Legislation
The Anti-Unfair Competition Law is enacted to promote the healthy development of the socialist market economy, encourage and protect fair competition, prevent and stop unfair competition, and protect the legitimate rights and interests of business operators and consumers.
The Anti-Unfair Competition Law was adopted at the Standing Committee of the Eighth National People's Congress on September 2, 1993; revised for the first time on November 4, 2017, and came into force as of January 1, 2018; amended on April 23, 2019; and revised for the second time on June 27, 2025, to come into force as of October 15, 2025.
Administration Authorities
The State Administration for Market Regulation (SAMR) is responsible for formulating anti-unfair competition regulations and systems, investigating and punishing unfair competition acts, maintaining fair competition in the market, and organizing and providing unified guidance for anti-unfair competition law enforcement.
Local administrations for market regulation are responsible for organizing and providing unified guidance for local anti-unfair competition law enforcement, investigating and handling unfair competition cases, and other related matters.
The Principles of Fair Competition
In their production and business operations, business operators shall adhere to the principles of voluntariness, equality, fairness, and good faith, abide by laws and business ethics, and fairly participate in market competition.
Business ethics may refer to the commonly followed and recognized code of conduct in a specific business field. The court will determine whether a business operator has violated business ethics by comprehensively considering factors such as industry rules or business practices, the subjective intent of the operator, the choice preferences of trading counterparts, and the impact on consumer rights, market competition order, and public interest. Reference may also be made to professional standards, technical specifications, or self-regulatory codes formulated by industry regulators, trade associations, or self-discipline organizations.
Acts of Unfair Competition
Acts of unfair competition refers to any acts by a business operator in their production and business operations that violates the provisions of the Anti-Unfair Competition Law, which disrupts market competition order, and harms the legitimate rights and interests of other business operators or consumers.
The law specifically lists nine types of unfair competition acts: 1) Confusing conduct; 2) Commercial bribery; 3) False or misleading commercial advertising; 4) Trade secret infringement; 5) Unfair prize sales; 6) Commercial defamation; 7) Online unfair competition acts; 8) Platform forcing in-platform sellers to offer below-cost pricing; and 9) Abuse of dominance by large enterprises. Additionally, unfair competition acts include any other acts that violate the principle of good faith and disrupt market competition order but are not covered by the Patent Law, Trademark Law, or Copyright Law.
Subject of Unfair Competition Acts
Subject of unfair competition acts are natural persons, legal persons, and unincorporated organizations engaged in the manufacturing or trading of goods, or provision of services (goods and services hereinafter referred to as “goods”). This also includes market participants that may compete with these operators for business opportunities or impair their competitive advantages in production and operations.
Nine Specific Acts of Unfair Competition:
(1) Confusing conduct
A business operator shall not commit, or aid others in committing, any of the following confusing conduct that will mislead the public into believing that their goods are the goods of another person or that they have a specific connection with another person:
(i) unauthorized use of a mark that is identical or similar to the name, packaging or decoration of another person’s goods, which has certain fame,
(ii) unauthorized use of another person’s name (including its abbreviation, or trade name, etc.) or the name of an individual (including his or her pen name, stage name, online username, or translated name, etc.), which has certain fame;
(iii) unauthorized use of the main part of another person's domain name, or the website name, webpage, new media account name, application name, or icon of another person, which has certain fame;
(iv) other confusing conduct that sufficiently mislead the public into believing that their goods are those of another person or that they have a specific connection with another person; or
(v) unauthorized use of another person's registered trademark or unregistered well-known trademark as a trade name, or setting another person's goods name, corporate name (including its abbreviation or trade name), registered trademark, or unregistered well-known trademark as a search keyword, thereby misleading the public into believing that their goods are the goods of another person or that they have a specific connection with another person.
Determination of confusing conduct
The following circumstances will be considered by the court in determining confusing conduct.
Use:
The use mentioned above refers to using a mark with certain fame within China on goods, product packaging, containers and transaction documents, or advertisements, exhibitions and other commercial activities, for the purpose of identifying the source of the goods. This also includes incorporating another person’s business mark or name into an entity’s trade name, or using such marks or names as online search keywords.
Certain fame:
A mark with certain fame must possess a certain level of market recognition, and have distinctive characteristics that enable consumers to distinguish the source of goods.
To determine a certain level of market recognition, the following factors shall be comprehensively considered: 1) the degree of recognition among relevant consumers in China; 2) the duration, geographic scope, sales volume, and target consumers of goods sales; 3) the duration, intensity and geographic coverage of promotional activities; and 4) the protection status of the mark, etc.
The following cannot serve as distinctive characteristics that enable consumers to distinguish the source of goods:
(1) generic names, designs or models of the goods;
(2) marks that merely indicate the quality, main ingredients, function, uses, weight, quantity or other characteristics of goods;
(3) shapes resulted solely from the nature of the goods themselves, required for obtaining technical effects, or giving substantial value to the goods; or
(4) other marks lacking distinctiveness.
However, for a mark mentioned in items (1), (2) and (4), if it has acquired distinctiveness and obtained a certain level of market recognition through use, the concerned party may submit sufficient supporting evidence to prove that the mark have had certain fame.
Decoration:
The decoration may refer to a distinctive overall commercial image formed by the decoration of the operator's business premises, the style of business equipment, the attire of business personnel, and other such elements.
Corporate name:
The corporate name may include both corporate names legally registered with market entity registration authorities and names of foreign enterprises used commercially within China, including abbreviations and trade names.
Identical or similar:
Whether a mark is identical or similar to a mark with certain fame can be determined by reference to the principles and methods used for determining identical or similar trademarks.
Misleading:
Misleading the public into believing that their goods are those of another person, or that they have a specific connection with another person, includes misleading the public into believing that the goods have a business partnership, licensed use, commercial sponsorship, endorsement or any other specific connection with another person.
Confusing:
The use of identical or visually indistinguishable goods names, goods packaging, or decorations on identical goods shall be deemed sufficient to cause confusion with other persons’ marks having certain fame.
Where any of the following mark is used fairly and legitimately for the purpose of objectively describing or indicating goods, Courts shall not determine such use to be a confusion conduct:
(1) a mark containing the generic name, image, or model of the goods;
(2) a mark directly indicating the quality, main raw material, function, uses, weight, quantity, or other characteristics of the goods; or
(3) a mark incorporating geographical names.
Where the mark, or the distinctive part thereof, in the alleged confusing conduct falls under the category of marks that are prohibited from being used as trademarks under the Trademark Law, the court will also not determine it to be a confusing conduct.
Other confusing conduct:
The unauthorized use by business operators of any mark with certain fame beyond those specified in the above items (i), (ii) and (iii) of the confusing conduct, where it is sufficient to mislead the public into believing that their goods are those of another party or that they have a specific connection with another person, may be determined to be an “other confusing conduct”.
Sales:
Where a business operator sells goods bearing marks that violate the provisions on confusing conduct under the Anti-Unfair Competition Law, thereby causing confusion and misleading the public into believing that their goods are those of another party or that they have a specific connection with another person, the court may determine such to be confusing conduct.
However, if the seller was unaware that the goods sold by him has infringed upon other persons' rights and can prove that the goods were legally obtained and indicate the supplier, the seller may be exempted from compensation liability.
Contributory infringement:
Where a person intentionally provides storage, transportation, mailing, printing, concealment, business premises or other conveniences for others to commit confusing conduct, the person’s act may be determined by the court to be contributory infringement. And this person shall bear joint and several liability with the principal infringer.
(2) Commercial bribery
A business operator shall not bribe any of the following entities or individuals by offering property or other means to seek a transaction opportunity or competitive advantages:
(i) any staff member of the transaction counterparty;;
(ii) any entity or individual entrusted by the transaction counterparty to handle relevant affairs; or
(iii) any entity or individual who uses its/his/her powers or influence to affect the transaction.
The entity or individual specified in the preceding paragraph shall not accept bribes.
Bribery by any staff member of a business operator shall be deemed to be the conduct of the business operator, unless the business operator has evidence proving that the staff member's conduct is unrelated to efforts in seeking the transaction opportunity or competitive advantages for the business operator.
Normal Business Practices:
A business operator may explicitly pay a discount to the transaction counterparty or a commission to an intermediary of the transaction in the course of transaction activities. The discount paid to the transaction counterparty or the commission paid to the intermediary by the business operator shall be recorded truthfully in its account books. A business operator that accepts such discount or commission shall also record such payment truthfully in its account books.
(3) False or misleading commercial advertising
A business operator shall not make false or misleading commercial advertising for their goods' performance, functions, quality, sales status, user evaluation, or honor received, thereby deceiving or misleading consumers and other business operators.
A business operator shall not assist another business operator in making false or misleading commercial advertising by organizing fraudulent transactions, false reviews or other approach.
If a business operator provides untrue goods-related information during commercial promotion, thereby deceiving or misleading the relevant public, such act shall be determined to be false commercial advertising.
Where a business operator engages in any of the following acts that deceive or mislead the relevant public, such act may be determined to be "misleading commercial advertising":
1) Making one-sided promotions or comparisons of goods;
2) Presenting scientifically unproven viewpoints or phenomena as established facts in product advertisements;
3) Using ambiguous language in commercial promotion; and
4) Other commercial promotional activities that are sufficient to mislead the public.
To determine whether such conduct constitutes misleading commercial advertising, factors such as everyday life experience of consumers, the general level of attention of the relevant public, the occurrence of actual misunderstanding, and the actual circumstances of the target consumers being promoted should be taken into account.
(4) Trade secret infringement
A business operator shall not commit any trade secret infringement.
The definition and protection of trade secrets are discussed separately; please refer to Overview of the Trade Secrets System for details.
(5) Unfair prize sales
The prize sale activities of a business operator shall not involve the following circumstances:
(i) defining unclear types of prizes, redemption conditions, amounts of prize money, prizes in kind, or other information regarding prize sales, thereby affecting prize redemption;
(ii) changing, after the commencement of a prize sales activity, the types of prizes, redemption conditions, amounts of prize money, prizes in kind or other information regarding prize sales, without justifiable reasons;
(iii) conducting prize sales through deceptive means, such as falsely claiming prizes or deliberately allowing pre-selected individuals to win prizes; or
(iv) conducting prize sales through prize draws, where the highest prize money exceeds CNY 50,000.
(6) Commercial defamation
A business operator shall not fabricate or disseminate or instruct another person to fabricate or disseminate any false information or misleading information, thereby harming the business reputation or goods reputation of other operators.
Where a party claims that a business operator has engaged in commercial defamation, the party shall bear the burden of proof to demonstrate that it was the specific target of the alleged defaming conduct.
If a business operator disseminates fabricated or misleading information created by others, thereby damaging the commercial reputation or goods reputation of a competitor, such conduct shall be determined to be commercial defamation.
(7) Online unfair competition acts
Where a business operator utilizes the internet in engaging in its production and business operations, it shall comply with all provisions of the Anti-Unfair Competition Law.
The business operator shall not commit any of the following acts that impede or disrupt the normal operation of internet products or services legally provided by other business operators, by affecting user choices or other manners using data, algorithms, techniques, platform rules or other means:
(i) without authorization, inserting a link into or forcing redirects from an internet product or service legally provided by another business operator,
(ii) Misleading, deceiving, or forcing users to modify, close, or uninstall an internet product or service legally provided by another business operator;
(iii) implementing in bad faith an incompatibility with an internet product or service legally provided by another business operator; or
(iv) any other acts that impede or disrupt the normal operation of an internet product or service legally provided by another business operator.
A business operator shall not, by fraud, coercion, circumvention, destruction of technical management measures, or other unfair means, obtain or use data legally held by another business operator, thereby harming the legitimate rights and interests of another business operator and disrupting the market competition order.
A business operator shall not abuse platform rules to directly conduct or instruct others to conduct fraudulent transactions, false reviews, malicious returns or other abusing acts against another business operator, thereby harming the legitimate rights and interests of another business operator and disrupting the market competition order.
A targeted redirection that occurs directly without the consent of other business operators or users shall be deemed a “forced redirection” as specified in item (i) above.
Where only a link is inserted and the redirection is triggered by the user, a determination as to whether the conduct violates item (i) above shall be made based on a comprehensive assessment of factors such as the specific manner of link insertion, whether there is a legitimate justification, and the impact on the interests of users and other business operators.
Where, without clearly informing the user in advance and obtaining their consent, a business operator maliciously impedes or disrupts, by misleading, deceiving, or forcing the users into modifying, disabling, uninstalling or other approaches, an internet product or service legally provided by another business operator, such conduct shall be determined to be a violation of item (ii) above.
(8) Platform forcing in-platform sellers to offer below-cost pricing
A platform operator shall not force or covertly force business operators on its platform to sell goods at prices below cost in accordance with its pricing rules, thereby disrupting the market competition order.
(9) Abuse of dominance by large enterprises
A large enterprise or any other business operator shall not abuse its dominant position in terms of capital, technology, transaction channels, industry influence, among others, to require a small or medium-sized enterprise to accept evidently unreasonable payment periods, methods or conditions, liability for breach of contract, or other transaction conditions, thereby delaying payments to small or medium-sized enterprises for goods, projects, services, or other items.
Judicial Remedies
Where a business operator’s legitimate rights and interests are harmed by unfair competition acts, it may institute a lawsuit with a people's court.
Jurisdiction
Civil lawsuits arising from unfair competition acts shall be under the jurisdiction of the people’s court at the place where the infringement occurred or where the defendant is domiciled.
If a party claims that the place of delivery, which may be chosen at will by online purchasers, constitutes the place of infringement, the court shall not support such a claim.
Where the alleged act of unfair competition occurred outside the territory of the People's Republic of China, but the result of the infringement occurred within China, and the party claims jurisdiction by the court at the place where the result occurred, the people's court shall support the claim.
Infringement Liability
Where a business operator violates the provisions of this Law and causes damage to others, it shall bear civil liability in accordance with the law.
Where an act of unfair competition constitutes a crime, criminal liability shall be pursued in accordance with the law.
A business operator engaging in unfair competition shall bear civil, administrative, and criminal liability. If its property is not sufficient to cover all the damages, the civil liability shall take precedence.
In cases involving acts of confusion, where the plaintiff’s claim for an order requiring the defendant to cease using or to change its corporate name is legally justified, the court shall order the defendant to stop using the said corporate name.
Overlap Between Intellectual Property Rights and Unfair Competition
Where the same infringer has committed an infringing act against the same party within the same time period and the same geographical area, and the court has already determined that the act constitutes an infringement of copyright, patent, or exclusive rights to a registered trademark and has ordered the infringer to bear civil liability, the people's court shall not support a subsequent claim by the same plaintiff seeking to hold the same infringer civilly liable for the same act on the grounds of unfair competition.
Damages
The compensation for damages caused by unfair competition acts to a business operator shall be determined according to the actual losses suffered by the business operator due to the infringement or the profits earned by the infringer due to the infringement.
Where a business operator intentionally commits the trade secret infringement and the circumstances are serious, the compensation for damages may be determined by not less than one time but no more than five times the compensation determined in accordance with the aforementioned approach.
The compensation for damages shall include the reasonable expenses paid by the business operator to stop the infringement.
With respect to acts of unfair competition that violate the principle of fair competition (Article 2), confusing conduct (Article 7), false or misleading commercial advertising (Article 9), trade secret infringement (Article 10), commercial defamation (Article 12), or online unfair competition acts (Article 13), where it is difficult to determine the actual losses suffered by the rights holder due to the infringement or the profits earned by the infringer due to the infringement, the people's court shall award compensation of not more than CNY 5 million based on the circumstances of the infringement.
Administrative Investigation
Authorities performing market regulation duties in people's governments at or above the county level shall supervise and inspect acts of unfair competition. Where laws and administrative regulations provide for supervision and inspection by other authorities, such provisions shall apply.
In investigations into suspected acts of unfair competition, the relevant supervision and inspection authorities may, upon approval by the person in charge, take the following measures:
(1) accessing the business premises involved in a suspected act of unfair competition for inspection;
(2) inquiring of the business operator, any interested party, or any other related entity or individual under investigation, and requiring them to explain relevant situations or provide other materials in relation to the investigated act;
(3) inquiring into and copying the contracts and agreements, account books, vouchers, documents, records, business correspondence and other materials related to the suspected act of unfair competition;
(4) sealing or detaining the property involved in the suspected act of unfair competition; and
(5) inquiring into the bank account of the business operator suspected of unfair competition.
While looking into suspected acts of unfair competition, the supervision and inspection authorities shall promptly disclose the investigation and handling results to the public.
When the supervision and inspection authorities investigate suspected unfair competition, the investigated business operators, interested parties, and other related entities or individuals shall truthfully provide the relevant materials or information.
Where a business operator is suspected of unfair competition practices, the supervision and inspection authorities may interview the relevant responsible persons and require them to explain the circumstances and propose corrective measures.
The supervision and inspection authorities and their personnel shall have a legal obligation to maintain confidentiality of any trade secrets, personal privacy, and personal information learned during the investigation.
Any entity or individual shall have the right to report any of suspected acts of unfair competition to the supervision and inspection authority. The supervision and inspection authority shall promptly handle such reports according to the law upon receipt of such report.
The supervision and inspection authorities shall make available to the public the phone numbers, mailing addresses or email addresses for accepting such reports and maintain confidentiality of the reporter. For reports submitted under real names and providing relevant facts and evidence, the supervision and inspection authorities shall promptly inform the reporter of the handling results.
Administrative Penalty
Confusing conduct
Where a business operator commits confusing conduct or aiding others in committing confusing conduct, the supervision and inspection authority shall order the business operator to cease the illegal conduct, and confiscate the illegal goods. Where the illegal business turnover is not less than CNY 50,000, a fine of not more than five times the illegal business turnover may be also imposed. Where there is no illegal business turnover or the illegal business turnover is less than CNY 50,000, a fine of not more than CNY 250,000 may be also imposed. Where the circumstances are serious, its business license shall also be revoked.
A seller who sells illegal goods as provided in the previous provisions shall be punished in accordance with the provisions of the preceding paragraph. Where the seller is unaware that the goods sold by them are illegal goods, and can prove that they legally obtained the goods and indicates the supplier, the supervision and inspection authority shall order cessation of the sale without imposing an administrative penalty.
Where a confusing conduct involves a corporate name registered by a business operator, the business operator shall promptly go through formalities to change its registered corporate name. Prior to the change of the name, the registration authority shall use the unified social credit code in lieu of its corporate name.
Commercial bribery
For the acts of commercial bribery, the supervision and inspection authority shall confiscate the illegal gains and impose a fine of not less than CNY 100,000 but not more than CNY 1 million. Where the circumstances are serious, a fine of not less than CNY 1 million but not more than 5 million may be imposed, and the business license may also be revoked. Where the legal representative, principal, or directly responsible person of a business operator is personally liable for engaging in bribery or personally accepts a bribe, the supervision and inspection authority shall confiscate the illegal gains and impose a fine of not more than CNY 1 million. Where a party accepts a bribe in the course of commercial transactions, if laws or administrative regulations provide otherwise, such provisions shall apply; where there are no such provisions, the supervision and inspection authority may impose a fine not more than CNY 2 million on the entity, and a fine of not more than CNY 500,000 on the individual.
False or misleading commercial advertising
For the acts of false or misleading commercial advertising, the supervision and inspection authority shall order the business operator to cease the illegal conduct and impose a fine of not more than CNY 1 million. Where the circumstances are serious, a fine of not less than CNY 1 million but not more than CNY 2 million may be imposed, and the operator's business license may be also revoked. Where a business operator releases a false advertisement, it shall be punished according to the Advertising Law of the People's Republic of China.
Trade secret infringement
For the trade secret infringement, the supervision and inspection authority shall order it to cease the illegal conduct, confiscate the illegal gains, and impose a fine of not less than CNY 100,000 but not more than CNY 1 million. Where the circumstances are serious, a fine of not less than CNY 1 million but not more than CNY 5 million shall be imposed.
Unfair prize sales
For the acts of unfair prize sales, the supervision and inspection authority shall order it to cease the illegal conduct and impose a fine of not less than CNY 50, 000 but not more than CNY 500, 000.
Commercial defamation
For the acts of commercial defamation, the supervision and inspection authority shall order it to cease the illegal conduct, eliminate the impact, and impose a fine of not less than CNY 100,000 but not more than CNY 1 million. Where the circumstances are serious, a fine of not less than CNY 1 million but not more than CNY 5 million shall be imposed.
Online unfair competition acts
For the acts of online unfair competition, the supervision and inspection authority shall order it to cease the illegal conduct and impose a fine of not less than CNY 100,000 but not more than CNY 1 million. Where the circumstances are serious, a fine of not less than CNY 1 million but not more than CNY 5 million shall be imposed.
Platform forcing sellers to offer below-cost pricing
For the acts of platform operators forcing business operators on the platform to sell goods at prices below cost, the supervision and inspection authority shall order it to cease the illegal conduct and impose a fine of not less than CNY 50,000 but not more than CNY 500,000. Where the circumstances are serious, a fine of not less than CNY 500,000 but not more than CNY 2 million shall be imposed.
Abuse of dominance by large enterprises
For the acts of large enterprises abusing their dominant position, the supervision and inspection authority of the people's government at or above the provincial level shall order it to make corrections within a prescribed time limit. Where it fails to make corrections within the time limit, a fine of not more than CNY 1 million shall be imposed. Where the circumstances are serious, a fine of not less than CNY 1 million but not more than CNY 5 million shall be imposed.
Other circumstances
Where a business operator violates the provisions of this Law by engaging in unfair competition, and proactively eliminates or mitigates the harmful consequences of the illegal conduct, or there are other such circumstances prescribed by law, a lighter or reduced administrative penalty may be imposed in accordance with the law. Where the illegal conduct is minor and promptly corrected, and no harmful consequences have occurred, no administrative penalty shall be imposed.
Where a business operator violates the provisions of this Law by committing unfair competition and is subject to an administrative penalty, the supervision and inspection authority shall enter such penalty in its credit record and publicly disclose the same in accordance with the relevant laws or administrative regulations.
Where an individual or entity obstructs the supervision and inspection authority from fulfilling their duties in accordance with this Law, or refuses or impedes the investigations, the supervision and inspection authority shall order the individual or entity to make corrections, and impose a fine of not more than CNY 10, 000 to the individual or a fine of not more than CNY 100, 000 to the entity.
Where the party concerned is dissatisfied with a decision made by the supervision and inspection authority, it may apply for administrative reconsideration or institute an administrative lawsuit in accordance with the law.
Where any staff member of a supervision and inspection authority abuse powers, neglect duties, commits malpractices for personal gain, or reveals any trade secrets, personal privacy, or personal information learned during an investigation, such staff member shall be punished in accordance with the law.
Where an individual or entity violates the provisions of this Law and such violations constitute a violation of public security administration, it shall be imposed public security administrative penalties in accordance with the law. Where such violations constitute a crime, it shall be pursued criminal liability in accordance with the law.
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