Unfair competition

In this society, the development of economic is rapid. So competition becomes inevitable. It plays a regulatory function in balancing demand and supply. In this case, unfair competition arises at the historic moment. Unfair competition means unjust and often illegal attempt to gain unfair competitive advantage through false, fraudulent, or unethical commercial conduct. Examples include below-cost selling, counterfeiting or imitation, dumping, misleading advertising, rumor mongering, trademark or trade secret infringement.

There is no doubt that these actions will bring loss to consumer. But the victims not only consumer but also include the production of value chain that has transverse relation and the suppliers that has longitudinal relation. So every country take the corresponding measures to curb unfair competition behavior. Making Anti Unfair Competition Laws is the most important way to restrain the unfair competition acts, but the construction of china’s competition legal system starts late. So compared with other countries we are lack of experience, both in legislation or in law enforcement.

In addition to ordinary enterprises acts of unfair competition, it mainly divided into state-owned enterprises vs private enterprises and domestic enterprises vs foreign enterprises. The unfair competition between the state-owned enterprises and the private enterprises is a important problem. It has aroused the domestic and foreign experts attention. We can’t deny the state-owned enterprise has its necessity. It can be used to remedy the market defect or as the development strategic national industry. But the state have to cancel the unfair competition between the state-owned enterprises and private enterprises.

Unfortunately, we have not, like industry access, lending discrimination, the use of national capital and market dispute and so on. ( according to Zhao H. Z. 2012. May). In addition, Mazzolini Offers some types that SOEs do indeed enjoy special advantages over private firms: First, they are under less pressure to pay dividends. Second, they have implicit government backing and can thus raise debt capital more readily. Third, they have preferential access to state financing. Fourth, they receive more or less disguised subsidies or outright grants. Fifth, they have quasi-captive markets at home.

Sixth, they enjoy preferential procurement conditions. (according to Mazzolini, R ,1980). Some claim that such companies enjoy unfair advantages over private business and that they will eventually undermine the market position of private sector enterprises in many areas. All enterprises need to stand on the same starting line, to fair competition. Other form about the acts of unfair competition occurs between domestic enterprises and foreign enterprises. This problem deserve more and more concern in the recently.

It is mainly reflected in the dumping. dumping” is a kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market competition. For dumping, the world pay wide attention and many countries have adopted corresponding measures.

Beginning in 1980, the use of antidumping duties—special import tariffs that are used to raise the price of “dumped”goods—came to be a common practice in conducting trade policy among the U. S. , the European Union (EU), Canada, and Australia. While only a handful of antidumping cases were initiated worldwide in the 1950s, 1960s, and 1970s, more than 1,600 cases were filed during the 1980s. Of these, the vast majority were filed by the tradition-al users—the U. S. , the EU, Canada, and Australia. However, prior to the advent of the World Trade Organization (WTO) in 1995, the use of antidumping protection began to spread to developing countries, most notably India, Mexico, Brazil, and South Africa. (according to Crowley, M. 2004).

The following is an example show that in today’s world, dumping and anti-dumping struggle intensified. In the first week of February, 2010, the world’s three largest trading entities’ all became directly involved in anti-dumping disputes before the World Trade Organization (W. T. O. ). China alleged that the European Union had improperly imposed anti-dumping duties on China’s footwear exports, while Vietnam alleged that the United States had imposed the same type of protectionist tariffs on its imported shrimp. (according to Bolton, R. M. 2011).

Thus, facing the unfair competition, all the world give extensive attention. This manifest that it will brings great influence to the economy and the market. First of all, unfair competition influence and hinder the development of social production. Unfair competitors put the utility-seeking activities on producing and selling fake. That is not conducive to the progress of science and technology. Under the condition of market economy, market demand dropping will influence the evolution of production. Secondly, unfair competition lead to the market transaction cost increasing, economy runs benefit to reduce.

From the point of seller’s view, in the face of a full of fake and shoddy products market, they must pay more attention to prevent inferior products false excellence of their products, one way is to increase the cost of making anti-fake mark. From the point of buyer’s view, they should adopt countermeasures, such as circumspect selection, analysis the packaging, judge the authenticity, these will increase the nervous and mental fatigue. Some buyers will leave the market, it will make the trade barriers increasing.

This situation will lead the cost of market operation increasing, the benefit of the market operation dropping. Third, it caused serious waste of resources and loss of society. Producing fake also need to throw manpower and material resources. But the products is not qualified products, or is harmful products. Fourth, unfair competition, especially market fraud damaged the the rights and interests of consumers. We can use the following several cases to understand. First case is about mixing of Sudan 1 with red chilli export. This is a typical case of unfair competition.

Chilli powder is priced very high in the market for its biting pungency and red colour. As Sudan 1 is a cheap red dye which can significantly brighten up the red colour of chilli powder, that too at a very low cost (Sudan 1 costing US $5 can increase the price of chilli powder from US $600 to US $1200 per tonne), there exists enough motive for exporters to add crushed discoloured cheap chilli and sell it at a higher price. For this event, governments take the mandatory testing, because of the developed countries give top priority to the health of their citizens.

The laws with respect to items of food are meant to protect the consumers from food of inferior quality, or those which are likely to be contaminated by impurities or poisonous substances. Therefore, it is important that the product conforms to the quality standards demanded by the importing country so that this neither results in loss of market nor damages the country’s reputation. (according to Gupta, A. , & Gautam, A. 2008). In addition to selling fake, another damaging the interests of consumers act is false advertising.

In china’s ChengDu city, SanSheng condiment factory want open product market, so they published an advertisement “Tomorrow you can get vinegar without money” in the “Sichuan Chengdu Daily” and “Evening News”. The second ad claimed “please take this advertisement to designated mall on December 7th – 9th to receive a bottle of vinegar. One newspaper can change one bottle of vinegar! ” In this activity, this condiment factory put the quantity of vinegar on the market which present as gift are less than and the number of two newspapers circulation.

In this case, the advertisement belong to false advertising. It is inconsistent with the facts, make people think that holding a newspaper can receive a vinegar. Therefore, this behavior belong to unfair competition. (according to Qi G, 2010) The formulation and implementation of different competition regulations can encourage and protect fair competition order and make the operation of economic system is stable and efficient. Competition law is the most effective competition regulations. But below the different economic systems, different laws have their respective advantages and defects.

In today’s society, the Germany’s and Japan’s competition law legal liability system are deemed to be effective. First, we analyse the Germany’s Competition Law. The German “Anti-unfair competition”set dual punishment system, means the unfair competition behavior should bear civil liability and criminal liability. Germany has one of the world’s most active antitrust programme. Its legal basis is the Law against Restraint of Competition. The GWB prohibits horizontal agreements and controls vertical agreements that restrict competition and abuse a dominant market position.

It forbids concerted practices, establishes preventive and retroactive controls for mergers, and bans resale price maintenance. The other important law in this area is the Law against Unfair Competition. which was completely revised in 2004. It lifted most limitations on the ability of companies to offer rebates, and they no longer need to confine special sales to certain periods at the end of the winter and summer seasons. The law prohibits misleading advertisements and the exploitation of children’s lack of experience.

It lso prohibits telephone marketing and unsolicited online advertisements (spam) unless customers agree to receive them (through an opt-in clause). In December 2008 an amendment to the Law against Unfair Competition came into force that introduced a so-called blacklist of unlawful business practices. These include the following: using false claims of being a signatory to a certain code of conduct; using price reductions because of closure as bait when no business cessation is intended; or describing a product as free, even though other costs are involved.

Together with state officials, the Federal Cartel Office is responsible for implementing Germany’s antitrust rules. (according to Competition policy. 2011). To make a comprehensive survey, the German anti-unfair competition law direct criminal liability provisions. There is no requirement in the plot elements and the behavior results. As long as there is an act of unfair competition, criminal responsibility person shall be investigated. It bring the legal deterrent effect into play. Competition law in Japan already has a history of sixty-two years.

It was originally initiated under the heavy influence of U. S. antitrust laws, but at the same time, it was equipped with fairness-oriented regulations, that is, unfair trade practice regulations. The resulting mix of orthodox antitrust principles and fairness-oriented regulations has complicated the application and enforcement of the Antimonopoly Act. As to sanctions, the U. S. influenced criminal penalties were later mixed with European influenced surcharges. This mix contributed to the sometimes inconsistent ways of enforcing the Antimonopoly Act.

The Fair Trade Commission of Japan (JFTC),an independent competition agency, has greatly contributed to developing and strengthening the Antimonopoly Act and its enforcement, particularly through rejection of an industrial policy (or public interest) interpretation of the AMA. In recent years, courts have increasingly come to play a role as important as that of the JFTC by introducing new ideas for the application of the AMA, including private action suits as well as those for nullification of JFTC decisions.

Sanctions against violations have been considerably strengthened through increases in the amount of surcharges levied. (according to Takigawa, T. 2009). Japan’s law against unfair competition acts take the model that the main principle is civil relief and the criminal sanctions is complementary principle. According to the above analysis, we can contrast them with China’s competition law. China’s competition legal system construction starts late, compared with Japan’s and Germany’s, it lack of enough experience both in legislation and in law enforcement.

China’s anti unfair competition law takes a different model with German’s legal control mode. It use the administrative to control, and supplemented by the judicial controlling. The rule of legal responsibility, the administrative legal liability hold a large proportion, the provisions of civil liability and criminal liability relative to less. In this law there don’t have a clear and direct provision of criminal responsibility, but according to the relevant provisions of the criminal law shall be prosecuted for criminal responsibility.

Such provisions are not to increase the penalties for acts of unfair competition and it will be difficult to maintain the order of market competition. To sum up, unfair competition has become the major problem we have to face in the market. Anti-Unfair Competition Law as the legal system of economy market has an important position , we should learn the experience from other countries to make the necessary amendments and supplements. Through strengthen penalities and detailing punishment measures to perfect the legal system and market competition behavior. In the future we will establish a good and fair market environment.