Price Obligations of Business Operators

(1) Obligation to abide by the law: Business operators shall abide by laws and regulations when conducting pricing acts and exercising their power, which is the most fundamental obligation of business operators.
(2) Obligation to implement government administrative actions in terms of pricing: It refers to the obligation of business operators to comply with the government referential pricing or government pricing established in accordance with the law, not to set or adjust prices beyond their authority or without authorization, and comply with the statutory price intervention measures and emergency measures. Any violation of such obligations will be deemed illegal pricing acts.
(3) Obligation to clearly mark prices: Prices must be clearly marked by means of price tags or price lists. The requirements of complete price tag and price list, accurate pricing, clear wording, alignment of goods and tags, one tag for each item, and eye-catching labeling should be satisfied, price tags should be replaced in a timely manner in case of price change, and any amount in RMB should be indicated in Arabic numerals.
(4) Obligation not to commit unfair pricing acts.
Unfair pricing act is also a form of unfair competition, which is prohibited not only by the Pricing Law but also by the Anti-Unfair Competition Law. According to Article 14 of the Pricing Law, a business operator shall not commit any of the following unfair pricing acts:
① To manipulate market prices by collusion with each other, resulting in damages to the legitimate rights and interests of other business operators or consumers. Such an act means the collusion and collaboration of two or more business operators to jointly operate and illegally monopolize prices. The purpose of illegally monopolizing prices is to drive prices up or stabilize high prices, which limits normal price competition, damages the interests of other business operators, increases consumer spending, and damages consumer interests.
② To dump at prices lower than the costs in order to exclude competitors or monopolize the market, except for handling fresh, seasonal, or overstocked goods in accordance with the law. Low-price dumping restricts normal price competition, aiming at increasing the prices after weakening, expelling, or destroying competitors and monopolizing the market. So it is a phased act that ultimately damages the interests of consumers.
③ To fabricate and spread information about price increases or bid up prices to drive prices up too high. It is an act of using the consumers' worries about price increases, fabricating and disseminating false information to stimulate purchases, and taking advantage of the opportunity to raise prices to obtain unfair benefits.
④ Pricing fraud (or false price representation). Pricing fraud refers to the act of inducing consumers or other business operators into trading by using false or misleading pricing means. Generally, it is manifested as follows: False price reduction, that is, falsely claiming a price reduction without actually reducing the price, such as sales at a "lower price" or "discount" on the basis of a fabricated original price, or deceiving consumers by falsely claiming a distress price or lowest price; Attracting buyers with low prices and ultimately settling at high prices; Ambiguous price marking, that is, using misleading language, graphics, etc., to induce consumers to purchase goods at prices which consumers believe are lower, preferential, distress, or discount prices, which is also a fraud act. For example, declaring "10% discount for all products" or using fuzzy pricing units.
⑤ Price discrimination. Price discrimination means the charging of discriminating prices against other business operators for the provision of goods or services with the equal transaction conditions. It is a monopolistic pricing act in nature and a pricing strategy for business operators with monopolistic advantages to obtain unfair excess profits through differential pricing. Price discrimination places buyers with equal conditions in an unequal position, undermining the principle of fair dealing.
⑥ To disguisedly raise or lower prices to an irrational extent by means of raising or lowering grades of goods or services or otherwise.
⑦ Illegal profiteering. Profiteering refers to the huge profits obtained by business operators through improper means in a relatively short period of time. Profiteering acts deviate from value, distorts the relationship between price and value, undermines the principle of fair competition, and damages the interests of consumers. The Interim Provisions on Prohibition of Exorbitant Profits requires that the price level, price difference rate, and profit margin of a product or service shall not exceed the reasonable range of the average market price, price difference rate, and profit margin of the same product or service in the same region and period and of the same grade, unless the profit is achieved by higher profit margin through improving business management, applying new technologies, reducing costs, and improving efficiency.
⑧ Other unfair pricing acts prohibited by laws and administrative regulations. Whether a pricing act is unfair depends on its purpose, means, and effect.
In China, price restrictions are not classified as unfair pricing acts. Price restriction refers to an agreement and the acts thereunder by which one business operator instructs the other party to sell the relevant goods only at a fixed price, and is also known as "vertical price fixing", "vertical price constraint" or "resale price maintenance". It restricts the price competition among retailers and is banned in western countries. However, due to the imperfect market economy and unbalanced regional development in China, consumers often cannot obtain sufficient information to make judgments. Therefore, the "national unified retail price" to restrain the improper acts of intermediaries and retailers is conducive to stabilizing the market and protecting consumer rights.