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The Peoples Republic of China Anti-Unfair Competition Law
The People’s Republic of China Anti-Unfair Competition Law (hereinafter referred to as the “PRC Anti-Unfair Competition Law”) was first promulgated on December 4, 1993 and came into effect on September 1, 1994. The purpose of the law is to ensure a healthy market competition environment and to conduct market supervision, and protect the social public interests.
The PRC Anti-Unfair Competition Law defines “Unfair Competition” as an unlawful act to use unfair means to commercialize or disseminate a false, unhealthy or unlawfully-obtained trading pass and other behaviors that damage or disrupt business activities, as well as other behaviors that violate social public interests and damage the monopolist’s legitimate rights.
The PRC Anti-Unfair Competition Law employs several measures to prevent unfair competition. F irs t, is prohibited from using fraud to distort, alter, fabricate business patters, falsely exaggerated the qualifications and the quality of commodities and mislead others. Second, it is prohibited to conduct deceptive advertisement and deceiving other business operators by setting misleading advertisement of commodities or services and claim that the sellers have certain quality assurances that they do not have. Third, i t is prohibited to violate decrees and act as a reseller and buy up commodities to intentionally raise prices. Lastly, it is prohibited of taking advantage of technical monopoly and trade secrets to interfere with the normal competitive activities.
The PRC Anti- Unfair Competition Law prescribes several sanctions including warning, confiscation of illegal gains, fines, orders to suspend or close a business, confiscated illegal goods or items, revocation or refuse to renew a business license and possession of the public publicity rights and the right to initiate a lawsuit for other entities or individuals, and a cease and desist order.
To face increasingly complicated market competition, the Standing Committee of the National People’s Congress adopted a decision to revise the PRC Anti-unfair Competition Law on November 4, 2017. The amendment addressed the new normal of market competition where business activities are not confined within the traditional brick and mortar stores. According to the new amendment, the scope of unfair competition has been extended to cover the digital market including unfair networking and competition involving information technology.
In conclusion, the PRC Anti-Unfair Competition Law and its amendment have served their intended functions of promulgating and regulating various market activities in order to create a more just and efficient market competition environment. The implementation of these laws reinforced the original principles of fairness and prevented the infringement of legitimate interests of both businesses and consumers so as to create a healthy market competition environment. With the adoption of the latest amendment, the People’s Republic of China has once again demonstrated its commitment to providing a safe, compliant, and fair market environment that both foreign and domestic players can rely on.
