Abstract：To study the competition strategies ofordinary product company and eco-label product company with label fraud, this study constructs a simultaneous game pricing model for duopoly competition, and analyzes the impact of factors such as the level of violation, audit level, penalty for violation and consumers’ preference for eco-labels on competition strategies. The research results show that the high environmental quality cost, high regulation audit level and high penalty of label fraud can restrain companies from violating regulations, and consumers’ higher preference to the eco-labels gives companies greater incentives to choose eco-label fraud. Therefore, the regulator should increase the production access standards for eco-labeled products, expose the regulatory results to reduce opaque information, and choose effective audit level based on eco-label environmental quality cost and violation penalty to suppress violations.
