Draft Revisions to Chinese Anti-Unfair Competition Law

March 14, 2016

The 1993 Anti-Unfair Competition Law (“AUCL”)[1] was among the first major laws of China’s “reform and opening up” period to target unfair and anticompetitive practices in the course of market behavior. It establishes offenses for trademark and trade dress infringement, commercial bribery, false and deceptive advertising, misappropriation of trade secrets, trade libel or disparagement, misuse of sales incentives and sweepstakes, and various anticompetitive practices. On February 25, 2016, the State Council released for public comment draft revisions[2] to the AUCL that would materially change Chinese law in two areas of rising concern for multinational companies active in China: commercial bribery and antitrust. If enacted, the draft revisions would overhaul China’s basic prohibition of commercial bribery, delete obsolete antitrust provisions of the AUCL, and introduce sweeping new rules against the “abuse of a relative advantageous position.” Some proposed revisions codify current enforcement practice or adapt principles from foreign regimes, but the proposed language raises many questions about the future of scope and targets of AUCL enforcement.

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[1] See Zhonghua Renmin Gongheguo Fanbuzhengdang Jingzheng Fa [Anti-Unfair Competition Law of the People’s Republic of China] (promulgated by the Standing Committee of the National People’s Congress on Sept. 2, 1993 and effective Dec. 1, 1993), available here.

[2] See Zhonghua Renmin Gongheguo Fanbuzhengdang Jingzheng Fa (Xiuding Cao’an Songshengao)[Draft Revisions to the Anti-Unfair Competition Law of the People’s Republic of China Submitted for Review] (released by the State Council on Feb. 25, 2016 for public comments), available here.

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