Law on unfair competition in promotional activities

HANOI NATIONAL UNIVERSITY FACULTY OF LAW

PHAM THANH TAM

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LAW ON UNFAIR COMPETITION IN PROMOTION ACTIVITIES

UNIVERSITY THESIS: MASTER: LAW

Training system: Full-time Course: QH-2012_L

Hanoi, 2016.

HANOI NATIONAL UNIVERSITY FACULTY OF LAW

PHAM THANH TAM

LAW ON UNFAIR COMPETITION IN PROMOTION ACTIVITIES

UNIVERSITY THESIS: MASTER: LAW

Training system: Full-time Course: QH-2012_L

INSTRUCTOR: MASTER TRAN ANH TU

Hanoi, 2016

COMMITMENT

I hereby certify that this thesis is the result of my research and study process with the enthusiastic help of Mr. Tran Anh Tu. All references and citations have clear sources.

I take full responsibility for my thesis.

Hanoi, May 10, 2016.

Student performed by Pham Thanh Tam

INDEX

INTRODUCTION 6

CHAPTER 1. GENERAL OVERVIEW OF PROMOTIONS AIMING FOR UNFAIR COMPETITION 9

1.1. General overview of promotion 9

1.1.1. Concept of promotion 9

1.1.2. Characteristics of promotional activities 11

1.1.3. Promotional forms 13

1.1.4. The role and significance of promotional activities 17

1.2. General overview of promotions aimed at unfair competition 24

1.2.1. Concept of promotion for unfair competition 24

1.2.2. Legal characteristics of promotions aimed at unfair competition. 25

1.2.3. Impact of promotional behavior aimed at unfair competition .. 27 CHAPTER 2. PROVISIONS OF THE LAW ON PROMOTIONS FOR UNFAIR COMPETITION IN VIETNAM 29

2.1. Promotional acts aimed at unfair competition under the Competition Law 2004 29

2.1.1. Organizing promotions that are fraudulent about prizes 29

2.1.1. Dishonest or misleading promotions of goods and services to deceive customers 35

2.1.2. Discriminating against the same customers in different promotional locations within the same promotional program 39

2.1.3. Giving away goods to customers for trial use but requiring customers to exchange the same type of goods produced by another business that the customer is using for their own goods 41

2.2. Handling promotional activities aimed at unfair competition 45

2.2.1. Competent authority for handling 45

2.2.2. Procedures for handling promotional acts aimed at unfair competition 48

2.2.3. Sanctions for promotional activities aimed at unfair competition... 49

CHAPTER 3. SOLUTIONS AND SOME PROPOSALS TO IMPROVE THE LAW ON PROMOTION TO FIGHT UNFAIR COMPETITION IN VIETNAM TODAY 53

3.1. Solutions to promotional behavior aimed at unfair competition 53

3.2. Some proposals to improve the law on promotions aimed at unfair competition in Vietnam today 61

CONCLUSION 66

LIST OF DOCUMENTS 68

INTRODUCTION

1. Reason for research

The Vietnamese economy in recent years has had strong movements, operating according to the market mechanism with state regulation in the direction of socialism. During this period, our country is gradually integrating with the market economy. These are necessary conditions for the development of a country's economy and there exist many related issues that govern many aspects of the economy affecting the balanced development of the economy and the lives of each citizen, one of which is competition, notably unfair competition. When entering a free business environment to create a transition for a dynamically developing economy, competition in the purchase and sale of goods is necessary and inevitable. Every manufacturer always wants to make a lot of profit and the purchase and sale of goods requires a strategy and may include dirty tricks to defeat their competitors. There are many measures used in competition such as: advertising, promotion, price competition... Any product made needs to be brought to consumers in many different ways to attract as many customers as possible, and promotion is one of the activities that is often used to introduce one's goods such as: a series of promotional programs taking place widely... to stimulate customers' purchasing power for a certain type of product. There are manufacturers and businesses that, because they cannot compete with other companies, use unfair measures to compete unfairly by many different tricks: dumping goods, slandering and comparing advertisements to badmouth other businesses' products... These cases and issues must be intervened and handled by the law promptly to create a healthy and fair competitive environment. The Competition Law was issued in 2004, which stipulates that unfair competition is prohibited. This is an important legal corridor to create fair competition in business activities, the

peace of mind for manufacturers and investors in business. However, the law cannot regulate everything and unfair competition acts with increasingly sophisticated tricks appear more and more. Nowadays, unfair competition in promotional activities occurs more and more diversely and greatly affects the interests of the State, other businesses and especially consumers. Although the Competition Law 2004 has been issued to limit, overcome and handle violations, in reality, the application and enforcement of the Competition Law still faces many difficulties and problems that need to be resolved soon to contribute to protecting the common interests of society and also to stabilize the competitive environment, creating a solid legal framework for businesses to operate within the legal framework and always compete fairly. For the above reasons, the author has chosen the topic "Law on unfair competition in promotional activities" as the topic of his graduation thesis.

2. Research purpose

The author's purpose in researching this topic is to learn about the regulations on unfair competition and unfair competition promotion, about the authority and sanctions for violations. From there, the author considers whether the legal regulations in this field are suitable for the current situation or not, and whether these regulations are effective or not in order to make some recommendations and solutions to partly overcome the existing limitations as well as to further consolidate the legal corridor.

3. Scope of research

Within the scope of the topic, the author focuses on researching legal regulations on promotional activities according to the Commercial Law 2005 and Decree 37/2006/ND-CP dated April 4, 2006 detailing the Commercial Law on trade promotion activities, Decree 68/2009/ND-CP dated June 6, 2009.

08/2009 amending and supplementing Clause 7, Article 4 of Decree No. 37/2006/ND-CP and Decree No. 71/2014/ND-CP dated July 21, 2005 regulating sanctions for violations of the law in the field of competition.

In addition, the author also studies specific regulations on promotional behavior aimed at unfair competition, the authority to handle and sanctions for this behavior according to the Competition Law 2004, passed by the National Assembly on December 3, 2004 and officially effective from July 1, 2005.

4. Research methods

In his thesis, the author used the method of analysis, comparison, and then synthesis to present the most basic concepts and viewpoints on unfair competition and unfair competition promotion. In addition, the author also used the method of written law analysis to study specific provisions of the law, thereby being able to present the current situation and directions for solving the remaining aspects of the law.

5. Topic layout

The topic "Law on unfair competition in promotional activities" includes:

- Introduction.

- Content: includes 3 chapters:

 Chapter 1: General overview of unfair competition and promotions aimed at unfair competition.

 Chapter 2: Legal regulations on promotions aimed at unfair competition in Vietnam.

 Chapter 3: Solutions and some proposals to improve the law on promotions aimed at unfair competition in Vietnam today.

- Conclusion

- List of references.