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(Adopted
at the Third Meeting of the Standing Committee of the Eighth National
People's Congress on September 2, 1993, Promulgated by Order No.
10 of the President of the People's Republic of China, and effective
as of December 1, 1993)
Chapter
I General Provisions
Article
1 This Law is formulated with a view to safeguarding the healthy
development of socialist market economy, encouraging and protecting
fair competition, repressing unfair competition acts, and protecting
the lawful rights and interests of business operators and consumers.
Article
2 A business operator shall, in his market transactions, follow
the principles of voluntariness, equality, fairness, honesty and
credibility and observe the generally recognized business ethics.
Unfair
competition as mentioned in this Law refers to a business operators
acts violating the provisions of this Law, infringing upon the lawful
rights and interests of another business operator and disturbing
the socio-economic order.
A
business operator as mentioned in this Law refers to a legal person
or any other economic organization or individual engaged in commodities
marketing or profit-making services commodities referred to hereinafter
includes such services).
Article
3 People's governments at various levels shall take measures to
repress unfair competition acts and create favourable environment
and conditions for fair competition.
Administrative
departments for industry and commerce of the people's governments
at or above the county level shall exercise supervision over and
inspection of unfair competition acts; where laws or administrative
rules and regulations provide that other departments shall exercise
the supervision and inspection, those provisions shall apply.
Article
4 The State shall encourage, support and protect all organizations
and individuals in the exercise of social supervision over unfair
competition acts.
No
State functionary may support or cover up unfair competition acts.
Chapter
II Acts of Unfair Competition
Article
5 A business operator shall not harm his competitors in market transactions
by resorting to any of the following unfair means:
(1)
counterfeiting a registered trademark of another person;
(2)
using for a commodity without authorization a unique name, package,
or decoration of anothers famous commodity, or using a name, package
or decoration similar to that of anothers famous commodity, thereby
confusing the commodity with that famous commodity and leading the
purchasers to mistake the former for the latter;
(3)
using without authorization the name of another enterprise or person,
thereby leading people to mistake their commodities for those of
the said enterprise or person; or
(4)
forging or counterfeiting authentication marks, famous-and-excellent-product
marks or other product quality marks on their commodities, forging
the origin of their products or making false and misleading indications
as to the quality of their commodities.
Article
6 A public utility enterprise or any other business operator occupying
monopoly status according to law shall not restrict people to purchasing
commodities from the business operators designated by him, thereby
precluding other business operators from fair competition.
Article
7 Governments and their subordinate departments shall not abuse
administrative powers to restrict people to purchasing commodities
from the business operators designated by them and impose limitations
on the rightful operation activities of other business operators.
Governments
and their subordinate departments shall not abuse administrative
powers to restrict commodities originated in other places from entering
the local markets or the local commodities from flowing into markets
of other places.
Article
8 A business operator shall not resort to bribery, by offering money
or goods or by any other means, in selling or purchasing commodities.
A business operator who offers off-the-book rebate in secret to
the other party, a unit or an individual, shall be deemed and punished
as offering bribes; and any unit or individual that accepts off-the-book
rebate in secret shall be deemed and punished as taking bribes.
A
business operator may, in selling or purchasing commodities, expressly
allow a discount to the other party and pay a commission to the
middleman. The business operator who gives discount to the other
party and pays commission to the middleman must truthfully enter
them in the account. The business operator who accepts the discount
or the commission must also truthfully enter it in the account.
Article
9 A business operator may not, by advertisement or any other means,
make false or misleading publicity of their commodities as to their
quality, ingredients, functions, usage, producers, duration of validity
or origin.
An
advertisement agent may not act as agent for, or design, produce
or release, a false advertisement while he clearly knows or ought
to know its falsehood.
Article
10 A business operator shall not use any of the following means
to infringe upon business secrets:
(1)
obtaining an obligees business secrets by stealing, luring, intimidation
or any other unfair means;
(2)
disclosing, using or allowing another person to use the business
secrets obtained from the obligee by the means mentiond in the preceding
paragraph; or
(3)
in violation of the agreement or against the obligees demand for
keeping business secrets, disclosing, using or allowing another
person to use the business secrets he possesses.
Obtaining,
using or disclosing anothers business secrets by a third party who
clearly knows or ought to know that the case falls under the unlawful
acts listed in the preceding paragraph shall be deemed as infringement
upon business secrets.
Business
secrets as mentioned in this Article refers to any technology information
or business operation information which is unknown to the public,
can bring about economic benefits to the obligee, has practical
utility and about which the obligee has adopted secret-keeping measures.
Article
11 A business operator shall not, for the purpose of pushing out
their competitors, sell their commodities at prices lower than costs.
Any
of the following shall not be deemed as an unfair competition act:
(1)
selling perishables or live commodities;
(2)
disposing of commodities near expiration of their validity duration
or those kept too long in stock;
(3)
seasonal sales; or
(4)
selling commodities at a reduced price for the purpose of clearing
off debts, change of business or suspension of operation.
Article
12 A business operator may not, against the will of purchasers,
conduct tie-in sale of commodities or attach any other unreasonable
conditions to the sale of their commodities.
Article
13 A business operator shall not engage in any of the following
lottery-attached sale activities:
(1)
lottery-attached sale conducted by such deceptive means as falsely
declaring to have prize or intentionally making a designated insider
win the prize;
(2)
lottery-attached sale employed as a means to sell goods of low quality
at a high price; or
(3)
lottery-attached sale in form of lottery-drawing with the highest
prize exceeding 5 000 Yuan.
Article
14 A business operator shall not fabricate or spread false information
to injure his competitors commercial credit or the reputation of
his competitors commodities.
Article
15 Bidders shall not act in collusion with each other so as to force
up or down the bidding prices.
Bidders
and tender-inviters shall not collude with each other so as to push
out their competitors from fair competition.
Chapter
III Supervision and Inspection
Article
16 Supervision and inspection departments at or above the county
level may carry out supervision over and inspection of unfair competition
acts.
Article
17 Supervision and inspection departments shall, in supervising
and inspecting unfair competition acts, have the right to exercise
the following functions and powers:
(1)
to interrogate the business operators under inspection, interested
persons, or witnesses in accordance with the prescribed procedures,
and require them to provide testimonial materials or other materials
relating to the unfair competition acts;
(2)
to inquire about and duplicate the agreements, account books, invoices,
documents, records, business letters and telegrammes or other materials
relating to the unfair competition acts; and
(3)
to inspect the property involved in the unfair competition acts
under Article 5 of this Law; and, when necessary, to order the business
operators under inspection to explain the source and quantity of
the commodities, suspend the sale and await the inspection thereof,
and the property involved shall not be transferred, concealed or
destroyed.
Article
18 Functionaries of supervision and inspection departments shall,
when supervising and inspecting unfair competition acts, produce
their inspection certificates.
Article
19 Business operators under inspection, interested persons and witnesses
shall truthfully provide relevant materials or particulars when
the supervision and inspection departments supervise and inspect
unfair competition acts.
Chapter
IV Legal Responsibility
Article
20 A business operator who violates the provisions of this Law and
thus causes damage to the infringed business operators, shall bear
the liability of compensation for the damage. If the losses of the
infringed business operator are difficult to estimate, the damages
shall be the profits derived from the infringement by the infringer
during the period of infringement. And the infringer shall also
bear the reasonable expense paid by the infringed business operator
for investigating the infringers unfair competition acts violating
his lawful rights and interests.
A
business operator whose lawful rights and interests are infringed
upon by unfair competition acts may bring a suit in a peoples court.
Article
21 A business operator who counterfeits anothers registered trademark,
uses without authorization the name of another enterprise or person,
forges or counterfeits authentication marks, famous-and-excellent-product
marks or other product quality marks, forges origin of the products
or makes false and misleading indications regarding the product
quality shall be punished in accordance with the provisions of the
Trademark Law of the People's Republic of China and the Law of the
People's Republic of China on Product Quality.
In
case a business operator uses for a commodity without authorization
the name, package or decoration of a famous commodity or the name,
package or decoration similar to that of a famous commodity and
thereby confuses the commodity with another's famous commodity and
leads the purchasers to mistake the former for the latter, the supervision
and inspection department shall order the business operator to stop
the illegal act and confiscate the illegal earnings and may, in
light of the circumstances, impose a fine of not less than one time
but not more than three times the illegal earnings; if the circumstances
are serious, his business licence may be revoked; and if the commodities
sold are fake and inferior, and the case constitutes a crime, he
shall be investigated for criminal responsibility according to law.
Article
22 A business operator, who resorts to bribery by offering money
or goods or by any other means in selling or purchasing commodities
and if the case constitutes a crime, shall be investigated for criminal
responsibity according to law; if the case does not constitute a
crime, the supervision and inspection department may impose a fine
of not less than 10 000 Yuan but not more than 200 000 Yuan in light
of the circumstances and confiscate the illegal earnings, if any.
Article
23 In case a public utility enterprise or any other business operator
occupying monopoly status according to law restricts people to purchasing
commodities from a designated business operator in order to push
out other business operators from fair competition, the supervision
and inspection departments at the provincial level or of cities
divided into districts shall order the ceasing of the illegal acts
and may impose a fine of not less than 50 000 Yuan but not more
than 200 000 Yuan in light of the circumstances. If such designated
business operator takes advantage of his monopoly status to sell
goods of low quality at high prices or indiscriminately collects
fees, the inspection and supervision department shall confiscate
the illegal earnings and may impose a fine of not less than one
time but not more than three times the illegal earnings in light
of the circumstances.
Article
24 In case a business operator makes false and misleading publicity
of his commodities by advertisement or any other means, the supervision
and inspection department shall order the said business operator
to stop his illegal acts and eliminate the bad effects, and may
impose a fine of not less than 10 000 Yuan but not more than 200
000 Yuan in light of the circumstances.
In
case an advertistement agent acts as agent for, or designs, produces
or releases, a false advertisement though the agent clearly knows
or ought to know the falsehood, the supervision and inspection department
shall order the ceasing of the illegal acts, confiscate the illegal
earnings, and impose a fine according to law.
Article
25 In case a business operator violates the provisions of Article
10 of this Law and infringes upon trade secrets, the supervision
and inspection department shall order the ceasing of the illegal
acts and may impose a fine of not less than 10 000 Yuan but not
more than 200 000 Yuan in light of the circumstances.
Article
26 In case a business operator engages in lottery-attached sale
in violation of the provisions of Article 13 of this Law, the supervision
and inspection department shall order the ceasing of the illegal
acts and may impose a fine of not less than 10 000 Yuan but not
more than 100 000 Yuan in light of the circumstances.
Article
27 Where bidders act in collusion with each other to force up or
down the bidding price, or a bidder colludes with a tender-inviter
for the purpose of pushing out their competitors, the successful
bid shall be invalid, and the supervision and inspection department
may impose a fine of not less than 10 000 Yuan but not more than
200 000 Yuan in light of the circumstances.
Article
28 In case a business operator acts in violation of the order of
stopping the sale or forbidding the transfer, concealment or destruction
of the property involved in the unfair competition acts, the supervision
and inspection department may impose a fine of not less than one
time but not more than three times the price of the property sold,
transferred, concealed or destroyed.
Article
29 In case a party is not satisfied with the punishment decision
made by the supervision and inspection department, it may apply
for reconsideration to the competent department at the next higher
level within 15 days from receipt of the decision; and if the party
is still not satisfied with the reconsideration decision, it may
bring a suit in a people's court within 15 days from receipt of
the decision; and the party may also directly file a suit in a people's
court.
Article
30 Where a government or its subordinate departments, in violation
of the provisions of Article 7 of this Law, restrict people to purchasing
commodities from a designated business operator or impose limits
on other business operator's rightful operation activities or the
normal circulation of commodities between different areas, the supervision
and inspection department at higher levels shall order them to make
corrections; and if the circumstances are serious, the persons held
directly responsible shall be given administrative sanctions by
the relevant department at the same or higher levels; if the designated
business operator takes advantage of his status to sell goods of
low quality at high prices or indiscriminately collects fees, the
supervision and inspection department shall confiscate the illegal
earnings and may impose a fine of not less than one time but not
more than three times the illegal earnings in light of the circumstances.
Article
31 Where a State functionary engaged in supervision over and inspection
of unfair competition acts abuses his power or neglects his duty,
and if the case constitutes a crime, he shall be investigated for
criminal responsibility according to law; if the case does not constitute
a crime, he shall be given an administrative sanction.
Article
32 Where a State functionary engaged in supervision over and inspection
of unfair competition acts practices favouritism or irregularities
and intentionally harbours a business operator whom he clearly knows
to be guilty of a crime committed by violating the provisions of
this Law and attempts to shield him from prosecution, he shall be
investigated for criminal responsibility according to law.
Chapter
V Supplementary Provisions
Article
33 This Law shall enter into force as of December 1, 1993.
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