Governing Science and Technology under the International Economic Order
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Governing Science and Technology under the International Economic Order

Regulatory Divergence and Convergence in the Age of Megaregionals

Edited by Shin-yi Peng, Han-Wei Liu and Ching-Fu Lin

Against the backdrop of the recent trend towards megaregional trade initiatives, this book addresses the most topical issues that lie at the intersection of law and technology. By assessing international law and the political economy, the contributing authors offer an enhanced understanding of the challenges of diverging regulatory approaches to innovation.
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Chapter 16: Internet-related unfair competition: The impact of treaties and challenges for mainland Chinese law and jurisprudence

Shujie Feng


Among the various revolutions brought by the marriage of Internet and globalization, the revolution regarding business models and competition behaviors is the most remarkable. The use of technological methods for the attraction of consumers in virtual space has created a new landscape of competition. While countries have labored to find solutions in front of the new challenges, international treaty rules should be duly taken into account. Up until now, the Paris Convention is still the unique and basic international treaty which treats the subject of unfair competition. While most FTAs are silent in this regard, the EU Unfair Commercial Practices Directive and TPP have developed the consumer protection dimension to international anti-unfair competition law. Chinese courts and legislators are trying to work out a solution in the application of the general clause of the PRC Anti-Unfair Competition Law in Internet related cases, but they have much difficulty in establishing a reliable methodology of law interpretation or a consistent jurisprudence: some consider legitimate interests of plaintiffs are necessary; some consider it suffices to analyze directly the behavior of defendants; some define the limits of competitors’ behavior in terms of necessity of public interests, etc. In the construction of the Chinese autonomous legal concept of unfair competition, the Paris Convention, EU Unfair Commercial Practice Directive, and the TPP can yield important insight on national law. The general clause prohibiting unfair competition and the definition of three typical categories of unfair acts (acts creating confusion, acts discrediting competitors, and acts misleading consumers) in the Paris Convention, as well as the detailed provisions on fraudulent and deceptive activities in the EU Directive, provide constructive and operational reference in this respect. However, other categories of unfair competition acts need still be defined through the interpretation of honest practice and bad faith in view of the ethical and economic norms of Chinese society. Concerning the development of international law, it seems impossible to give more detail to the general clause of Article 10bis(2) of the Paris Convention except the addition of consumers’ welfare as another objective, but more convergence may be possible.

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