The Anti-unfair Competition Law of the People's Republic of
China (Revised Draft) was deliberated at the 26th Session of the
Standing Committee of the 12th National People's Congress
("NPC"), and is hereby promulgated via the website of the
NPC. The public may directly visit the website of the NPC
(www.npc.gov.cn) to submit comments, or send comments to the
Legislative Affairs Commission of the Standing Committee of the NPC
(at No. 1 Qianmen West Street, Xicheng District, Beijing, zip code:
100805; and, The words "comments on the revised draft of the
Anti-unfair Competition Law" shall be indicated on the
envelops). The deadline for providing comments is March 25,
2017.
Anti-unfair Competition Law of the People's Republic of China
(Revised Draft)
Chapter 1: General Provisions
Article 1 This Law is formulated with a view to safeguarding the
healthy development of the socialist market economy, encouraging
and protecting fair competition, prohibiting activities of unfair
competition, and protecting the legitimate rights and interests of
business operators and consumers.
Article 2 Business operators shall, during market transactions,
abide by the principles of voluntariness, equality, fairness,
honesty and good faith, and adhere to widely-recognized commercial
ethics.
For the purpose of this Law, activities of unfair competition shall
refer to the activities whereby a business operator, in violation
of the preceding Paragraph, engages in market transactions by
improper means, thus undermining the legitimate rights and
interests of other business operators and disrupting the order of
competition.
For the purpose of this Law, business operators shall refer to
natural persons, legal persons and other organizations that engage
in the business operations of products or for-profit services
(products referred to hereinafter shall include services).
Article 3 People's governments at all levels shall take
measures to prohibit activities of unfair competition and create a
favorable environment and conditions for fair competition.
The State Council shall establish a coordination mechanism for
anti-unfair competition work, study and make decisions on major
policies concerning anti-unfair competition, and coordinate the
resolution of major issues for maintaining the order of
competition.
Article 4 The departments responsible for industrial and commercial
administration of people's governments at and above the county
level (hereinafter referred to as the "Administration for
Industry and Commerce") shall investigate and punish
activities of unfair competition, provided that such activities
shall be investigated and punished by other departments if so
prescribed by laws or administrative regulations.
Article 5 The State encourages, supports and protects all
organizations and individuals to conduct public oversight of
activities of unfair competition.
State organs and their staff members shall not support or shield
activities of unfair competition.
Chapter 2: Activities of Unfair Competition
Article 6 A business operator shall not engage in market
transactions by any of the following improper means:
(1) Where the business operator uses, without authorization, the
names, packaging or decoration unique to well-known products, or
uses names, packaging or decoration similar to that of well-known
products, causing confusion between its products and the well-known
products of others and resulting in its products being mistaken for
the well-known products;
(2) Where the business operator uses, without authorization, the
enterprise name of another party and its abbreviation or trade
name, uses, without authorization, the name, pen names or stage
names of another party, or uses, without authorization, the name of
a social organization and its abbreviation, resulting in its
products being mistaken for the products of others;
(3) Where the business operator uses, without authorization, the
main part of the domain name of another party, the website name,
web pages and channels, program or column names and logos, etc. of
another party, resulting in its products being mistaken for the
products of others; or
(4) Where the business operator uses a registered trademark or an
unregistered well-known trademark of another party as the trade
name in its enterprise name, misleading the public.
Article 7 A business operator shall not use assets or other means
to bribe transaction counterparties or third parties who may affect
transactions. Transaction counterparties or third parties who may
affect transactions may not accept bribes.
During transaction activities, a business operator may provide
discounts for the relevant transaction counterparty in an express
manner, or pay commissions to the intermediary concerned. A
business operator shall truthfully credit relevant amounts into
account books if it provides discounts for transaction
counterparties or pays commissions to intermediaries. The business
operators who accept discounts or commissions shall also truthfully
credit such amounts into account books.
The acts of a staff member of a business operator to use bribes to
seek for transaction opportunities or competitive advantages for
the business operator shall be deemed as the conducts of the
business operator, unless the business operator has evidence to
prove that such acts are the conducts of the staff member in
his/her personal capacity.
For the purpose of Paragraph 1 of this Article, a third party who
may affect transactions shall refer to the entity or individual
that may use relevant power to influence transactions.
Article 8 A business operator shall not use advertising or other
means to engage in false or misleading business publicity
campaigns, and shall not engage in false transactions.
Article 9 A business operator shall not commit any of the following
acts that infringe upon trade secrets:
(1) Obtaining the trade secrets of a rights holder by theft,
bribery, coercion or other improper means;
(2) Disclosing, using or allowing others to use the trade secrets
of a rights holder that are obtained by any of the means prescribed
in the preceding Item; or
(3) Disclosing, using or allowing others to use the trade secrets
in its possession in breach of agreements or in violation of the
requirements of the relevant rights holder on keeping confidential
trade secrets.
For the purpose of this Law, trade secrets shall refer to the
technical information and business information that are not known
to the public and have commercial value and for which corresponding
confidentiality measures have been taken by their rights
holders.
Article 10 Any of the following acts shall be deemed as acts that
infringe upon trade secrets:
(1) Where an employee or a former employee of the rights holder of
a trade secret commits any of the acts prescribed in Paragraph 1 of
Article 9 herein; or
(2) Where a third party clearly knows or should have known that the
trade secret concerned is derived from an illegal channel provided
for in Paragraph 1 of Article 9 herein, but still obtains,
discloses, uses or allows others to use the trade secret.
Staff members of State organs, lawyers, certified public
accountants ("CPA") and other professionals shall keep
confidential the trade secrets that come to their knowledge during
the performance of duties.
Article 11 When selling a product, a business operator shall not
tie up the sales of other products against the wishes of
purchasers, and shall not impose any additional unreasonable
conditions.
Article 12 When engaging in sales by offering prizes, a business
operator shall not fall under any of the following
circumstances:
(1) Where information on the sales by offering prizes, such as the
categories of prizes, the conditions for redeeming prizes, the
amount of prize money or prizes, etc. is unclear, affecting the
redemption of prizes by purchasers;
(2) Where the business operator engages in sales by offering prizes
in a fraudulent manner, such as by falsely claiming there are
prizes available or deliberately letting persons who have been
internally determined win the prizes; or
(3) Where the business operator engages in sales by offering prizes
through lucky draws, and the amount of the highest prize exceeds
RMB 20,000.
Article 13 A business operator shall not fabricate and disseminate
falsehood to impair the commercial reputation and product
reputation of competitors.
Article 14 A business operator shall not use technical means to
engage in any of the following activities in the Internet field
that affect users' choices and interfere with the normal
operations of other business operators:
(1) Where the business operator, without obtaining consent, insert
links in the online products or services that are lawfully provided
by other business operators to force the redirection of
targets;
(2) Where the business operator misleads or compels users to
modify, close or uninstall the online products or services that are
lawfully provided by others, or deceives users into modifying,
closing or uninstalling such products or services;
(3) Where the business operator interferes with or destroys the
normal operation of the online products or services that are
lawfully provided by others; or
(4) Where the business operator maliciously causes incompatibility
with the online products or services that are lawfully provided by
other business operators.
Article 15 Where a business operator violates Article 2 herein, and
commits market transaction acts that seriously disrupt the order of
competition and genuinely need to be investigated and punished, in
the absence of any explicit provisions under Article 6 through to
Article 14 of Chapter 2 herein and under relevant laws and
administrative regulations, the Administration for Industry and
Commerce of the State Council shall, on its own or in conjunction
with other relevant departments of the State Council, study and put
forward opinions on recognizing such acts as activities of unfair
competition, and submit the same to the State Council for
decision.
Chapter 3: Supervision and Inspection
Article 16 A supervision and inspection department shall be
entitled to exercise the following functions and powers when
investigating activities of unfair competition:
(1) Entering the business premises suspected of activities of
unfair competition for inspection;
(2) Making inquiries to the business operator under investigation,
interested parties and other relevant entities and individuals, and
requiring them to provide supporting materials or other materials
related to the alleged activities of unfair competition;
(3) Inspecting and duplicating agreements, account books,
documentation, documents, records, business correspondences and
other materials related to the alleged activities of unfair
competition;
(4) Ordering the business operator under investigation to cease the
alleged activities of unfair competition and to explain the sources
and quantity of relevant assets;
(5) Sealing up and seizing assets related to the alleged activities
of unfair competition; and
(6) Inspecting the bank accounts of a business operator who is
suspected of committing activities of unfair competition and
deposit-related accounting documents, account books, reconciliation
statements, etc.
Article 17 Supervision and inspection departments and their staff
members shall supervise and inspect activities of unfair
competition pursuant to the Administrative Enforcement Law of the
People's Republic of China and other relevant laws and
administrative regulations.
Article 18 When supervision and inspection departments supervise
and inspect activities of unfair competition, the business
operators under inspection, interested parties and other relevant
entities and individuals shall truthfully provide relevant
materials or circumstances.
When conducting random checks of activities of unfair competition,
supervision and inspection departments shall randomly select the
parties to be inspected and randomly assign law enforcement
inspectors, and make public the situations of random checks and the
results of investigation and punishment in a timely manner.
Article 19 Any entity or individual shall be entitled to lodge
tip-offs against activities of unfair competition to supervision
and inspection departments. Supervision and inspection departments
shall make public the phone numbers, mailboxes or e-mail addresses
for receiving tip-offs, and arrange relevant personnel to accept
the tip-offs. Supervision and inspection departments shall inform
whistleblowers who lodge tip-offs in their real names of the
handling results, and keep confidential their identities.
Chapter 4: Legal Liabilities
Article 20 A business operator who violates this Law and causes
losses to others shall be liable for civil compensation in
accordance with the law.
A business operator whose legitimate rights and interests are
damaged by activities of unfair competition may bring a lawsuit to
the competent people's court.
Article 21 A business operator who violates any of the items from
Item (1) through to Item (3) of Article 6 herein shall be ordered
by the relevant supervision and inspection department to cease its
illegal acts and have the illegal products confiscated. Where the
amount of illegal business operations reaches or exceeds RMB
50,000, the business operator may concurrently be given a fine of
up to five times the amount of illegal business operations; and, in
the absence of any amount of illegal business operations or where
the amount of illegal business operations is less than RMB 50,000,
the business operator may be concurrently given a fine of up to RMB
250,000. Under grave circumstances, the business operator shall be
revoked of its business license.
A business operator who violates Item (4) of Article 6 herein shall
be ordered by the relevant supervision and inspection department to
apply for registration of name change within one month. Where the
business operator fails to submit an application for change of
registration within the prescribed time limit, the supervision and
inspection department shall mete out punishments in accordance with
the preceding Paragraph, and the original enterprise registration
authority shall remove the name of the business operator from the
enterprise credit information disclosure system, use the unified
social credit code to replace its name, and include the business
operator in the list of enterprises with abnormal business
operations. Under grave circumstances, the business operator shall
be revoked of its business license.
Article 22 A business operator who violates Article 7 herein, and
offers bribes to others or accepts bribes from others shall be
ordered by the relevant supervision and inspection department to
cease its illegal acts, and be given a fine of not less than RMB
100,000 but not more than RMB three million. Under grave
circumstances, the business operator shall be revoked of its
business license.
Article 23 A business operator who violates Article 8 herein shall
be punished in accordance with the Advertising Law of the
People's Republic of China. In the absence of applicable
provisions under the Advertising Law of the People's Republic
of China, the relevant supervision and inspection department shall
order the business operator to cease its illegal acts and impose
thereon a fine of not less than RMB 200,000 but not more than RMB
one million. Under grave circumstances, the business operator shall
be given a fine of not less than RMB one million but not more than
RMB two million, and may be revoked of its business license.
Article 24 Where a business operator infringes upon trade secrets
by violating Article 9 herein or a third party infringes upon trade
secrets by violating Article 10 herein, the relevant supervision
and inspection department shall order the business operator or the
third party to cease its illegal acts and impose thereon a fine of
not less than RMB 100,000 but not more than RMB 500,000. Under
grave circumstances, the business operator or the third party shall
be given a fine of not less than RMB 500,000 but not more than RMB
three million.
Where an employee or a former employee of the rights holder of a
trade secret violates Article 10 herein and infringes upon the
trade secret, the relevant supervision and inspection department
shall order the employee or former employee to cease his/her
illegal acts and impose thereon a fine of up to RMB 100,000.
A staff member of a State organ who violates Article 10 herein and
infringes upon trade secrets shall be given disciplinary sanctions
by the relevant appointment and dismissal organ or supervisory
organ pursuant to the law.
Where lawyers, CPAs and other professionals violate Article 10
herein and infringe upon trade secrets, supervision and inspection
departments shall order such professionals to cease their illegal
acts, and impose thereon a fine of up to RMB 100,000. Under grave
circumstances, relevant departments shall revoke the practicing
certificates of such professionals.
Article 25 A business operator who engages in sales by offering
prizes in violation of Article 12 herein shall be ordered by the
relevant supervision and inspection department to cease its illegal
acts, and be given a fine of not less than RMB 100,000 but not more
than RMB 500,000, or a fine of not less than RMB 500,000 but not
more than RMB three million under grave circumstances.
Article 26 A business operator who violates Article 13 herein and
damages the commercial reputation or product reputation of others
shall be ordered by the relevant supervision and inspection
department to cease its illegal acts and eliminate ill influence,
and be given a fine of not less than RMB 100,000 but not more than
RMB 500,000, or a fine of not less than RMB 500,000 but not more
than RMB three million under grave circumstances.
Article 27 A business operator who violates Article 14 herein and
interferes with the normal operations of other business operators
shall be ordered by the relevant supervision and inspection
department to cease its illegal acts, and be given a fine of not
less than RMB 100,000 but not more than RMB 500,000, or a fine of
not less than RMB 500,000 but not more than RMB three million under
grave circumstances.
Article 28 Unless otherwise prescribed by laws and administrative
regulations, a business operator who violates Article 15 herein and
engages in unfair competition shall be ordered by the relevant
supervision and inspection department to cease its illegal acts,
and be given a fine of not less than RMB 100,000 but not more than
RMB 500,000, or a fine of not less than RMB 500,000 but not more
than RMB three million under grave circumstances.
Article 29 Where a business operator is subject to administrative
punishments for engaging in unfair competition in violation of this
Law, the relevant supervision and inspection department shall
include such punishments in the credit records of the business
operator, and make public the same in accordance with relevant laws
and administrative regulations.
Article 30 A business operator who shall concurrently bear civil
compensation liabilities and pay fines due to violations of this
Law shall bear the civil compensation liabilities on a priority
basis if its assets are not sufficient to both pay compensations
and fines.
Article 31 Whoever obstructs a supervision and inspection
department from performing duties in accordance with this Law and
constitutes violations of public security administration shall be
punished by the relevant public security organ in accordance with
the Law of the People's Republic of China on Public Security
Administration Punishments.
Article 32 The parties concerned who have objections to the
decisions made by supervision and inspection departments may apply
for administrative reconsideration or bring administrative lawsuits
in accordance with the law.
Article 33 Where a supervision and inspection department and its
staff members practice favoritism for personal gains, abuse power
or neglect duties, its leaders subject to liabilities and the
personnel subject to direct liabilities shall be given disciplinary
sanctions pursuant to the law.
Article 34 Whoever violates this Law and constitutes criminal
offenses shall be investigated for criminal liabilities pursuant to
the law.
Chapter 5: Supplementary Provisions
Article 35 This Law shall come into effect on MM DD, YY.
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