 If an operator engages in bribery using material or other means to sell or purchase commodities and constitutes a crime, criminal liability shall be pursued. If it does not constitute a crime, the supervision and inspection department may impose a fine of not less than 10,000 yuan and not more than 200,000 yuan, depending on the circumstances, and confiscate illegal gains.
Article 23 If public utilities or other operators with exclusive status restrict others from purchasing the commodities of the operators they designate to eliminate fair competition among other operators, the supervision and inspection department at the provincial or municipal level shall order the cessation of illegal acts and impose a fine of not less than 50,000 yuan and not more than 200,000 yuan, depending on the circumstances. If the designated operator sells substandard or overcharges, the supervision and inspection department shall confiscate illegal gains and impose a fine of not less than one and not more than three times the illegal gains, depending on the circumstances.
Article 24 If an operator uses advertising or other methods to make misleading false representations about commodities, the supervision and inspection department shall order the cessation of illegal acts, eliminate the impact, and impose a fine of not less than 10,000 yuan and not more than 200,000 yuan, depending on the circumstances. Advertising operators, if they know or should know, act as agents, design, produce, or publish false advertisements, the supervision and inspection department shall order the cessation of illegal acts, confiscate illegal gains, and impose a fine in accordance with the law.
Article 25 If an operator violates the provisions of Article 10 of this Law and infringes upon trade secrets, the supervision and inspection department shall order the cessation of illegal acts and impose a fine of not less than 10,000 yuan and not more than 200,000 yuan, depending on the circumstances.
Article 26 If an operator violates the provisions of Article 13 of this Law and engages in prize promotions, the supervision and inspection department shall order the cessation of illegal acts and impose a fine of not less than 10,000 yuan and not more than 100,000 yuan, depending on the circumstances.
Article 27 If bidders collude in tenders to inflate or depress prices, or if bidders and bidders collude to eliminate fair competition among competitors, the winning bid shall be invalid. The supervision and inspection department may impose a fine of not less than 10,000 yuan and not more than 200,000 yuan, depending on the circumstances.
Article 28 If an operator violates the order to suspend sales and transfers, conceals, or destroys properties related to unfair competition practices, the supervision and inspection department may impose a fine of not less than one and not more than three times the value of the properties sold, transferred, concealed, or destroyed, depending on the circumstances.
Article 29 If a party is dissatisfied with the penalty decision made by the supervision and inspection department, it may apply for a review to the competent authority at the next higher level within 15 days of receiving the penalty decision. If dissatisfied with the review decision, it may file a lawsuit in court within 15 days of receiving the review decision. It may also file a lawsuit directly in court.
Article 30 If the government and its affiliated departments violate the provisions of Article 7 of this Law by restricting others from purchasing the commodities of the operators they designate, limiting the legitimate business operations of other operators, or restricting the normal flow of commodities between regions, the higher authority shall order them to correct their actions. For serious cases, the competent authority at the same level or higher shall impose administrative sanctions on the directly responsible persons. If the designated operator sells substandard or overcharges, the supervision and inspection department shall confiscate illegal gains and impose a fine of not less than one and not more than three times the illegal gains, depending on the circumstances.
Article 31 If state officials supervising and inspecting unfair competition practices abuse their power or neglect their duties and constitute a crime, criminal liability shall be pursued. If it does not constitute a crime, administrative sanctions shall be imposed.
Article 32 If state officials supervising and inspecting unfair competition practices engage in bribery, cover up operators who know or should know constitute a crime, and fail to bring them to justice, criminal liability shall be pursued.
Chapter V Supplementary Provisions
Article 33 This Law shall come into effect on December 1, 1993.