Unfair competition practices in legal consulting services in Vietnam

As the market is developing, the competitiveness between businesses also increases. Besides the optimistic development of the market, behaviors of competing unfairly also frequently occur. The article below, Viet An Law will consult on legal regulations related to unfair competition.

Legal basis

• Law on Competition 2018;
• Intellectual Property Law 2005, as amended and supplemented in 2009, 2019,2022;
• Law on Advertising 2012;
• Decree 75/2019/ND-CP regulates sanctions for administrative violations in the field of competition;
• Decree 99/2013/NĐ-CP regulates sanctions for administrative violations in the field of industrial property, amended, supplemented by decree 126/2021/NĐ-CP.

What is unfair competition?

According to the regulations of Competition Law, unfair competition behaviors are acts of enterprises that violate the principles of integrity, honesty, commercial practices, and other levels in business operations, causing damage or may damage the legitimate rights of other businesses.

Unfair competition practices are prohibited by law

Article 45, Competition Law lists unfair competition practices prohibited by law, including:

• Trade secret infringement in the following forms:
• Assessing and acquiring trade secrets by going against the security measures of the owner of such trade secrets.
• Disclosing or using trade secrets without consent of the owner.
• Forcing customers or business partners of other enterprises through threatening or coercion so that they do not enter into transactions or stop transactions with such enterprises.
• Discrediting competitors through directly or indirectly providing untruthful information about such competitors which negatively impacts their goodwill, financial status, or business operation.
• Disrupting competitors’ business through directly or indirectly interrupting or disrupting their legitimate business operation.
• Illegally luring customers through:
• Providing false or misleading information to customers about the enterprise or products, services, sale promotion programs, and transaction conditions related to the products or services provided by the enterprise to attract customers of competitors.
• Comparing products, and services of the enterprise with those of the same kinds of competitors without evidence to prove the comparison.
• Sale of goods and services below cost that drives or probably drives competitors out of the market.
• Other prohibited unfair competition practices prescribed in other laws.

In the sector of advertising, Article 8 of the Advertising Law, advertising uses unhealthy competition content as prescribed by law provisions on competition.

In the sector of intellectual property, Article 130, the Intellectual Property Law also lists unfair competition practices prohibited by law, including:

• Using commercial indications to confuse business entities, business activities, or commercial origin of goods or services.
• Using commercial indications to confuse the origin, production method, utilities, quality, quantity, or other characteristics of goods or services; or as to the conditions for provision of goods or services.
• Using marks protected in a country that is a contracting party to a treaty to which Vietnam is also a contracting party and under which representatives or agents of owners of such marks are prohibited from using such marks, if users are representatives or agents of the mark owners and such use is neither consented to by the mark owners nor justified.
• Registering or possessing the right to use or using domain names identical with, or confusingly similar to, protected trade names or marks of others, or geographical indications without having the right to use, to possess domain names, benefit from or prejudicing reputation and popularity of respective marks, trade names or geographical indications.

How are unfair competition practices handled?

Administrative penalties for unfair competition practices are specified in Decree 75/2019/ND-CP. Specifically:

Violation of trade secrets

• Main penalties: A fine ranging from VND 200,000,000 to VND 300,000,000 shall be imposed.
• Additional penalties:
• The exhibits and instrumentalities for committing the administrative violation shall be confiscated;
• Profits illegally obtained from the administrative violation shall be confiscated.

Coercive behavior in business

• A fine ranging from VND 100,000,000 to VND 200,000,000 shall be imposed for acts of forcing customers or partners of other businesses by threatening or coercive behavior. If the act is committed in multiple provinces: a fine from 200,000,000 VND to 400,000,000 VND;
• A fine ranging from VND 200,000,000 to VND 300,000,000 shall be imposed for acts of forcing customers or competitors’ largest partners by threatening or coercive behavior. If the act is committed in multiple provinces: a fine from 400,000,000 VND to 600,000,000 VND.
• Additional penalties:
  • Confiscation of exhibits and means used for crime;
  • Confiscation of profits gained from committing violations.

Trade libel

• A fine ranging from VND 100,000,000 to VND 200,000,000 shall be imposed for trade libel by indirectly spreading false information about an enterprise to cause harm to the prestige, financial status, or business operations of that enterprise. If the act is committed in multiple provinces: a fine from 200,000,000 VND to 400,000,000 VND.
• A fine ranging from VND 200,000,000 to VND 300,000,000 shall be imposed for trade libel by directly spreading false information about an enterprise to cause harm to the prestige, financial status, or business operations of that enterprise. If the act is committed in multiple provinces: a fine from 400,000,000 VND to 600,000,000 VND.
• Additional penalties:
• The exhibits and instrumentalities for committing the administrative violation shall be confiscated;
• Profits illegally obtained from the administrative violation shall be confiscated.
• Remedial measures:
• The violating entity is forced to make public correction of information.

Disruption to business activities of other enterprises

• A fine ranging from VND 50,000,000 to VND 100,000,000 shall be imposed for indirectly disturbing or disrupting the business activities of another enterprise. If the act is committed in multiple provinces: a fine from 400,000,000 VND to 600,000,000 VND. If the act is committed in multiple provinces: a fine from 100,000,000 VND to 200,000,000 VND.
• A fine ranging from VND 100,000,000 to VND 150,000,000 shall be imposed for directly disturbing or disrupting the business activities of another enterprise. If the act is committed in multiple provinces: a fine from 200,000,000 VND to 300,000,000 VND.
• Additional penalties:
• The violating entity shall have its/his/her license, practicing certificate, or operations suspended for a period from 06 to 12 months from the effective date of the decision on settlement of the competition case;
• The exhibits and instrumentalities for committing the administrative violation shall be confiscated;
• Profits illegally obtained from the administrative violation shall be confiscated.

Illegally luring customers from other enterprises

• A fine ranging from VND 100,000,000 to VND 200,000,000 shall be imposed for luring or poaching customers from other enterprises. If the act is committed in multiple provinces: a fine from 200,000,000 VND to 400,000,000 VND.
• Additional penalties:
• The violating entity shall have its/his/her license, practicing certificate, or operations suspended for a fixed period;
• The exhibits and instrumentalities for committing the administrative violation shall be confiscated;
• Profits illegally obtained from the administrative violation shall be confiscated.
• Remedial measures:
• The violating entity is forced to make public correction of information;
• The violating entity is forced to remove violating elements on its goods, goods labels, and means of trading or articles.

Selling goods or providing services below costs

• A fine ranging from VND 800,000,000 to VND 1,000,000,000 shall be imposed for selling goods or providing services below their costs. If the act is committed in multiple provinces: a fine from 800,000,000 VND to 1,000,000,000 VND.
• Additional penalties:
• The exhibits and instrumentalities for committing the administrative violation shall be confiscated;
• Profits illegally obtained from the administrative violation shall be confiscated.

Simultaneously, Decree No. 99/2013/ND-CP (as amended and supplemented by Decree 126/2021/ND-CP), unfair competition acts in the sector of intellectual property are handled, the following:

Infringement of rights to patents, utility solutions, and layout designs; trademarks, trade names, and geographical indications

• A fine of between VND 500,000 and VND 250,000,000 shall be imposed for any of the following acts with business purposes depending on the value of the infringing goods.
• Additional sanctions: Suspension of the production, and trading of infringing goods, for between 01 and 03 months.
• Remedial measures:
• Forcible removal and destruction of infringing elements.
• Forcible destruction of material evidence and means used in the commission of violations in which infringing elements cannot be removed.
• Forcible bringing out of the Vietnamese territory of transit goods infringing industrial property rights.
• Forcible remittance of illicit earnings from the commission of administrative.

Production, import, trading, transportation, or storage for sale of goods bearing counterfeit marks or geographical indications

• A fine of between VND 4,000,000 and VND 250,000,000 shall be imposed for any of the following acts with business purposes depending on the value of the infringing goods.
• Additional sanctions:
• Confiscation of material evidence and means used in the commission of violations.
• Suspension of trading in infringing goods or services, for between 01 and 03 months.
• Remedial measures:
• Forcible destruction or distribution or bringing into use without commercial purpose for goods bearing counterfeit marks or geographical indications; raw materials, materials, and means used mainly for producing or trading in those goods, provided such act does not affect the exercise of the industrial property rights by their holders.
• Forcible re-export of goods bearing counterfeit marks or geographical indications, or imported means, raw materials, and materials used mainly for producing or trading in these goods after infringing elements on these goods are removed.
• Forcible remittance of illicit earnings from the commission of administrative.

Production, import, trading, transportation, or storage for sale of stamps, labels, or articles bearing counterfeit marks or geographical indications

• A warning or fine of between VND 500,000 and VND 25,000,000 shall be imposed for any of the following violations in case of stamps, labels, packages, or articles bearing counterfeit marks or geographical indications with quantity of 500 pieces, sheets, or similar units.
• Remedial measures:
• Forcible destruction of stamps, labels, packages, or articles bearing counterfeit marks or geographical indications.
• Forcible remittance of illicit earnings from the commission of administrative violations.

Unfair competitions in industrial property area

• A warning or a fine of between VND 500,000 and VND 20,000,000.
• Additional sanctions:
• Deprivation of the right to use assessor cards or certificates of eligibility for industrial property assessment for between 01 and 03 months.
• Remedial measures:
• Forcible destruction of documents modified, falsified content, or forged
• Forcible remittance of illicit earnings from the commission of administrative violations.

The notice for businesses when competing in the market

When operating in the market, competition between businesses is unpreventable. Businesses need to compete in a healthy way to avoid violating the Competition Law. Because, when participating in unfair competition, businesses will be fined according to the law, and correspondingly, they will also lose credibility with their customers.

Instead, businesses can choose to compete healthily in the following ways:

• Provide reasonable product and service prices to attract customers.
• Improve product and service quality.
• Continuously update and innovate products and services to meet market changes.
• Research the market, and consider competitors to create an own market for the business.

Unfair competition consulting services in Vietnam of Viet An Law

• Support and consult customers on regulations related to unfair competition;
• Support and consult customers when they face up with unfair competition;
• Support customers in drafting applications and documents to file lawsuits when there is a dispute related to unfair competition;
• Represent customers to resolve disputes related to unfair competition at competent authorities.

If you have questions related to unfair competition consulting services in Vietnam, please contact Viet An Law Firm to receive the best support from our team of lawyers!