Beijing Highlights Exemplary Unfair Competition Cases from 2023

As we step into 2024, China's market regulation authorities continue their vigilant oversight against illegal activities undermining fair competition. On January 10th 2024, the Beijing Administration for Market Regulation (Beijing AMR) spotlighted six notable cases from 2023, illustrating the agency's dedicated efforts to clamp down on unfair competition practices. These cases span a variety of infringements, including deceptive advertising, commercial bribery, misuse of technology, and discreditation tactics.

Deceptive Advertising Practices
The Beijing AMR identified two cases where companies egregiously misrepresented their offerings. In one instance, an educational service provider falsely advertised a program promising access to elite academic circles, which was neither available nor as successful as claimed. This resulted in a substantial fine of 600,000 RMB. Another case involved a retailer misleading consumers with exaggerated claims about its products, leading to a penalty of 10,000 RMB.

Commercial Bribery
Two further cases highlighted the covert nature of commercial bribery in varying sectors. A company operating within the pharmaceutical industry, was fined 1.2 million CNY for producing promotional material under the guise of assistance, an act constituting indirect bribery. Similarly, another entity faced severe repercussions, including a 2.1 million CNY fine, for underhandedly influencing market dynamics through bribes in the internet livestreaming sector.

Misuse of Technical Means for Competitive Advantage
Reflecting the evolving digital marketplace, the Beijing AMR penalized a company for manipulating online search results to divert traffic from a competitor to its own advantage. This misuse of technology resulted in a 150,000 RMB fine and a directive for immediate corrective action.

Discreditation of Competitors
In an alarming case of competitive sabotage, a wine company was found directing employees to undermine a rival's online reputation through false reviews, leading to a 200,000 RMB penalty.

Trade Secret Infringement
Echoing Beijing's initiative, the Shanghai AMR also disclosed significant cases, including one involving a former R&D engineer who misappropriated confidential information from his previous employer to benefit his current company. This breach underscored the critical importance of safeguarding trade secrets, a principle vigorously enforced by regulatory bodies.

These cases underscore the comprehensive scope of actions deemed unfair competition, ranging from deceptive marketing to the malicious manipulation of information. The actions taken by the AMRs not only reiterate the legal protections available to businesses but also serve as a stern reminder of the consequences of such malpractices. For entities navigating China's competitive landscape, understanding these precedents and the recourse available through AMRs is essential for safeguarding their interests and adhering to fair competition standards.

The authors would like to thank Yijie Jiang, Joyce Song and Yushuang Zhu for their assistance with the preparation of this article.

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