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) 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.”

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)

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)

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).

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.

Law enforcement records

Perception Survey

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

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

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.