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Law Against Unfair Competition of the People's Republic of China (1993)

( Adopted at the Third Session 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 on
September 2, 1993. and Effective as of December 1, 1993 )

Acts of Unfair Competition

Article 5.   An operator may not adopt the following unfair means to carry to transactions in the market and cause damage to competitors:

(1) passing off the registered trademark of another person;

(2) using, without authorization, the name, packaging or decoration peculiar to well-known goods or using a name, packaging or decoration similar to that of well-known goods, so that his goods are confused with the well-known goods of another person, causing buyers to mistake them for the well-known goods of the other person;

(3) using, without authorization, the business name or personal name of the other person on his own goods, leading people to mistake them for the goods of the other person;

(4) forging or falsely using, on his goods, symbols of quality such as symbols of certification and symbols of famous and high-quality goods, falsifying the origin of his goods, and making false representations which are misleading as to the quality of the goods.

Article 6.   A public utility enterprise or any other operator having monopolistic status according to law may not restrict others to buying the goods of operators designated by it so as to exclude other operators from competing fairly.

Article 7.   Governments and their subordinate departments may not abuse their administrative powers to restrict others to buying the goods of operators designated by them and to restrict the lawful business activities of other operators.

Governments and their subordinate departments shall not abuse their administrative powers to restrict the entry of goods from other parts of the country into the local market or the flow of local goods to markets in other parts of the country.

Article 8.   An operator may not practice bribery by using money, gifts or other means to sell or buy goods. Where an operator secretly pays a kickback to the other party, be it an entity or individual, without accounting for it in the books, he shall be punished for offering a bribe; where the other party, be it an entity or individual, secretly accepts a kickback without accounting for it in the books, it or he shall be punished for taking a bribe.

In the selling or buying of goods, an operator may express clearly his intention to offer a discount to the other party and pay a commission to the middleman. Where an operator gives a discount to the other party and pays a commission to the middleman, he must enter the items in the books factually. An operator accepting a discount or commission must enter it in the books factually.

Article 9.   An operator may not use advertisements or other meas to give false, misleading publicity as to the quality, composition, performance, use, manufacturer, useful life, origin, etc. , of the goods.

An advertisement operator shall not act as an agent for, or design, produce or release advertisements contatning false representations of which he is obviously aware or should be aware.

Article 10.   An operator may not adopt the following means to infringe business secrets:

(1) obtaining business secrets from the owners of rights by stealing, promising of gain, resorting to coercion or other improper means;

(2) disclosing, using, or allowing others to use business secrets of the owners of rights obtained by the means mentioned in the preceding item;

(3) disclosing, using or allowing others to use business secrets that he has obtained by breaking an engagement or disregarding the requirement of the owners of the rights to maintain the business secrets in confidence.

Where a third party obtains, uses or discloses the business secrets of others when he obviously has or should have full awareness of the illegal acts mentioned in the preceding paragraph, he shall be deemed to have infringed the business secrets of others.

"Business secret" in this Article means technical information and operational information which is not known to the public, which is capable of bringing economic benefits to the owner of rights, which has practical applicability and which the owner of rights has taken measures to keep secret.

Article 11.   An operator may not sell goods at a price below cost for the purpose of excluding his competitors.

None of the following acts constitute acts of unfair competition:

(1) selling fresh or live goods;

(2) disposing of goods the useful life of which is about to expire or other overstocked goods;

(3) reducing prices seasonably;

(4) selling goods at reduced prices for paying off debts, changing the line of production or closing the business.

Article 12.   An operator may not, in sales of goods, make a tie-in sale against the wish of the buyer or attach other unreasonable conditions.

Article 13.   An operator may not make the following kinds of sales with prizes attached:

(1) making sales with prizes attached by the fraudulent method of falsely claiming the existence of prizes or intentionally causing internally chosen people to win the prizes;

(2) promoting the sale of inferior but high-priced goods by offering prizes;

(3) making sales with prizes attached in the form of a lottery where the amount for the highest prize exceeds 5 , 000 yuan (RMB).

Article 14.   An operator may not utter or disseminate falsehoods to damage the goodwill of a competitor or the reputation of his goods

Article 15.   Tenderers may not submit tenders in collusion with one another to force the tender price up or down.

A tenderer shall not collaborate with the party inviting tenders to exclude competitors from fair competition.