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Anti Unfair Competition Law of the People's Republic
of China
CHAPTER ONE GENERAL PROVISIONS CHAPTER TWO ACTIVITIES OF UNFAIR
COMPETITION CHAPTER THREE SUPERVISION CHAPTER FOUR LEGAL RESPONSIBILITY
CHAPTER FIVE SUPPLEMENTARY ARTICLES
Chapter One General Provisions
Article 1 This law is drawn up in order to safeguard the healthy
development of the socialist market economy, encourage and protect
fair market competition, prohibit unfair competition, safeguard
the legal rights and interests of managers.
Article 2 Managers shall abide by the principle of voluntariness,
equality, impartiality, honesty and good faith, and also adhere
to public commercial moral in their business transactions.
"Unfair competition", in this Law, means activities made
by managers who damage the others' legal rights and interests, disturbe
the order of social economy and violate the provisions of this Law.
"Manager", in this Law, means the legal person, the other
economic organisations and individuals who deal with commercial
business or profitable service (commodities in this Law in hereafter
as to commodity which includes service).
Article 3 The governments in all levels shall adopt methods to prohibit
unfair competition and to create the sound environment and conditions
for fair competition.
The Bureaus of Industrial and Commercial Management of the People's
Government over the county level supervise unfair competition, except
for the supervision made by the other organisations in accordance
with the provisions of the other laws or regulations.
Article 4 The State shall encourage, support and safeguard all organisations
and individuals to carry out social supervising for unfair competition.
Officials in the State organs should not support or shield unfair
competition.
Chapter Two Activities of Unfair Competition
Article 5 Managers should not use the following unfair methods in
their business transactions which can damage other competitors:
1. to feign the others' registered trade mark;
2. to use the specific name, package, decoration of the famous or
noted commodities, or use a similar name, package, decoration of
the famous or noted commodities, which may confuse consumers distinguishing
the commodities to the famous or noted commodities;
3. to use the name of other enterprise or personal name and make
people confuse this commodity to the other's commodity;
4. to feign or pretend to be the certificate of attestation, mark
of fame and high qualification, to feign the certificate of originally
produced place of the commodities, which make others to misunderstand
the qualification of the commodities because of the false certificates.
Article 6 Public facility enterprises or the other enterprises which
legally monopolized the special market in accordance with law shall
not force the others to purchase the commodities pointed by the
enterprises or prohibit the competition from the other companies.
Article 7 The government and its organ shall not abuse its authority
to force the others to purchase the commodities from the pointed
seller or prohibit the fair competition from the others. The government
and its organ shall not abuse its authority to prohibit outside
commodities from going into home market, or prohibit domestic commodities
from going to outside market.
Article 8 Managers shall not use money or properties or the other
methods to bribe to others in order to sell or purchase commodities.
It shall be guilty of giving bribe if managers give a secret commission
to the other organisations or individuals without the normal accounting
records. It shall be guilty of taking bribe, if the organisations
or individuals accept the secret discount without normal accounting
records.
Managers may offer a discount to the others in public, or may pay
commission to the middle man in selling or purchasing commodities.
However, managers who give discount to the others or pay commission
to the middle man, or the others who take the discount or commission
shall make accounting strictly according to the facts.
Article 9 Managers shall not use advertisement or the other methods
to make a false propaganda for the quality, composition, function,
usage, producer, time of efficacy and place of production of commodities.
Advertising company shall not be an agent of, or design, or make,
or propagandize false advertisement, if it know or should know the
truth.
Article 10 Managers shall not use the following methods to infringe
upon business secrecy:
1. to steal, coerce, or use any other unfair method to obtain the
other's business secrets;
2. to disclose, use or permit others to use the business secrets
mentioned in Section 1 of this Article.
3. to violate the contract or the requirement to publish, use or
permit others to use the business secrets, which were maintained
as secrets by the legal owner of the business secrecy.
The third party who knows or should know the illegal activities
as first mentioned, and who gains, uses or publishes the business
secrecy shall be looked as activities of infringing upon the others'
business secrecy.
"Business secrecy", in this Article, means the utilized
technical information and business information which is unknown
by the public, which may create business interests or profit for
its legal owners, and also is maintained secrecy by its legal owners.
Article 11 Manager shall not sell commodity at the price lower than
the commodity's cost in order to put the other competitors out of
the competition.
Any of the following activities shall not be looked as unfair competition:
1. to sell fresh or live commodities;
2. to quickly sell commodities before their expiration or the other
overstock commodities;
3. to cut prices or on sale in season;
4. to cut prices to sell commodity for cleaning debts, changing
or suspending business.
Article 12 Manager shall not sell commodity attached with unreasonable
condition or force the consumers to unwillingly purchase any additional
commodity that come together with the product that the consumer
buys.
Article 13 Manager shall not sell commodity with lottery ticket
such as the following activities:
1. to sell commodity by the way of making fake award or arranging
inside person to win the lottery;
2. to sell unqualified or high prices commodity by the way of awarding
selling;
3. to sell commodity with lottery award which the top award is more
than 5000 RMB yuan.
Article 14 Manager shall not fabricate, spread false facts to damage
the business reputation or commodity fame of the other competitor.
Article 15 Bidder shall not act in collusion for bidding, not raise
or reduce the price for bidding.
Bidder shall not collude with the company that is offering to bid
in order to put the other bidders out of the competition.
Chapter Three Supervision
Article 16 The supervising authority over the county's administration
may carry out the supervision to activities of unfair competition.
Article 17 The supervising authorities has following powers in the
supervision:
1. Require manager, connected person, testified person in due process
and require them to supply testified material or the other documents
with regarding to activities of unfair competition.
2. Require, copy agreements, accounting books, vouchers, documents,
records, business fax or letters and the other materials with regarding
to the activities of unfair competition;
3. Check commodities or properties with regarding to the activities
of unfair competition under the provision of the Article 5 of this
Law, and also if necessary, require manager to explain the originated
source and sum of the commodities, to suspend selling, to wait for
checking, prohibit to move, hide or eliminate the commodities or
the properties.
Article 18 Supervisor shall show the certificate of supervision
when he carries out the supervision to activities of unfair competition.
Article 19 Under the supervision of the activities of unfair competition,
manager, connected person and testified person shall supply the
related materials or information strictly according to the facts.
Chapter Four Legal Responsibility
Article 20 Manager shall bear the responsibility for compensating
to the damage made by damager to the damaged party under the violation
of the provision of this Law. Amount of the compensation shall be
equivalent to the profit made by the damager during its damaging,
if it is difficult to measure the amount of damage; And it also
shall compensate the reasonable cost to the damaged party who has
paid the cost to investigate the activities of unfair competition
made by damager.
The damaged party may bring law suit to the People's Court when
its legal interests and rights are damaged.
Article 21 Manager shall be punished in accordance with the Law
of Trade Mark of the People's Republic of China and the Law of Supervision
on Product Qualification of the People's Republic of China, if he
imitates the other's registered trade mark, uses the other enterprise's
name or personal name without permitting, forges or fake the mark
of certificate, the mark of famous or high quality products, fake
the original produce place, make a fake or misunderstanding description
for quality of the products.
The supervisor shall order to stop the illegal activities, confiscate
the illegal income, and also fine amount from one to three times
of the illegal income; may revoked the business licence as the facts
is serious, if the manager uses the special name, package, decoration
of the famous or noted commodities or uses the similar name, package,
decoration to that of the famous or noted commodities and make the
commodities confusing to the famous or noted commodities. If manager
sells false or bad commodities and violates the Criminal Law, he
shall be investigated in accordance with the Criminal Law.
Article 22 Manager bribe by giving money or properties or using
any other method in order to sell or purchase the commodities and
violate the Criminal Law, shall be investigated in accordance with
the Criminal Law; if the acts as first mentioned do not violate
the Criminal Law, the supervisor may fine an amount from more than
10, 000 to less than 200,000 RMB yuan in according to the facts,and
confiscate the illegal income.
Article 23 Manager of public facility enterprise or the other enterprises
with a legal monopoly position force others to purchase the commodities
which the manager manages, or put the other managers out of competition,
the supervisor in the provincial or city with directions administration
shall order to stop illegal activities, and may fine amount from
more than 50,000 to less than 200,000 RMB yuan in accordance with
the facts.
The supervisor may confiscate illegal income, and may fine amount
from one to three times of illegal income, if the pointed manager
take an advance to sell the unqualified and high price commodities
or abuse of power to charge unreasonable fee.
Article 24 The supervisor shall order to stop the illegal activities,
clear up the bad influence, may fine amount from more than 10,000
to less than 200,000 RMB yuan in accordance with the fact, if the
manager uses advertisement or the other method to make a fake or
misunderstanding description for its commodities.
Supervisor shall order to stop the illegal activities, confiscate
illegal income and fine in accordance with the law, if the manager
in advertisement agent, design, make or publish a fake advertisement
as it knows the true situation.
Article 25 Supervisor shall order to stop the illegal activities,
may fine amount from more than 10,000 to less than 200,000 RMB yuan,
if manager violates the Article 10 to infringe upon the business
secrecy.
Article 26 Supervisor shall order to stop illegal activities, and
may fine amount from more than 10,000 to less than 100,000 RMB yuan,
if manager violate the Article 13 in regarding to sell with lottery.
Article 27 If bidders act in collusion, raise or reduce the price
of the bid; and bidder and invite tender ganged up in order to put
the others out of the fair competition, its bid shall be invalid
and the supervisor may fine amount from more than 10,000 to less
than200, 000 RMB yuan in accordance with the facts.
Article 28 If the manager violate this Law regarding to the order
to stop selling, moving, hiding, eliminating the commodities related
to unfair competition, the supervisor may fine amount from more
than one to less than three times of price of commodities regarding
to selling, moving, hiding or eliminating as first mentioned.
Article 29 If the party refuses to accept the fine decisionmade
by supervisor may apply the senior supervisor to reexamine the case
within 15 days from the date when the fine decision was received;
If the party who refuses to accept the decision of reexamine made
by the senior supervisor may bring a law suit to the People's Court
within 15 days after the reexamined decision received; or the party
may bring a law suit to the People's Court directly.
Article 30 If the government or its departments violate Article
7 of this Law to force the others to purchase the commodities from
the pointed manager, limit the others make a fair competition, or
limit commodities to transfer between regions, the senior government
shall order to correct these mistakes; If the fact is serious, the
same level government organ or the senior government organ shall
administratively punish the person who bear the direct responsibility.
The pointed manager take advance to sell commodities with unqualified
and high price, the supervisor shall confiscate the illegal income,
and may fine amount from more than one to less than three times
of illegal income.
Article 31 Official of the supervisor of unfair competition who
abuse of power, negligence, commit on criminal guilty shall be punished
by the Criminal Law; If not guilty, it shall be punished in accordance
with administrative regulations.
Article 32 Official of the supervisor for unfair competition shall
be punished by the Criminal Law, if he is fraudulent, or illegally
shields the manager from the legal punishment eventhough he knows
he fact of the manager's crime.
Chapter Five Supplementary Articles
Article 33 This law shall become effective on December 1,1993.
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