Anti-Unfair Competition Law of the PRC — Full English Translation (2019 Amendment)

Adopted at the Third Session of the Standing Committee of the Eighth National People’s Congress on September 2, 1993

Amended in accordance with the Decision on Amending the Anti-Unfair Competition Law of the People’s Republic of China adopted at the 30th Session of the Standing Committee of the 12th National People’s Congress on November 4, 2017

Further amended in accordance with the Decision on Amending the Anti-Unfair Competition Law of the People’s Republic of China adopted at the 10th Session of the Standing Committee of the 13th National People’s Congress on April 23, 2019

Table of Contents

Chapter I — General Provisions

Article 1 — This Law is enacted for the purposes of promoting the sound development of the socialist market economy, encouraging and protecting fair competition, preventing acts of unfair competition, and safeguarding the lawful rights and interests of business operators and consumers.

Article 2 — Business operators shall, in the course of production and business operations, adhere to the principles of voluntariness, equality, fairness and good faith, and shall abide by the law and business ethics. For the purposes of this Law, an “act of unfair competition” means an act of a business operator in the course of production or business operations that disrupts the order of market competition, thereby causing harm to the lawful rights and interests of other business operators or consumers. For the purposes of this Law, a “business operator” means a natural person, legal person or unincorporated organization engaged in the production or business operation of commodities or the provision of services (hereinafter referred to as “commodities,” which includes services).

Article 3 — The people’s governments at all levels shall take measures to prevent acts of unfair competition and create an environment and conditions favorable to fair competition. The State Council shall establish a coordination mechanism for anti-unfair competition work, to study and decide on major policies for anti-unfair competition and coordinate and handle major issues relating to the maintenance of the market order of competition.

Article 4 — The departments performing the functions of market supervision and administration of the people’s governments at or above the county level shall investigate and deal with acts of unfair competition in accordance with the law, unless otherwise provided by laws or administrative regulations.

Article 5 — The State shall encourage, support and protect all organizations and individuals in exercising social supervision over acts of unfair competition. State organs and their staff shall not support or cover up acts of unfair competition. Industry associations and chambers of commerce shall strengthen industry self-discipline, provide guidance, and regulate the competition conduct of their members in accordance with the law, and safeguard the order of market competition.

Chapter II — Acts of Unfair Competition

Article 6 — A business operator shall not commit the following acts of confusion to mislead a person into believing that a commodity is that of another person or has a specific connection with another person: (1) using without authorization a mark that is identical with or similar to another person’s name, packaging or decoration that has a certain degree of influence, in respect of a commodity; (2) using without authorization another person’s enterprise name (including shortened name, trade name, etc.), the name of a social organization (including shortened name, etc.) or the name of a natural person (including pen name, stage name, translated name, etc.) that has a certain degree of influence; (3) using without authorization the principal part of a domain name, website name, web page, etc. of another person that has a certain degree of influence; or (4) committing other acts of confusion sufficient to mislead a person into believing that a commodity is that of another person or has a specific connection with another person.

Article 7 — A business operator shall not seek transaction opportunities or competitive advantages by bribing the following entities or individuals with property or by any other means: (1) employees of the counterparty to a transaction; (2) entities or individuals authorized by the counterparty to a transaction to handle relevant matters; or (3) entities or individuals that use their powers or influence to influence a transaction. Where a business operator gives the counterparty to a transaction a discount or pays a commission to an intermediary in the course of a transaction, such discount or commission shall be truthfully recorded in the accounts. The business operator receiving the discount or commission shall also truthfully record the same in the accounts. A business operator whose employee is deemed to have committed an act of bribery shall be deemed to be the act of the business operator, unless the business operator has evidence to prove that the employee’s act is unrelated to the procurement of transaction opportunities or competitive advantages for the business operator.

Article 8 — A business operator shall not carry out false or misleading commercial promotion in respect of the performance, functions, quality, sales status, user reviews, honors obtained, etc. of its commodities, to deceive or mislead consumers. A business operator shall not assist other business operators in carrying out false or misleading commercial promotion by organizing false transactions or other means.

Article 9 — A business operator shall not commit the following acts of infringing upon trade secrets: (1) acquiring trade secrets from the right holder by theft, bribery, fraud, coercion, electronic intrusion or other improper means; (2) disclosing, using or allowing another person to use trade secrets acquired from the right holder by the means mentioned in the preceding item; (3) disclosing, using or allowing another person to use trade secrets in its possession in violation of confidentiality obligations or the right holder’s requirements for keeping trade secrets confidential; or (4) instigating, inducing or assisting another person in acquiring, disclosing, using or allowing another person to use the right holder’s trade secrets in violation of confidentiality obligations or the right holder’s requirements for keeping trade secrets confidential. Where a business operator other than a natural person, legal person or unincorporated organization commits the illegal acts listed in the preceding paragraph, such acts shall be deemed as infringement of trade secrets. Where a third party knows or should have known that an employee, former employee or any other entity or individual of the right holder of a trade secret has committed the illegal acts listed in the first paragraph of this Article, but still acquires, discloses, uses or allows another person to use such trade secret, it shall be deemed as infringement of trade secrets. For the purposes of this Law, “trade secret” means technical information, business information and other commercial information that is not known to the public, has commercial value, and for which the right holder has taken corresponding confidentiality measures.

Article 10 — A business operator shall not carry out the following prize-attached sales activities: (1) the type of prizes, the conditions for claiming prizes, the amount of prizes or the prizes and other information concerning the prize-attached sales are not clear, thereby affecting the claiming of prizes; (2) carrying out prize-attached sales with false and untrue or unfairly determined winning results by deception or other means; or (3) carrying out prize-attached sales with the highest prize exceeding RMB 50,000 through lottery or similar means.

Article 11 — A business operator shall not fabricate or disseminate false or misleading information to damage the commercial reputation or commodity reputation of a competitor.

Article 12 — A business operator using the internet to engage in production or business operations shall abide by the provisions of this Law. A business operator shall not use technical means to influence users’ choices or otherwise commit the following acts of obstructing or disrupting the normal operation of internet products or services lawfully provided by other business operators: (1) inserting links into or forcing URL redirection on internet products or services lawfully provided by other business operators without their consent; (2) misleading, deceiving or forcing users to modify, close or uninstall internet products or services lawfully provided by other business operators; (3) maliciously causing incompatibility with internet products or services lawfully provided by other business operators; or (4) other acts of obstructing or disrupting the normal operation of internet products or services lawfully provided by other business operators.

Chapter III — Investigation of Suspected Acts of Unfair Competition

Article 13 — When investigating suspected acts of unfair competition, the supervision and inspection departments may adopt the following measures: (1) entering the business premises of the suspected business operator for inspection; (2) questioning the business operator under investigation, interested parties and other relevant entities and individuals and requiring them to provide explanations or other materials related to the suspected act of unfair competition; (3) consulting and copying agreements, account books, documents, records, vouchers, electronic data and other materials related to the suspected act of unfair competition; (4) sealing up or seizing property related to the suspected act of unfair competition; and (5) examining the bank accounts of the business operator suspected of engaging in unfair competition. Adoption of the measures provided in the preceding paragraph shall be reported in writing to the principal responsible person of the supervision and inspection department for approval. Adoption of the measures provided in items (4) and (5) of the preceding paragraph shall be reported to the principal responsible person of the supervision and inspection department at the level of the city divided into districts or above for approval. Supervision and inspection departments investigating suspected acts of unfair competition shall abide by the provisions of the Administrative Compulsion Law of the People’s Republic of China and other relevant laws and administrative regulations, and shall inform the parties of the investigation results in a timely manner.

Article 14 — Where a supervision and inspection department investigates suspected acts of unfair competition, the business operator under investigation, interested parties and other relevant entities and individuals shall truthfully provide relevant materials or information.

Article 15 — Supervision and inspection departments and their staff shall have the obligation to keep confidential trade secrets they come to know during the course of investigation.

Article 16 — Complaints and reports concerning suspected acts of unfair competition shall be handled by the supervision and inspection departments in a timely manner in accordance with the law. Supervision and inspection departments shall make public their telephone numbers, mailboxes or e-mail addresses for receiving complaints and reports, and shall keep the complainants and whistleblowers confidential. Anonymous complaints and reports with specific facts shall be handled by supervision and inspection departments in accordance with the law after verification of such facts.

Chapter IV — Legal Liability

Article 17 — Where a business operator violates the provisions of this Law and causes damage to another person, it shall bear civil liability in accordance with the law. Where the business operator’s act causes damage to another person’s lawful rights and interests arising from unfair competition, the business operator shall compensate for the damage. Where it is difficult to determine the actual loss suffered by the business operator as a result of the infringing act, and it is also difficult to determine the benefits obtained by the infringer from the infringement, the people’s court may, based on the circumstances of the infringement, award damages of not more than RMB 5,000,000. The compensation amount shall also include reasonable expenses incurred by the business operator to stop the infringing act. Where a business operator violates the provisions of Articles 6 or 9 of this Law and the right holder’s actual loss or the infringer’s benefits from the infringement are difficult to determine, the people’s court may award damages of not more than RMB 5,000,000 based on the circumstances of the infringement.

Article 18 — Where a business operator commits an act of confusion in violation of Article 6 of this Law, the supervision and inspection department shall order it to cease the illegal act and confiscate the illegal commodities. Where the illegal business revenue exceeds RMB 50,000, the business operator may concurrently be fined not less than one time but not more than five times the illegal business revenue; where there is no illegal business revenue or the illegal business revenue is less than RMB 50,000, a fine of not more than RMB 250,000 may concurrently be imposed. Where the circumstances are serious, the business license shall be revoked. Where the enterprise name registered by a business operator in violation of Article 6 of this Law is identical with or similar to another person’s prior enterprise name or other mark and causes confusion, the registration authority shall handle the matter in accordance with the law.

Article 19 — Where a business operator bribes another person in violation of Article 7 of this Law, the supervision and inspection department shall confiscate the illegal gains and impose a fine of not less than RMB 100,000 and not more than RMB 3,000,000. Where the circumstances are serious, the business license shall be revoked.

Article 20 — Where a business operator carries out false or misleading commercial promotion in violation of Article 8 of this Law, or assists other business operators in carrying out false or misleading commercial promotion by organizing false transactions, the supervision and inspection department shall order it to cease the illegal act and impose a fine of not less than RMB 200,000 and not more than RMB 1,000,000; where the circumstances are serious, a fine of not less than RMB 1,000,000 and not more than RMB 2,000,000 shall be imposed, and the business license may be revoked. Where a business operator violates the provisions of Article 8 of this Law and the case constitutes false advertising, it shall be punished in accordance with the provisions of the Advertising Law of the People’s Republic of China.

Article 21 — Where a business operator infringes upon trade secrets in violation of Article 9 of this Law, the supervision and inspection department shall order it to cease the illegal act, confiscate the illegal gains, and impose a fine of not less than RMB 100,000 and not more than RMB 1,000,000; where the circumstances are serious, a fine of not less than RMB 500,000 and not more than RMB 5,000,000 shall be imposed.

Article 22 — Where a business operator carries out illegal prize-attached sales in violation of Article 10 of this Law, the supervision and inspection department shall order it to cease the illegal act and impose a fine of not less than RMB 50,000 and not more than RMB 500,000.

Article 23 — Where a business operator damages the commercial reputation or commodity reputation of a competitor in violation of Article 11 of this Law, the supervision and inspection department shall order it to cease the illegal act and eliminate adverse effects, and impose a fine of not less than RMB 100,000 and not more than RMB 500,000; where the circumstances are serious, a fine of not less than RMB 500,000 and not more than RMB 3,000,000 shall be imposed.

Article 24 — Where a business operator obstructs or disrupts the normal operation of internet products or services lawfully provided by other business operators in violation of Article 12 of this Law, the supervision and inspection department shall order it to cease the illegal act and impose a fine of not less than RMB 100,000 and not more than RMB 500,000; where the circumstances are serious, a fine of not less than RMB 500,000 and not more than RMB 3,000,000 shall be imposed.

Article 25 — Where a business operator engaged in an act of unfair competition voluntarily eliminates or mitigates the harmful consequences of the illegal act, or commits any other circumstance, a lighter or mitigated administrative penalty shall be imposed in accordance with the law; where the illegal act is minor and promptly corrected without causing harmful consequences, no administrative penalty shall be imposed.

Article 26 — Where a business operator receives an administrative penalty for engaging in an act of unfair competition, the supervision and inspection department shall record the same in its credit record and publish it to the public in accordance with the provisions of relevant laws and administrative regulations.

Article 27 — Where a business operator violates the provisions of this Law and shall bear civil liability or administrative liability, and its property is insufficient to cover both, the civil liability shall be assumed first.

Article 28 — Where a supervision and inspection department’s decision on an administrative penalty is not complied with, an application may be made to the relevant department for enforcement by the people’s court in accordance with the law.

Article 29 — Where a party refuses or obstructs the lawful performance of duties by staff members of a supervision and inspection department in accordance with the provisions of this Law, the supervision and inspection department shall order it to take corrective action and may impose a fine of not more than RMB 5,000 on the individual or a fine of not more than RMB 50,000 on the entity, and the public security organ may impose public security administration penalties in accordance with the law.

Article 30 — Where a staff member of a supervision and inspection department abuses his or her powers, neglects his or her duties, engages in malpractices for personal gain, or divulges trade secrets he or she comes to know during the course of investigation, penalties shall be imposed in accordance with the law.

Article 31 — Where a violation of the provisions of this Law constitutes a crime, criminal liability shall be pursued in accordance with the law.

Article 32 — In a civil proceeding for infringement of trade secrets, where the right holder of the trade secret provides prima facie evidence that it has taken confidentiality measures for the claimed trade secret and reasonably identifies the allegedly infringed trade secret, and prima facie evidence that the trade secret has been infringed, and provides any of the following evidence, the alleged infringer shall bear the burden of proving that it has not committed infringement of trade secrets: (1) evidence indicating that the alleged infringer had channels or opportunities to obtain the trade secret and the information it used is materially identical with such trade secret; (2) evidence indicating that the trade secret has been disclosed or used, or is at risk of being disclosed or used, by the alleged infringer; or (3) other evidence indicating that the trade secret has been infringed by the alleged infringer.

Chapter V — Supplementary Provisions

Article 33 — This Law shall come into force on December 1, 1993.