Moral Interpretation of Competitive Order (Research on the Anti-Unfair Competition Law)

Author: Xie Xiaoyao
Publisher:
Publishing Date: April 1, 2005
Features: When writing the word "competition," one cannot help but feel a sense of apprehension. Competition permeates the entire natural world, the biological realm, and human society, making it an exceptionally high-frequency term. The Lisbon Group pointed out in The Limits of Competition that "if someone were to compile a bibliography for the 'entry competition/competitiveness' in books published in English in the last 15 years, the resulting volume could be thousands of pages thick." However, the accumulation of knowledge does not eliminate differences in understanding. A very unique phenomenon is that despite the competition field being long regarded as an exemplary area where law and economics have been exceptionally "prosperous," academia has maintained a very cautious attitude and a strong critical spirit toward "competition." Critiques of competition law theory and the judicial process have primarily targeted the interpretive capabilities and theoretical approaches of scholars and judges. In their view, economic theory and analytical models have naturally become the basic tools for constructing and implementing legal systems. Competition legislation and enforcement largely depend on the level of market analysis achieved through the application of economic knowledge. "Understanding competition and antitrust law is difficult. If there is any possibility of understanding, it requires familiarity with the economic theories and principles that underpin the legislation." "Before accurately applying antitrust law or trade regulations to a market, an in-depth study of the characteristics of that market is necessary." Meanwhile, scholars and judges have always been plagued by an "ignorance" regarding competition, lacking the necessary interpretive abilities. Some scholars have criticized that many people unfamiliar with economics often draw incorrect conclusions from simple observations. The American economist Lloyd Reynolds even mocked: "The Supreme Court once sentenced a 'grouping' oligopoly, with a market share as small as 20%, while a 'good' oligopoly, with a market share as large as ％." In China, some scholars have also raised similar criticisms. Competition law covers a broad scope, including antitrust legislation aimed at maintaining free competition and anti-unfair competition law aimed at ensuring fair competition. Antitrust legislation has evolved from structuralism to behavioralism and then to efficiency-based approaches, placing higher demands on the penetration of economic theory into legal theory. This is merely a of the knowledge of the discipline of competition law. In fact, our understanding of competition system law lacks not only economic knowledge but also the ability to overcome the limitations of legalism. The study of competition system law is situated at the intersection of knowledge from different disciplines, with uncertain and open boundaries, which determines its marginal characteristics and makes it impossible to have a single analytical and research method. The pluralistic understanding and interpretation of legal systems are not merely a piling up and spreading of knowledge materials in different fields. The perspectives of different disciplines, or what might be called "gaze," actually imply "problem awareness." A single, dogmatic, and stereotyped interpretation and interpretation of legal provisions will overlook the external perspectives of understanding the system, and knowledge will become generalized and stale. The diversification of interpretive tools and cognitive methods can lead to innovation in cognition, pursuing knowledge insights with keen insight from different perspectives of thinking, reducing superficial repetition, and exploring the internal logic of the development of things based on the breadth and depth of existing practice and theory, while dedicating oneself to thinking about various contradictions. Through the process of raising and solving problems, new achievements in understanding are obtained, which are more conducive to intellectual contributions. China promulgated the Anti-Unfair Competition Law as early as September 1993, yet the disorder and chaos in market competition have not been fundamentally curtailed. The rampant occurrence and persistent existence of phenomena such as counterfeiting and selling fake goods, and false advertising in the current economic life serve as clear evidence. In the past, when economic life encountered large or small problems, contradictions, or issues, we often turned to law, and calls for legislation would surge wave after wave. After legislation was enacted, we then blamed the incompleteness of the law and poor enforcement. As a result, some people have argued that China's legislation is too vague, incomplete, and lacks operability, advocating for the use of a technical means to meticulously draft a precise and comprehensive law to regulate all kinds of unfair competitive behaviors. Can unfair competitive behaviors be fully regulated through the meticulous design of human wisdom? Clearly, this legislative call implies an ideal logic of order constructionism. In academia, many scholars tend to view the Anti-Unfair Competition Law as a law of state intervention, part of the state's regulation and restructuring of market order in the face of market failure. This legal order comes from external intervention by state factors. However, this popular theory cannot answer the following question: When the norms followed by individuals in the market are based on external intervention, do the rules have predictability and calculability? If the government can effectively intervene in the market by designing competition order, how can the chaos of competition order in reality be explained? Clearly, simply viewing the Anti-Unfair Competition Law as legislation for state intervention in the economy ignores a comprehensive focus on the operation of the market itself. The general public's understanding of the Anti-Unfair Competition Law is even more concerning. A survey in one region found that most respondents had a shallow understanding of the Anti-Unfair Competition Law. Among the unit questionnaires, 4.5% were very familiar with it, 35.74% had a general understanding, 46.25% knew but did not understand it, and 13.51% did not know it at all. Among non-unit individuals, 2.46% were very familiar, 39.9% had a general understanding, 52.99% knew but did not understand it, and 4.65% did not know it at all. In the author's view, the above deviations are due to our lack of the appropriate interpretive capabilities and methods for the Anti-Unfair Competition Law. The topics related to competition law are beyond the author's capacity. To limit errors to a smaller scope, the author's reflections on competition order are limited to the "fairness" of competition, focusing on the study of the Anti-Unfair Competition Law, while excluding the currently more fashionable Antitrust Law from consideration. Of course, since the two have no clear knowledge boundaries, this division is not strictly meaningful. The theme of this book is "A Moral Interpretation of Competition Order," and the author must declare that morality is not a sermon. Linking competition order to moral issues, the author aims to clarify: What is the morality of the market system? Whose morality is it? How does it arise? What impact does it have on market order? What are the standards? This is an extremely important issue for understanding the Anti-Unfair Competition Law. Invoking moral principles in law and using them as the criteria for judging "fairness" and "unfairness," thereby determining "legal" and "illegal," establishes moral requirements for competition through legal form. Directly accepting moral principles as legal norms can alleviate and overcome the inherent contradictions and limitations of codified legislation. However, it is generally believed that morality is characterized by non-codification and flexibility, while competition in the market often requires institutional certainty. What is the rationality of introducing moral rules into law? How can moral norms both exhibit flexibility in responding to social changes and obtain corresponding certainty? How do moral norms function? Under the influence of moral norms, how do models of rights and obligations change? In this book, the author follows the above questions to argue that the Anti-Unfair Competition Law can be seen as a remedial measure for intellectual property rights. This supplementary norm introduces a moral rights argumentation framework, shifting from an objective argumentation based on the statutory source of rights to a direct inquiry into the "legitimacy" basis of rights, thereby expanding the protection of rights to a moral right that should be. The scope and extent of intellectual property rights protection are thereby expanded. Similarly, when the Anti-Unfair Competition Law expands the review of statutory obligations to the reasonable fairness of behavior, the scope of obligations is also expanded. The legal maxim "where there is no law, there is freedom" is constrained by moral obligations, and the norms of competition behavior are extended. Some behaviors that are not explicitly prohibited by law must be prohibited if they harm the competition order. Third, the extreme importance of legal and moral norms in maintaining competition order is self-evident. But does this mean that to maintain the orderly development of competition order, facing the ever-changing competitive behaviors, we can meticulously design a perfect order rule? The government's efforts to regulate and standardize the market economy order are indeed important, but does this mean that the market competition order is a norm derived from external authority, and order is the result of "rectification" by administrative authorities? In recent years, moral education has been carried out from the central to the local level, and some localities and departments have even strived to promote the codification and legalization of moral construction, thereby promoting the healthy development of competition order. Can morality really be artificially created? This book argues that competition order is the product of interactive behavior among market participants in competition. This is an intrinsic rule that is self-generating and spontaneous. Whether it is law or morality, both are derived from experiential knowledge in the process of competition, not the result of human design and planning. Overemphasis on the government's construction of order will hinder the mechanism by which the system generates itself according to its own logic and will also increase uncertainties in transactions. Market participants are not only participants in the formation of market order but also effective maintainers of competition order. The legal order of the Anti-Unfair Competition Law cannot be effectively implemented without the effective use of social spontaneous forces. The duality of knowledge and ignorance reflects both the breadth and depth of existing understanding, as well as the breadth and depth of exploration into unknown fields. It is the "unknowing" within knowledge, the knowledge of the unknown. Here, a phenomenon known as the "Meno Paradox" emerges: people always face a logical dilemma—there is no need to seek what they already know because they know it, and they will not seek what they do not know because they do not yet know that they do not know it. Exploring the unknown through the known must, to a certain extent, rely on theoretical assumptions and methods of thinking. Problems and methods are interrelated. The formulation, deduction, and argumentation of problems are guided by certain methods of thinking, and different methods lead to different "problems" and conclusions. The application of methods also depends on the consideration and questioning of problems, determined by the "truth" or "falsity" of the problems. The meaning and value of problems. The market needs a sound order, an undeniable proposition. How is this order constructed and maintained? Different standpoints, analytical platforms, foundational arguments, and interpretive methods will lead to different conclusions. The author's interpretation of competition order is primarily based on the following standpoints and methods: 1. Market orientation. In resource allocation and coordination of interpersonal relationships, the market and the government are not at the same logical starting point and functional order. The market plays a fundamental and primary role, and is in a priority position. Logically, the market precedes the government, and government intervention is based on the fundamental regulation of the market. Intervention is "market failure" and is only introduced afterward. Although intervention comes from the tangible hand of the state, it is rooted in the soil of the market. It is the market's demand for freedom that leads to intervention, and intervention is intervention to maintain free competition. Without intervention in freedom, there is no freedom from intervention. Intervention is merely another manifestation of a free market. Before the government intervenes in economic life, it must first consider the market's fundamental coordinating function. 2. Epistemology: Bounded Rationality. People are not omniscient sages and do not possess natural judgment capabilities over their own interests and the market. They all have bounded rationality and are "opportunists" in reality. Bounded rationality is a "constructive ignorance" in human knowledge, meaning that only a small portion of knowledge is concentrated in one person's mind, and no one possesses complete knowledge. Free competition is a mechanism for knowledge dissemination and a mechanism for institutional creation. Competition allows humans to accumulate and build upon effective knowledge from past experiences, forming habits, morals, and laws. It is precisely in this sense that bounded rationality also determines that law and morality in competition order are not the result of a priori human design. No individual or organization has this capability. The Anti-Unfair Competition Law uses a morally inclusive and flexible norm as a behavioral standard, reflecting that the maintenance of competition order must rely on the experiences and habits of human cooperation. Good habits have the function of guiding future behavior orientation. 3. Individualistic orientation. The individualistic stance assumes that the issuance of institutional rules is based on an individualistic logical starting point, and all behavior revolves around the maximization of individual interests. Human behavior can be guided by incentives, but it is difficult to allocate through centralized methods. The need for individuals to maximize their interests also suggests that through institutional incentives and constraints, individual behavior can be effectively guided to pursue personal interests while meeting the needs of society. The moral norms of the Anti-Unfair Competition Law come from interactions in empirical life. The maintenance and restraint of moral rights and obligations can provide incentives for the "law-abiding" behavior of parties, while state intervention in market competition order may hinder the market regulation and generation of interests. 4. Cost Analysis and Interest Balance. The essence of competition is to ensure the efficient allocation of resources among multiple alternative uses, and cost analysis is naturally an important variable in reading the system. However, in market competition, the equally important protection of diversified subjects, interests, and value orientations requires no simple choice. To a certain extent, the Anti-Unfair Competition Law aims to maintain the entire competition order, and this order can only be established on the effective assessment and weighing of different interests. In the process of interpreting the order, the legal text, as a "materialized" norm and a repository of past experiential knowledge, naturally plays a significant role. Emphasizing the interpretation of the provisions of the Anti-Unfair Competition Law is particularly meaningful for deepening the understanding of competition order and strengthening the implementation of the law. Currently, during the revision process of the Anti-Unfair Competition Law, there is a very strong call for the formulation of more rigorous, detailed, and specific provisions. This also reflects society's various expectations of legal texts from one side. This expectation is an aspiration for the predictability, calculability, and stability of competition order. However, legal texts have always been descriptions and portrayals of the living social reality. The interpretation of legal texts must not only know what is but also why it is. Behind the rigid legal provisions lies a series of subtle, thought-provoking social stories, filled with rational, wise, and dynamic economic logic. How to read the story hidden in this implies the key to understanding where the system comes from and where it is going, as well as the necessity of revealing the profound implications of the system. Therefore, a reasonable approach is to use legal texts to interpret the rational life of the socio-economic level, and to use the real situation of economic life to observe the distance from legal texts. In China, the promulgation and implementation of the Anti-Unfair Competition Law have already been 20 years. This legislation, marking the starting point of the market economy, needs to transcend the limitations of specific time and space with the changing times. The interpretation of the system requires more use of the rich and varied socio-economic life to reflect and critique the existing text. To a certain extent, the degree of our analysis and understanding of the economy and society determines our ability to interpret the text. In this book, the author focuses on reading a system while also expressing a higher enthusiasm for reading the socio-economy. The reading of order must not only focus on the law of the text but also take into account the "law in action." During the writing of this book, the author collected a large number of judicial rulings and administrative enforcement practices. A strong feeling is that these vast legal resources have not received sufficient attention and proper use from academia. Law is a rational discipline related to "social practice." It naturally has a strong practical nature, taking real-life legal phenomena, economic forms, and specific cases as materials and blueprints. From this perspective, law is practical, and it is based on the "living law." However, in many of our theoretical research, the practical nature of the law is often ignored, the rich judicial rulings and practices are disregarded, judicial materials are underestimated, and many valuable experiences are overlooked, refusing to summarize and synthesize them theoretically. The practicality of law does not affect its highly rational and humanistic nature. How to apply the hard legal provisions in the living reality is absolutely not an "automated vending machine"-style physical labor but an active rational process. Practitioners must use certain paradigms to reduce legal texts and condensed experience into concrete practice in real life, seeking its "living" expression. The moral stance, sense of justice, social concern, historical insight, professional standards, and logical deduction ability of practitioners will all invisibly influence the "results" of their practice. It is difficult to imagine a "matching" without a certain rational thinking and humanistic concern. How to interpret the order through existing rulings is also an important issue that the author is committed to thinking about.