Interim Provisions on Regulating Sales Promotions
Interim Provisions on Regulating Sales Promotions
Interim Provisions on Regulating Sales Promotions
Order of the State Administration for Market Regulation No.32
October 29, 2020
Chapter I General Provisions
Article 1 The Provisions are formulated in accordance with the Anti-Unfair Competition Law of the People's Republic of China (the "Anti-Unfair Competition Law"), the Pricing Law of the People's Republic of China (the "Pricing Law"), the Law of the People's Republic of China on the Protection of Consumer Rights and Interests (the "Law on the Protection of Consumer Rights and Interests") and other relevant laws and administrative regulations, in order to regulate sales promotions of operators, maintain a market order of fair competition, and protect the legitimate rights and interests of consumers and operators.
Article 2 Operators shall comply with the Provisions when conducting promotions by means of prize-giving sales, prices and free trials within the territory of the People's Republic of China for the purpose of selling products or providing services (the "products" including providing services) or achieving competitive advantages.
Article 3 Administrations for market regulation at or above the county level shall supervise and inspect the sales promotions of operators in accordance with the law, and impose administrative punishments for violations of the Provisions.
Article 4 The State encourages, supports and protects all organizations and individuals in the exercise of social supervision of illegal activities in sales promotions.
Chapter II General Regulations on Sales Promotions
Article 5 Operators, when conducting sales promotions, shall indicate the relevant information in a true, accurate, clear and conspicuous manner, and shall not deceive or mislead consumers or the relevant public (the "consumers") through false or misleading commercial promotions with false commercial information or fictional transactions or evaluations.
Article 6 If an operator makes a preferential commitment by such means as commercial advertisements, product description, recommendation by a salesman, physical samples or notices, statements, and notifications at the place of business, it shall fulfill such commitment.
Article 7 Where the providers of trading places (the "Providers of Trading Places"), such as operators of outlets, shopping malls, marketplaces and e-commerce platforms, organize unified sales promotions among operators in their places (or on their platforms), they shall work out the appropriate plans, publicly announce the rules for and duration of sales promotions, as well as what restrictive conditions will be considered disadvantageous to consumers, and give operators in their places (or on their platforms) the notes regarding sales promotions.
Article 8 Where the Providers of Trading Places find out that any operator in their places (or on their platforms) has committed an illegal act in the unified sales promotions, they shall take necessary measures to deal with the same in accordance with the law, keep the relevant information records, assume the corresponding obligations and liabilities in accordance with the law, and assist the related administration for market regulation to investigate and handle the illegal act.
Article 9 An operator shall not bribe others with property or by other means in the name of promotion in order to seek trading opportunities or competitive advantages.
Article 10 The prizes or complimentary gifts provided by an operator in sales promotions shall be in line with the relevant provisions of the State. Infringing or unqualified products and commodities that are eliminated and prohibited for sale by the State with clear orders shall not be used as prizes or complimentary gifts.
If the State has enacted certain provisions which prohibit the promotion of commodities, such provisions shall prevail.
Chapter III Regulations on Prize-giving Sales
Article 11 For the purpose of the Provisions, the term "prize-giving sales" refers to the practices in which an operator, for the purpose of selling products or achieving competitive advantages, provides monetary rewards, valuables or other interests for consumers, which include such types as lottery-attached sales and prize-attached sales.
Lottery-attached sales refer to the practices in which an operator adopts such accidental or uncertain methods as drawing lots, picking winning numbers and competitions to determine whether consumers can win prizes.
Prize-attached sales refer to the practices in which an operator provides monetary rewards, valuables or other interests for consumers who meet certain conditions.
The Provisions shall not apply to prize-giving fundraising or other lottery sales activities approved by the government or the relevant government departments in accordance with the law.
Article 12 Where operators incidentally provide valuables, monetary rewards or other interests for the purpose of promoting mobile clients, soliciting customers, increasing visibility, obtaining traffic, or increasing the click rate of users, such behaviors will be regarded as a prize-giving sale referred to herein.
Article 13 An operator shall, before a prize-giving sale, expressly make public such information as the prize type, participation conditions and methods, time and ways of winner disclosure, amount of monetary rewards or price of prizes, name, type and quantity of prizes, winning probability, conversion time, conditions and methods, delivery methods of prizes, conditions for renouncement, as well as the name and contact information of the sponsor, which shall not be changed, and no more conditions shall be added to affect the conversion, except for those which are beneficial to consumers.
During the prize-giving sale where the prize-winning results will be revealed immediately on the premises, information on a claimed prize worth over CNY500 shall be made public immediately.
Article 14 Where the prize is in the form of credits, gift coupons, exchange certificates and cash coupons, exchange rules, use scope, effective period, the relevant restrictive conditions and other details shall be made public; if it is necessary to exchange with any other operator, the name of such operator, exchange place or exchange way shall be made public.
Article 15 The following dishonest practices involving falsely claiming to offer prize-giving sales are banned when operators conduct prize-giving sales:
1. fabricating the prize items, prizes or the amount of monetary rewards;
2. placing prizes only in specific areas of the scope of the activity;
3. intentionally not or partially putting the commodities and lottery tickets with the prize-winning tokens on the market during the activity;
4. putting the commodities and lottery tickets with tokens containing different amounts of monerary rewards or different prizes on the market at different times;
5. failing to disclose winners according to the information clearly indicated to consumers; and
6. other ways involving falsely claiming to offer prize-giving sales.
Article 16 Operators, when conducting prize-giving sales, shall not adopt such deceptive methods as having internal staff, designated entities or individuals win prizes, to intentionally let designated persons win the prize.
Article 17 The amount of the highest prize for a lottery-attached sale shall not exceed CNY50,000. Under any of the following circumstances, it will be considered that the said amount exceeds CNY50,000:
1. any one of the winners has a maximum prize of more than CNY50,000 in the case of multiple winners of the highest prize;
2. the total prize amount exceeds CNY50,000 where the same lottery ticket or purchase of commodities once provides two or more chances of winning the prize;
3. where prizes are offered in such forms as the right to use a certain object or a particular type of service, the market price of such right or service is higher than CNY50,000;
4. where prizes are offered in such forms as equipment and accounts for an online game or other online virtual items, the market price of such item is higher than CNY50,000;
5. prizes are offered in the form of price reduction, preferential treatment or discounts, with a converted price of more than CNY50,000;
6. prizes are offered in the form of lottery tickets or raffle tickets, with a possible maximum amount of more than CNY50,000;
7. where prizes are offered in the form of providing employment opportunities or hiring as consultants, with rewards set up by means of salary payment, the maximum prize amount exceeds CNY50,000; or
8. the highest prize amount exceeds CNY50,000 in a lottery-attached sale in other forms.
Article 18 Where an operator takes a non-cash object or other interests as a prize, the value of such object or interests shall be calculated according to the prices of the same types of products on the market in the same period of time.
Article 19 Operators shall establish archives which shall be properly preserved for two years to record such information as the rules for prize setting, publicity information, conversion of prizes, and winners in a truthful, accurate and complete manner, and accept supervision and inspection in accordance with the law.
Chapter IV Regulations on Price Promotions
Article 20 If an operator imposes additional conditions for a price promotion it carries out, or conducts price promotions in the form of price reduction or discount within a time limit, it shall clearly indicate such conditions or time limit.
Article 21 If an operator claims a discount or price reduction, it shall indicate or express in a manner facilitating consumer cognition the benchmark price for the discount or price reduction.
Otherwise, the discount or price reduction shall be calculated based on the lowest transaction price of the same operator within seven days prior to such price promotion in the same business premises.
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Order of the State Administration for Market Regulation No.32
October 29, 2020
Chapter I General Provisions
Article 1 The Provisions are formulated in accordance with the Anti-Unfair Competition Law of the People's Republic of China (the "Anti-Unfair Competition Law"), the Pricing Law of the People's Republic of China (the "Pricing Law"), the Law of the People's Republic of China on the Protection of Consumer Rights and Interests (the "Law on the Protection of Consumer Rights and Interests") and other relevant laws and administrative regulations, in order to regulate sales promotions of operators, maintain a market order of fair competition, and protect the legitimate rights and interests of consumers and operators.
Article 2 Operators shall comply with the Provisions when conducting promotions by means of prize-giving sales, prices and free trials within the territory of the People's Republic of China for the purpose of selling products or providing services (the "products" including providing services) or achieving competitive advantages.
Article 3 Administrations for market regulation at or above the county level shall supervise and inspect the sales promotions of operators in accordance with the law, and impose administrative punishments for violations of the Provisions.
Article 4 The State encourages, supports and protects all organizations and individuals in the exercise of social supervision of illegal activities in sales promotions.
Chapter II General Regulations on Sales Promotions
Article 5 Operators, when conducting sales promotions, shall indicate the relevant information in a true, accurate, clear and conspicuous manner, and shall not deceive or mislead consumers or the relevant public (the "consumers") through false or misleading commercial promotions with false commercial information or fictional transactions or evaluations.
Article 6 If an operator makes a preferential commitment by such means as commercial advertisements, product description, recommendation by a salesman, physical samples or notices, statements, and notifications at the place of business, it shall fulfill such commitment.
Article 7 Where the providers of trading places (the "Providers of Trading Places"), such as operators of outlets, shopping malls, marketplaces and e-commerce platforms, organize unified sales promotions among operators in their places (or on their platforms), they shall work out the appropriate plans, publicly announce the rules for and duration of sales promotions, as well as what restrictive conditions will be considered disadvantageous to consumers, and give operators in their places (or on their platforms) the notes regarding sales promotions.
Article 8 Where the Providers of Trading Places find out that any operator in their places (or on their platforms) has committed an illegal act in the unified sales promotions, they shall take necessary measures to deal with the same in accordance with the law, keep the relevant information records, assume the corresponding obligations and liabilities in accordance with the law, and assist the related administration for market regulation to investigate and handle the illegal act.
Article 9 An operator shall not bribe others with property or by other means in the name of promotion in order to seek trading opportunities or competitive advantages.
Article 10 The prizes or complimentary gifts provided by an operator in sales promotions shall be in line with the relevant provisions of the State. Infringing or unqualified products and commodities that are eliminated and prohibited for sale by the State with clear orders shall not be used as prizes or complimentary gifts.
If the State has enacted certain provisions which prohibit the promotion of commodities, such provisions shall prevail.
Chapter III Regulations on Prize-giving Sales
Article 11 For the purpose of the Provisions, the term "prize-giving sales" refers to the practices in which an operator, for the purpose of selling products or achieving competitive advantages, provides monetary rewards, valuables or other interests for consumers, which include such types as lottery-attached sales and prize-attached sales.
Lottery-attached sales refer to the practices in which an operator adopts such accidental or uncertain methods as drawing lots, picking winning numbers and competitions to determine whether consumers can win prizes.
Prize-attached sales refer to the practices in which an operator provides monetary rewards, valuables or other interests for consumers who meet certain conditions.
The Provisions shall not apply to prize-giving fundraising or other lottery sales activities approved by the government or the relevant government departments in accordance with the law.
Article 12 Where operators incidentally provide valuables, monetary rewards or other interests for the purpose of promoting mobile clients, soliciting customers, increasing visibility, obtaining traffic, or increasing the click rate of users, such behaviors will be regarded as a prize-giving sale referred to herein.
Article 13 An operator shall, before a prize-giving sale, expressly make public such information as the prize type, participation conditions and methods, time and ways of winner disclosure, amount of monetary rewards or price of prizes, name, type and quantity of prizes, winning probability, conversion time, conditions and methods, delivery methods of prizes, conditions for renouncement, as well as the name and contact information of the sponsor, which shall not be changed, and no more conditions shall be added to affect the conversion, except for those which are beneficial to consumers.
During the prize-giving sale where the prize-winning results will be revealed immediately on the premises, information on a claimed prize worth over CNY500 shall be made public immediately.
Article 14 Where the prize is in the form of credits, gift coupons, exchange certificates and cash coupons, exchange rules, use scope, effective period, the relevant restrictive conditions and other details shall be made public; if it is necessary to exchange with any other operator, the name of such operator, exchange place or exchange way shall be made public.
Article 15 The following dishonest practices involving falsely claiming to offer prize-giving sales are banned when operators conduct prize-giving sales:
1. fabricating the prize items, prizes or the amount of monetary rewards;
2. placing prizes only in specific areas of the scope of the activity;
3. intentionally not or partially putting the commodities and lottery tickets with the prize-winning tokens on the market during the activity;
4. putting the commodities and lottery tickets with tokens containing different amounts of monerary rewards or different prizes on the market at different times;
5. failing to disclose winners according to the information clearly indicated to consumers; and
6. other ways involving falsely claiming to offer prize-giving sales.
Article 16 Operators, when conducting prize-giving sales, shall not adopt such deceptive methods as having internal staff, designated entities or individuals win prizes, to intentionally let designated persons win the prize.
Article 17 The amount of the highest prize for a lottery-attached sale shall not exceed CNY50,000. Under any of the following circumstances, it will be considered that the said amount exceeds CNY50,000:
1. any one of the winners has a maximum prize of more than CNY50,000 in the case of multiple winners of the highest prize;
2. the total prize amount exceeds CNY50,000 where the same lottery ticket or purchase of commodities once provides two or more chances of winning the prize;
3. where prizes are offered in such forms as the right to use a certain object or a particular type of service, the market price of such right or service is higher than CNY50,000;
4. where prizes are offered in such forms as equipment and accounts for an online game or other online virtual items, the market price of such item is higher than CNY50,000;
5. prizes are offered in the form of price reduction, preferential treatment or discounts, with a converted price of more than CNY50,000;
6. prizes are offered in the form of lottery tickets or raffle tickets, with a possible maximum amount of more than CNY50,000;
7. where prizes are offered in the form of providing employment opportunities or hiring as consultants, with rewards set up by means of salary payment, the maximum prize amount exceeds CNY50,000; or
8. the highest prize amount exceeds CNY50,000 in a lottery-attached sale in other forms.
Article 18 Where an operator takes a non-cash object or other interests as a prize, the value of such object or interests shall be calculated according to the prices of the same types of products on the market in the same period of time.
Article 19 Operators shall establish archives which shall be properly preserved for two years to record such information as the rules for prize setting, publicity information, conversion of prizes, and winners in a truthful, accurate and complete manner, and accept supervision and inspection in accordance with the law.
Chapter IV Regulations on Price Promotions
Article 20 If an operator imposes additional conditions for a price promotion it carries out, or conducts price promotions in the form of price reduction or discount within a time limit, it shall clearly indicate such conditions or time limit.
Article 21 If an operator claims a discount or price reduction, it shall indicate or express in a manner facilitating consumer cognition the benchmark price for the discount or price reduction.
Otherwise, the discount or price reduction shall be calculated based on the lowest transaction price of the same operator within seven days prior to such price promotion in the same business premises.
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