Anti-unfair Competition Law empowers SAIC enforcement against abuse

Nate Bush and Lining Shan
[email protected] and [email protected]

The 1993 PRC Anti-unfair Competition Law (AUCL) was among China's first reform-era laws targeting unfair trade practices, ranging from commercial bribery and false advertising to predatory pricing and tying. The AUCL lagged behind China's economic development, and the PRC Anti-monopoly Law (AML) eclipsed the AUCL as China's principal competition law in 2008. On February 25 2016, the State Council released for public comment draft revision of the AUCL, prepared by the State Administration of Industry and Commerce (SAIC). The SAIC handles violations of the AUCL as well as non-price related AML rules against monopoly agreements and abuse of dominance.  The draft eliminates many overlaps between the AML and the AUCL by deleting obsolete rules against predatory pricing and tying, abusive practice by utilities and state businesses, and administrative monopoly. At the same time, it could dramatically expand the SAIC's authority by creating a new offense: “abuse of a relative advantageous position.”