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Unfair Trade Practices in Vietnam

Unfair Trade Practices in Vietnam. Ho Chi Minh City, Vietnam – 12 Sept 2012. What constitute an Unfair Trade Practice?. Paris Convention for the Protection of Industrial Property – Art. 10 bis Black’s Law Dictionary Cornell University’s Legal Information Institute (2010 )

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Unfair Trade Practices in Vietnam

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  1. Unfair Trade Practices in Vietnam Ho Chi Minh City, Vietnam – 12 Sept 2012

  2. What constitute an Unfair Trade Practice? • Paris Convention for the Protection of Industrial Property – Art. 10 bis • Black’s Law Dictionary • Cornell University’s Legal Information Institute (2010) • World Bank and OECD (1998) • Vietnam – Art 3(4) of the Competition Law 2004: “An act of unfair competition is the competitive act of enterprises in the business process that is against the common standards of business ethics and can cause damage or harm to benefits of the State, the rights and legitimate interests of other enterprises or consumers.”

  3. What specific UTPs are prohibited in Vietnam? • Misleading instructions; • Infringement of business secrets; • Coercion in business; • Defamation of another enterprise; • Causing disruption to business activities of another enterprise; • Advertisement aimed at unfair competition; • Promotions aimed at unfair competition; • Discrimination by associations; and • Illegal multi-level marketing. (Art. 40 – Art. 49 of the Competition Law 2004 of Vietnam)

  4. The differences between UTPs and other anticompetitive practices? • Criteria for defining whether a competitive practice is unfair or not: • Going against the common standards of business ethics • Having caused damages or having the potential of causing damages to other businesses or the consumer • Criteria for determining an anticompetive practice (restricting competition): • Relevant market • Large market share or the ability to substantially restrict competition in the market (market power) • Specific conducts (fixing prices, dividing markets, predatory pricing, anticompetitive M&As, etc)

  5. What other laws and regulations in Vietnam say about UTPs? • Article 4 of the Civil Code 2005 • Article 11(2) of the Commercial Law 2005 • Article 10 & Article 124 of the Law on Insurance Business 2001 • Article 7(9) of the Electricity Law 2005 • Article 8(7) of the Ordinance on Hygiene and Food Safety 2003 • Article 5(6) of the Ordinance on Advertising 2002 • Article 9 of the Securities Law of 2006 • Most recently, the Law on Protection of Consumer Interests 2010 provides for prohibition of various unfair and unconscionable business practices against consumers (Art. 10). Unfair contracts against consumers would be automatically void (Art. 16).

  6. Institutional arrangements • Investigating and handling unfair competition cases in Vietnam is the sole responsibility of the Vietnam Competition Administration Department (VCAD) – Ministry of Industry & Trade. • Preliminary investigation • Official investigation • Decision by the DG of the VCA: warning, sanctions and remedies • Appeal on the VCAD’s decisions over UTP cases go to the Minister of Industry and Trade, then to the Administrative Court • Apart from those cases related to IPRs, any other violation of the regulations on unfair competition in any sector shall be handled by the VCAD • The VCAD is also responsible for implementing the Law on Protection of Consumer Interests 2010.

  7. Law enforcement records

  8. Perception Survey

  9. So what people think? • Most business and consumers interviewed consider misleading advertisement, predatory pricing, coercive dealing, the imposing of unreasonably high prices and infringement of IPRs to be UTPs • More than 80% of all businesses and consumers interviewed said that UTPs negatively affect their interests • Discrepancy in bargaining power, asymmetric information, monopoly power, absence of relevant laws and institutions, and ineffective law enforcement are thought to be the cause • Existing rules, regulations or laws are believed to have not done an adequate job

  10. Our recommendations • Clarifying the concept of UTPs which remains open till date • Building up a clear and comprehensive legal framework on the issue, including implementation regulations, guidelines, in order to create a firm legal basis, and to avoid jurisdictional overlaps and conflict of laws • Involving the court and considering the issue of compensation • Capacity & institutional development for the VCA • More awareness raising and legal education on UTPs for the business and the consumer

  11. Thank you for your attention! For further information, please visit our website at http://utp.cuts-hrc.org/ & join our e-discussion forum on UTPs.

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