In 1992, the 14th National Congress of the Communist Party of China put forward that the goal for China's economic system reform is to establish a socialist market economic regime. In 1993, Law of the People's Republic of China Against Unfair Competition (Anti - Unfair Competition Law), known as the "economic constitution," was enacted and adopted. At that time, the market economic regime reform has just begun and China’s legislators had extremely limited knowledge of the prejudgment in terms of competition situation, and as a result, Anti- Unfair Competition Law stipulates only 11 kinds of unfair competition acts. The past two decades has witnessed rapid progress in China’s market economic development and competition situation, and few acts stipulated in Anti-Unfair Competition Law have still existed up to the present. Therefore, there have been no corresponding articles in specific provisions of Anti- Unfair Competition Law for most unfair competition acts which have been occurred in practice, and this phenomenon has been more striking in cases related to the Internet. According to the statistics from Survey Report of Beijing Municipality Haidian District People's Court on the Cases of Unfair Competition in the Network (2012-2016), new types of unfair competition acts which can not be included in the specific cause of action can only be heard under the cause of "other unfair competition disputes" acts, and they have accounted for 63% of all cases involved in unfair competition through the network. Under the circumstances that Anti- Unfair Competition Law has no clear provisions in this regard and the legislature has made no amendments to Anti-Unfair Competition Law over the past two decades, the courts have to hear cases in accordance with Article 2 of Anti-Unfair Competition Law which provides that "A business operator shall, in his market transactions, follow the principles of voluntariness, equality, fairness, honesty and credibility and observe the generally recognized business ethics." Anti-Unfair Competition Law might have been the sole law whose principal article has been abided by the court to hear numerous cases for a long period of time in China. Anti-Unfair Competition Law might be or already is case law if a habit is established to follow the suit.
I. Incomplete Anti-Unfair Competition Law can not satisfy all the needs of judicial practice Administrative departments for industry and commerce are in charge of administration and management of unfair competition acts. However, there should be no action made by administrative agencies in the lack of clear empowerment under statute. Therefore, no administrative penalty shall be imposed by administrative departments for industry and commerce against unfair competition conducted by administrative counterpart according to Article 2, and administrative management shall only be made for the 11 kinds of unfair competition acts which are provided for in the specific provisions. With the change of times and situations, the above 11 kinds of unfair competition acts rarely occurs in practice. The law enforcement powers for these agencies have been limited to the 11 kinds of unfair competition acts under Anti-Unfair Competition Law and there have been no law to regulate a large number of new types of unfair competition acts in practice, which makes Anti-Unfair Competition Law incomplete for these agencies to implement. Anti- Unfair Competition Law is extremely important for the maintenance of economic order as the "economic constitution”. However, an incomplete Anti-Unfair Competition Law can only be used to maintain a basically stable or not essentially instable market economy to the greatest extent. Due to the timely lack of amendment to Anti-Unfair Competition Law over the past two decades, law enforcement agencies can not give full play to their administrative functions in order to achieve a long-term stable market economy in China.
II. The application of Article 2 of Anti-Unfair Competition Law is "judge-made law" in essence, which should not be a matter of common practice
The application of Article 2 of Anti-Unfair Competition Law is the reason that there has been no chaos for China’s market economy although there has been no amendment to Anti-Unfair Competition Law over the past two decades. Although the administrative departments can not handle cases according to Article 2, the court can not refuse to render a judgment on the ground that there is no clear provision under Anti- Unfair Competition Law. On the contrary, the court can hear cases according to Article 2. As a result, a large number of cases have rushed to the court because there have no remedies in terms of administrative procedure. China’s courts have done their best to maintain market economy over the past two decades through their numerous application of Article 2. However, the key for such application is the court’s interpretation of "the generally recognized business ethics". The court must make an enough explanation and reasoning by application of abstract legal principles to specific cases in order to conclude whether an act violates "the generally recognized business ethics" or not. If the judge renders a judgment that an act constitutes unfair competition act, a specific rule is established therein. For example, the Beijing Higher People's Court established a rule of "non-public and unnecessary interference" in the case of Baidu v. Qihoo against the latter’s unfair competition by plug-in mark; the Beijing First Intermediate People's Cou