On November 4, the 30th Plenary Session of the 12th National People’s Congress amended the Law of the People’s Republic of China Against Unfair Competition. The amended version of the law will go into effect on January 1, 2018.
The new law will apply to all business operators, defined by article 2 paragraph 3 as “natural persons, legal persons and unincorporated organizations engaged in the production, or in the marketing of commodities, or in the provision of services (the commodities mentioned below include services)”.
Article 26 mandates the use of social credit mechanisms for acts of unfair competition:
“Where business operators engage in acts of unfair competition, thereby violating the Present Law, and receive administrative punishments, departments responsible for inspection and supervision shall include (such information) in the business operator’s credit record, and disclose it in accordance with stipulation of relevant laws, and administrative regulations.”
Acts of unfair competition listed in the Chinese, and hence official, version of the Law Against Unfair Competition include – but are not limited to:
the offer of material inducements, and other inducements to pursue business opportunities, or obtain a dominant market position;
false or misleading advertising or trading;
disclosure, theft, or the acquisition of confidential business information through bribery, fraud, and other means;
unfair advertising, and unfair business practices in e-commerce.
Disclosure of information about unfair competition will take place through the National Enterprise Credit Information Publicity System.