Dear lawyer, I have a fashion store in Guangzhou that mainly sells T-shirts and autumn-winter items. For a while, due to grasping the trend and coming to winter, I imported winter sweaters and jackets for sale. Seeing that I was a good seller and very popular, the store next door came to cause trouble, criticized my goods and spoke ill of our products about their reputation and poor quality. I would like to consult a lawyer on “The harms of unfair competition in Vietnam”
Legal basis
- Civil Code 2015;
- Competition Law 2018
Unfair competitive behavior
Competitive behavior of enterprises in the business process
This feature represents the provisions on the subject of application of the Competition Law. Accordingly, the subject of competition acts only includes enterprises of all economic sectors, cooperatives, individual business households, foreign enterprises operating in Vietnam, and industry associations. The remaining entities such as non-business units, consumer organizations, media units, non-economic organizations, etc. are not subject to the application of the provisions of the law on unfair competition. Sometimes, in reality, situations arise when some non-economic organizations, media units, etc. perform acts that infringe upon the right to fair competition of enterprises, for example, spreading dishonest information about enterprises industry and goods service…. With the limitation of the subject of conduct, competition law does not apply to handle the above situations. On the other hand, this feature also affirms that unfair competitive behavior occurs in business in all industries, all areas of economic life, and every stage of the business process. The law on unfair competition acts is applicable to all industries and all economic sectors. In other words, the law is not limited to applying to any profession, field or business activity of the national economy.
Competitive conduct that is contrary to good faith, honesty, commercial practice and normal standards of business ethics
This characteristic is the theoretical basis for determining the unhealthy nature of the behavior. However, “contrary to the norm of business ethics” is both a legal and theoretical abstraction. There are no specific legal or constitutive grounds for defining this feature. Therefore, the Competent Authority cannot use the concept of unfair behavior to attribute a specific behavior of an enterprise to be unfair. To overcome the above situation, competition law has focused on solving
The harms of unfair competition in Vietnam
– Generally accepted business practices are applied to conduct that is not foreseen by law as unfair competition. In other words, this basis is a backup measure to be applied to cases where the law has not yet provided for a specific act, but when this act is performed, it has infringed the competition rights of organizations other business individuals, legitimate interests of consumers and contrary to business practices. This basis has expanded the ability to adjust and overcome the outdated situation of competition law. To date, the Competition Law has not regulated which business practices are considered common ethical standards.
The contrary to normal business ethics of unfair competition requires the competition law to always be adjusted and supplemented to suit reality. Perception of specific unhealthy signs and manifestations is always changing and has differences according to specific conditions and circumstances as follows:
– The concept of unhealthyness is the result of related concepts related to the sociology, economics, or ethics of a given society, can lead to the phenomenon that competitive behavior is considered unfair competition in this country, but is considered fair in the country.
– In the market life, competitive acts are constantly being created in terms of forms of expression and competition methods, giving rise to new and colorful unfair competitive tricks, which are diverse and develop without interruption. Therefore, the scope of the concept of unfair competition must also always be supplemented by people’s awareness of the unfair nature of new behaviors.
– Currently, the competition laws of other countries and theories related to competition have not yet provided common standards for the soundness of competitive acts, but only based on the analysis of the consequences of such acts. competitive behavior for economic and social life to determine the health and expression level of such acts. As the market changes and develops, the perception of the influence of each behavior on the market also changes. At certain times, certain behavior may be dangerous to society, but at other times there are no conditions to harm competitors or consumers. That change has changed the scope of the concept of unfair competition.
Sanctions for handling unfair competition
Sanctions, forms of handling violations and remedies for unfair competition are specified in Article 110 and Article 111 of the Competition Law 2018, whereby:
– Principles of handling violations, forms of handling violations and remedial measures for violations of the competition law
1. Organizations and individuals that commit violations of the competition law shall, depending on the nature and seriousness of their violations, be disciplined, administratively sanctioned or examined for penal liability; if causing damage to the interests of the State, the lawful rights and interests of organizations and individuals, they must compensate for the damage according to the provisions of law.
2. For each act of violation of the competition law, the violating organization or individual shall be subject to one of the following main sanctioning forms:
a) Warning;
b) Fine.
3. Depending on the nature and seriousness of their violations, organizations and individuals violating the competition law may also be subject to one or several additional sanctions as follows:
a) Revoking the enterprise registration certificate or equivalent document, depriving the right to use the license or practice certificate;
b) Confiscation of material evidences and means used to violate the competition law;
c) Confiscate the profits earned from the commission of violations.
4. In addition to the sanctions prescribed in Clauses 2 and 3 of this Article, organizations and individuals that violate the competition law may also be subject to one or several of the following remedial measures. :
a) Restructuring enterprises that abuse their dominant market position or monopoly position;
b) Remove the illegal provision from the contract, agreement or business transaction;
c) Divide, split or resell part or all of the contributed capital and assets of the enterprise formed after the economic concentration;
d) Subject to the control of a competent state agency on the purchase and sale prices of goods and services or other transaction conditions in the contracts of enterprises formed after the economic concentration;
dd) Public rectification;
e) Other necessary measures to remedy the impact of the violation.
5. The Government shall detail the sanctioning forms and remedial measures for each act of violating the provisions of the law on competition.”
The fine levels for violations of the competition law are specified in Article 111 of the Competition Law 2018 as follows:
– Fines for violations of competition law
1. The maximum fine level for acts of violating regulations on anti-competitive agreements, abusing a dominant market position, or abusing a monopoly position is 10% of the total revenue of the enterprise committing the act. violations in the relevant market in the fiscal year immediately preceding the year in which the violation is committed, but less than the lowest fine for violations specified in the Penal Code.
2. The maximum fine level for acts of violating regulations on economic concentration is 05% of the total turnover of the violating enterprise on the relevant market in the fiscal year immediately preceding the year of committing the violation. .
3. The maximum fine for violations of regulations on unfair competition is VND 2,000,000,000.
4. The maximum fine for other acts of violating the provisions of this Law is VND 200,000,000.
5. The maximum fine levels specified in Clauses 1, 2, 3 and 4 of this Article apply to violations committed by organizations; for individuals with the same violation of competition law, the maximum fine level is one-half of the maximum fine level for organizations.
6. The Government shall detail the fine levels for acts of violating the provisions of this Law.”
As for the form of fine, Clause 3, Article 111 of the Competition Law 2018 clearly states that: “The maximum fine for acts of violating regulations on unfair competition is VND 2,000,000,000.
– Within 90 days, the Director of the Competition Administration Department shall issue a decision to handle the unfair competition case. Forms of handling violations of unfair competition acts:
– Warning;
– Monetary fine.
– Withdrawal of the business registration certificate; deprivation of the right to use licenses or practice certificates;
– Confiscation of material evidences and means used to commit the violation, including the profit earned from the violation.
– One or several remedial measures may be applied:
+ Forcible restructuring of enterprises that abuse their dominant market position;
+ Forcible division or separation of the merged or consolidated enterprise; forced to resell the part purchased by the enterprise;
+ Forced public rectification;
+ Forcible removal of illegal provisions from contracts or business transactions;
+ Forcible use or resale of inventions, utility solutions, industrial designs that have been purchased but not used;
+ Forcible removal of measures that prevent or restrain other enterprises from entering the market or developing their business;
+ Forcible restoration of technical and technological development conditions that enterprises have hindered;
+ Forcible removal of adverse conditions imposed on customers;
+ Forced reinstatement of the changed contract terms without good reason;
+ Forced reinstatement of a canceled contract without a valid reason.
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Please see more
- Unfair competition under Vietnam law
- Conditions to participate in property auctions in Vietnam
- Liability to compensate for damage arising in Vietnam
Frequently asked questions
Unfair competition addresses cases in which consumers have been deceived or deceptive commercial practices, as well as practices designed to limit or alter a company’s revenue. This is an action that can and should be subject to civil liability before the court. Some forms of unfair competition are also crimes.
Unfair doesn’t mean the same in all situations. It can have different meanings in different business environments and depending on the nature of the trade.
For example, unfair competition in a retail store environment can be a far cry from what a pharmaceutical company might engage in.
Trademark Infringement
This involves a business using someone else’s trademarked property without permission. An example of a trademark infringement is the use of the Coca-Cola trademark on a soft drink container manufactured by a competing beverage manufacturer.
False advertising
False advertising includes making misleading or false claims, such as a company making false claims about a drug’s weight loss ability when those claims have never been prove.
Unauthorized substitution
Unauthorized substitution is when a seller replaces one trademark with another without authorization. This may involve replacing a cheap handbag with a designer handbag.
Bait and switch tactics
The bait-and-switch tactic is another example of unfair competitive behavior that directly affects consumers. Suppose a product that is in high demand is advertised at a very reasonable price. Shoppers flocked to the store to buy the item but were told it was sold out. And consumers will be directed to a slightly more expensive product. Of course, consumers will not doubt and most agree to buy.
Appropriating trade secrets
Appropriation of trade secrets is another common example of unfair competition, such as stealing a competitor’s proprietary formula. The most concrete example is the incident involving KFC.
Unfair competitive practices are often characterized by deception, bad faith, fraud, or coercion — competition that impedes or prevents a competitor from successfully entering commerce.
They are seen as anti-public policy because they tend to impede competition unduly and this affects the interests of consumers. Unfair competition laws have been established to protect consumers and businesses and help prevent illegal trade.
Unfair competition law is not simply about protecting businesses nor is it just the domain of large corporations. Small business owners and individual consumers could also be vulnerable, as well as in solicitation and conversion cases and cases involving unauthorized substitutions. The law will intervene in cases where consumers have been harmed or lost money, such as in cases of false advertising.
Conclusion: So the above is The harms of unfair competition in Vietnam. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
