Chapter 1 General Provisions

Chapter 1 General Provisions

Article 1 This Law is enacted to promote the healthy development of socialist market economy, encourage and protect fair competition, prevent unfair competition, and protect the legitimate rights and interests of business operators and consumers.

Article 2 Business operators shall follow the principles of voluntariness, equality, fairness and good faith, abide by laws and business ethics in carrying out production and business activities.   
 
Unfair competition prescribed in this law refers to the conduct of business operators in their production and business activities, in violation of the provisions hereof, to disrupt the competition order in the market and damage the legitimate rights and interests of other business operators or consumers.
 
Business operators prescribed in this law refer to natural person, legal person and other unincorporated organization engaged in the manufacturing or trading of commodities or providing services (hereinafter commodities include services).

Article 3 People's governments at various levels shall take measures to prevent unfair competition and create a favorable environment and conditions for fair competition.   
 
The State Council shall establish a work coordination mechanism against unfair competition, study and decide on major policies against unfair competition, and coordinate and handle major issues to maintain the market competition order.

Article 4 The department with the responsibility of administration for industry and commerce under people's government at or above the county level shall investigate and penalize the unfair competition conduct. If the said conduct should be investigated and penalized by other departments based on laws or administrative regulations, such provisions will prevail.

Article 5 The State encourages, supports and protects all organizations and individuals exercising social supervision over the unfair competition conduct.
 
State Authorities and their staff members shall not support, cover up unfair competition conduct.
 
Industry organizations shall strengthen self-discipline in the industry, guide and urge their members to competition according to law, and maintain the market competition order.

Chapter II Unfair competition Conduct

Chapter II Unfair competition Conduct

Article 6 A business operator shall not perform any of the following confusing conducts which may lead people to misunderstand its products with other business operator's products or to believe there is certain relation with other person.
  
1)        unauthorized use of a mark that is identical with or similar to the name, packaging, decoration of other person's commodity, which has  certain influence;
 
2)        unauthorized use of another business operator's corporate name (including its shortened name, trade name, etc.), the name of a social organization (including its shortened name, etc.), the name of an individual (including pen name, stage name, translated name, etc.), which has certain influence;
 
3)        unauthorized use of other person's main part of domain name, website name or webpage, which has certain influence;
 
4)        other conducts that are sufficient to misunderstand its products with other business operator's products or to believe there is certain relation with other person.

Article 7 Business operators shall not bribe the following entities or individuals by offering money or by any other means in order to seek a transaction opportunity or competitive advantage:   
1)        employees of the counterparty;
2)        entity or individual entrusted by the counterparty to handle relevant affairs;
3)        entity or individual that take advantage of powers or influence to impact a transaction.
 
Business operators may expressly give a discount to the counterparty or pay a commission to the middleman of a transaction in transactions. Business operators shall truthfully enter the discount or commission in the accounts if they give a discount to the counterparty or pay a commission to the middleman. While the business operators who accept such discount or commission shall also enter the discount or commission in the accounts.
 
The bribery committed by employees of a business operator shall be deemed as the act of the business operator, unless otherwise proven by the business operator with evidence that the act of employees is not relevant to efforts of seeking a transaction opportunity or competitive advantage for the business operator.

Article 8 Business operators shall not provide commercial promotions for the performance, functions, quality, sales status, users' comments, honors received etc. in respect of their products in a false or misleading manner, attempting to cheat or mislead consumers.  
 
A business operator shall not help other business operators to provide commercial promotions in a false or misleading manner by organizing false transactions, etc.

Article 9 Business operators shall not engage in any of the following infringements upon trade secrets.   
 
1)        obtain an obligee's trade secrets by theft, bribery, fraud, intimidation, or other improper means;
2)        disclose, use, or allow others to use an obligee's trade secrets obtained by the aforesaid means;
3)        disclose, use or allow others to use trade secrets in breach of agreement or the obligee's requirements on keeping such trade secrets confidential;
 
Where a third party knows or should know that the obligee's employee or former employee or any other entity or individual engages in any of the illegal acts, but still obtains, discloses, uses or allows others to use such trade secret, such practice shall be deemed as infringement upon the trade secret.
 
For the purpose of this Law, trade secret refers to technical information or operational information, which is not known to the public, has commercial value, and for which the obligee has adopted corresponding measures for confidentiality.

Article 9 Business operators shall not engage in any of the following infringements upon trade secrets.   
 
1) obtain an obligee's trade secrets by theft, bribery, fraud, intimidation, electronical hacking or other improper means;
2) disclose, use, or allow others to use an obligee's trade secrets obtained by the aforesaid means;
3) disclose, use or allow others to use trade secrets in breach of an obligation of confidentiality or the obligee's requirements on keeping such trade secrets confidential;
4) instigate, induce, assist others to others to breach an obligation of confidentiality or the obligee's requirements on keeping such trade secrets confidential, obtain, disclose, use or allow the others to use an obligee's trade secrets.
 
Other than a business operator, any natural person or legal person or other unincorporated organization engages in any of the illegal acts specified in the preceding paragraph. Such act shall be deemed as infringement upon the trade secret.
 
Where a third party knows or should know that the obligee's employee or former employee or any other entity or individual engages in any of the illegal acts specified in the Paragraph 1 of this Article, but still obtains, discloses, uses or allows others to use such trade secret, such practice shall be deemed as infringement upon the trade secret.
 
For the purpose of this Law, trade secret refers to the business information, such as any technical information or operational information, etc., which is not known to the public, has commercial value, and for which the obligee has adopted corresponding measures for confidentiality.

Article 10 Business operators shall not carry out any of the following prize sale activities:   
1)        without expressly specifying the prize type, terms for claiming prizes, the amounts of prize or other related information of prize sale, etc. that may affect claiming prizes;
2)        prize sale activities in a fraudulent manner by falsely claiming the existence of prizes or intentionally having internally-chosen persons to win the prizes;
3)        prize sale activities in the form of a lucky draw with the amount of the highest prize exceeding 50, 000 yuan.

Article 11 Business operators shall not fabricate or disseminate any false or misleading information to damage the credit standing or the reputation of commodities of competitors.

Article 12 Business operators that engage in production and business activities by using the network shall abide by all the provisions of this law. Business operators shall not engage in any of the following activities that impede, disrupt the normal operation of online products or services legally provided by other business operators by using technical means to influence users' choices or other means.
 
1)        inserting a link into an online product or service legally provided by other business operators to compel a destination jump without the approval of such business operators;
2)        misleading, deceiving or compelling users into modifying, closing,  uninstalling an online product or service legally provided by other business operators;
3)        implementing in bad faith an incompatibility with an online product or service legally provided by other business operators;
4)        other activities that impede, disrupt the normal operation of online products or services legally provided by other business operators.

Chapter III Investigations into Suspected Unfair Competition

Chapter III Investigations into Suspected Unfair Competition

Article 13 The supervision and inspection authorities may take the following measures to investigate into any suspected unfair competition conduct:  
1)        entering the business premise involved in the suspected unfair competition conduct for inspection;
2)        inquiring the business operator under investigation, interested party, and other related entity, individual, requesting them to explain relevant situations or provide other materials in relation to the investigated conduct;
3)        checking, copying the agreements, account books, vouchers, documents, records, business correspondence and other materials relating to the suspected unfair competition conduct;
4)        sealing up, detaining the property involved in the suspected unfair competition conduct;
5)        checking the bank account of the business operator that is suspected of the unfair competition conduct.
 
Before any measure specified in the preceding paragraph is adopted, a written report shall be submitted to the principal of the supervision and inspection authority concerned for approval. For the measure specified in Item 4 or 5 of the preceding paragraph to be adopted, a written report shall be submitted to the principal of the supervision and inspection authorities under the people's government above the city level divided into districts for approval.
 
The supervision and inspection authorities shall abide by the Administrative Compulsory Enforcement Law of the People's Republic of China and other laws and administrative regulations while investigating suspected unfair competition conduct, and timely publish the investigation and punishment results to the public.

Article 14 The business operators, interested parties and other related entities, individuals under investigation,, shall truthfully provide the relevant materials or information while the supervision and inspection authorities investigate suspected unfair competition conduct.

Article 15 The supervision and inspection authorities and their staff members are obliged to keep confidential trade secrets obtained during investigation.

Article 16 Any entity and individual shall have the right to report to the supervision and inspection authorities against suspected unfair competition conduct. The supervision and inspection authorities shall timely handle such report according to the law upon receipt.  
 
The supervision and inspection authorities shall publish to the public the phone number, mailing address or email address for report and keep confidential for the whistleblower. For a real-name whistleblower who has provided related facts and evidence, the supervision and inspection authorities shall inform whistleblower of the handling results.

Chapter IV Legal Liability

Chapter IV Legal Liability

Article 17 Business operators that violate this Law and causes damage to others shall bear civil liability.  
 
A business operator whose lawful rights and interests are infringed upon by unfair competition conduct may file a lawsuit with a people's court.
 
The amount of damage caused by any unfair competition to a business operator shall be determined depending on the actual losses suffered by such operator as a result of the infringement. If it is difficult to calculate the actual losses, such amount shall be determined based on the benefits obtained by the infringer from the infringement. The amount of damage shall also include the reasonable expenses paid by the business operator to stop the infringement.
 
Where a business operator violates the provisions stipulated in Article 6 or Article 9, and it is difficult to determine the actual losses suffered by the obligee as a result of the infringement or the benefits obtained by the infringer from the infringement, the people's court shall decide the damage not more than 3 million yuan to the obligee, depending on the circumstance of the infringement.

Article 17 Business operators that violate this Law and causes damage to others shall bear civil liability.  
 
A business operator whose lawful rights and interests are infringed upon by unfair competition conduct may file a lawsuit with a people's court.
 
The amount of damage caused by any unfair competition to a business operator shall be determined depending on the actual losses suffered by such operator as a result of the infringement. If it is difficult to calculate the actual losses, such amount shall be determined based on the benefits obtained by the infringer from the infringement. Where the operator maliciously carries out the act of infringing trade secrets and the circumstances are serious, the amount of damage may be determined within 1 to 5 times of the amount determined according to the above mentioned ways. The amount of damage shall also include the reasonable expenses paid by the business operator to stop the infringement.
 
Where a business operator violates the provisions stipulated in Article 6 or Article 9, and it is difficult to determine the actual losses suffered by the obligee as a result of the infringement or the benefits obtained by the infringer from the infringement, the people's court shall decide the damage not more than 5 million yuan to the obligee, depending on the circumstance of the infringement.

Article 18 Where a business operator engages in confusing activities in violation of Article 6, the supervision and inspection authorities shall order it to cease the illegal acts, confiscate the illegal commodities, and impose a fine up to five times the illegal turnover if the illegal turnover exceeds 50, 000 yuan or a fine up to 250, 000 yuan if there is no illegal turnover or the illegal turnover is less than 50, 000 yuan. If the circumstance is serious, the business license shall be revoked.  
 
Where the corporate name registered by a business operator is in violation of the provisions of Article 6, the business operator shall timely change the corporate name. Before such change, the original corporate registration authorities shall use the unified social credit code in lieu of its corporate name.

Article 19 Where business operators bribes other party in violation of Article 7, the supervision and inspection authorities shall confiscate the illegal gains and impose a fine from 100,000 yuan to 3 million yuan. If the circumstance is serious, the business license shall be revoked.

Article 20 Where a business operator provides commercial promotions for its commodities in a false or misleading manner, or helps any other business operator provide commercial promotions in a false or misleading manner by organizing false transactions, etc. which is in violation of the provisions of Article 8, the supervision and inspection authorities shall order it to cease the illegal act and impose a fine from   200, 000 yuan to 1 million yuan.  If the circumstance is serious, the business operator shall be fined from 1 million yuan to 2 million yuan, and the business license could be revoked.  
 
Where a business operator violates Article 8, constituting the releasing of false advertisements, it shall be penalized according to the Advertising Law of the People's Republic of China.

Article 21 Where a business operator infringes upon any trade secret in violation of Article 9, the supervision and inspection authorities shall order it to cease the illegal act and impose a fine ranging from 100, 000 yuan to 500, 000 yuan. In serious cases, the fine shall be above 500, 000 yuan but not more than 3 million yuan.

Article 21 Where a business operator and other natural person or legal person or other unincorporated organization infringes upon any trade secret in violation of Article 9, the supervision and inspection authorities shall order it to cease the illegal act, confiscate its illegal gains, and impose a fine ranging from 100, 000 yuan to 1,000, 000 yuan. In serious cases, the fine shall be above 500, 000 yuan but not more than 5 million yuan.

Article 22 Where a business operator makes a prize sale in violation of Article 10, the supervision and inspection authorities shall order it to cease the illegal act and impose a fine from    50, 000 yuan to 500, 000 yuan.

Article 23 Where a business operator damages the credit standing of its competitors or the reputation of its competitors ' commodities, which is in violation of Article 11, the supervision and inspection authorities shall order it to cease the illegal act and eliminate effects and impose a fine from 100, 000 yuan to 500, 000 yuan. In serious cases, the fine shall be above 500, 000 yuan but not more than 3 million yuan.

Article 24 Where a business operator impedes or disrupts the normal operation of online products or services legally provided by other business operators, which is in violation of Article 12, the supervision and inspection authorities shall order it to cease the illegal act and impose a fine from 100, 000 yuan to 500, 000 yuan. In serious cases, the fine shall be above 500, 000 yuan but not more than 3 million yuan.

Article 25 Where a business operator who has conducted unfair competition in violation of the provisions takes the initiative to eliminate or relieve the harmful consequences of its illegal act, it shall be given a lighter or mitigated administrative penalty according to law, and may not be subject to an administrative penalty if the illegal act is considered a minor violation and is corrected in a timely manner, without causing harmful consequences.

Article 26 Where a business operator is subject to the administrative penalty for conducting unfair competition in violation of this Law, the supervision and inspection authorities shall enter such penalty into the credit records and publish to the public in accordance with the relevant laws, administrative regulations.

Article 27 Where a business operator should bear civil liability, administrative liability and criminal liability in violation of the provisions, but its property is not sufficient. The civil liability shall take precedence.

Article 28 For anyone who impedes the supervision and inspection authorities to perform their duties according to this Law, refuses or prevents the investigation, the supervision and inspection authorities shall order it to make correction, and impose a fine up to 5, 000 yuan against an individual, or a fine up to 50, 000 yuan against an entity, and the public security authorities may impose a public security penalty according to the law.

Article 29 The party concerned dissatisfied with the decision made by the supervision and inspection authorities may apply for administrative reconsideration or file an administrative lawsuit.

Article 30 Any staff member of supervision and inspection authorities who abuses the power, neglects duties, plays favoritism or disclose trade secrets obtained during investigations shall be subject to punishment in accordance with the law.

Article 31 Any violation of this Law which constitutes crime shall be investigated for criminal liability.

Article 32 In the civil proceeding of infringement upon the trade secret, the obligee of the trade secret has provided the preliminary evidence that the oblige has taken confidentiality measures for its trade secret, and has reasonably prove the trade secret has been infringed, the suspected infringer should prove the trade secret the obligee claims does not belong to the trade secret prescribed in this law.  
 
The obligee of the trade secret provides the preliminary evidence that the trade secret has been infringed and also provides one of the following evidences. The suspected infringer should prove it does not have any act of trade secret infringement.
1)  There is evidence to certify that the suspected infringer has access to or has chance to obtain trade secret and that the information used is essentially identical with the trade secret;
2)   There is evidence to prove that the trade secret has been disclosed, used or the risk of being disclosed, used by the suspected infringer;
3)   There is other evidence to prove that the trade secret has been infringed by the suspected infringer.

Chapter V Supplementary Provisions

Chapter V Supplementary Provisions

Article 32 This Law shall be implemented as of 1 January 2018.