Measures to Deal with Unfair Competition in Banking Activities

In addition to consumer credit management measures, EU competition law also adopts measures to tackle misleading advertising and to control comparative advertising. Accordingly, misleading advertising is understood as any advertising item in any form including representations that mislead or are intended to mislead the intended and possible target audience.

cause

affect economic activity

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and to prejudice or be likely to

detrimental to a competitor. Competitive advertising is

understood as any advertisement, whether explicit or implicit, that implies a similarity to a competitor or the advertised goods or services of a competitor. In the financial services sector, the European Union Competition Law requires financial services companies, including commercial banks, to ensure that all advertisements for financial and telecommunications services to customers are clear, truthful and not misleading [17, p.5758].

For Central and Eastern European countries [118], there are no separate regulations on combating unfair competition in the banking sector. These countries focus on developing the Competition Law and directly applying this law to unfair competition in banking activities. In Poland, Hungary and the Czech Republic, to effectively combat unfair competition in banking, these countries promote the use of precedents and the right of the court to interpret the law when resolving issues related to unfair competition in banking activities [17, p.5964].

To combat unfair competition, China [17, p.4043] regulates

specifically on unfair competition in banking activities,

Methods of handling unfair competition in operations

receive deposits and to

increase market

part.

Sources of law governing competitive behavior

China's unfair competition law is the Anti-Unfair Competition Law.

On the body

Department of Anti-Unfair Competition Law, Central Bank

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China issued Circular No. 354/2002 regulating competition activities on the Internet.

banking market. China applies a formal approach, which means giving specific behaviors such as fraud, misuse of brands, bribery, dumping, etc. [17, p.6465]. A bank is considered to have unfair competition when it: (i) rewards and pays employees based solely on the level of deposit mobilization; (ii) gives unusual discounts without justifiable reasons or provides services at prices lower than cost; (iii) allows customers to use loans to deposit money and open accounts at the bank; (iv) violates regulations on loan conditions when evaluating loan applications; (v) discloses information about the difficulties of other banks, defames competitors and misinforms customers; (vi) mobilizes capital at interest rates exceeding the ceiling prescribed by the People's Bank of China; (vii) implements the deposit mobilization quota that each bank employee must perform; (vii) unreasonably obstructing or delaying payments to rival banks. In China, unfair competition is divided into two groups: (i) competition in mobilizing deposits and (ii) competition to increase market share and expand customer base [17, p.65].

Compared with the approach of the European Union and the transition countries mentioned above, China's approach has the advantage of specifically identifying unfair competition behaviors in banking activities as a basis for applying appropriate handling measures. However, if we "frame" unfair competition behaviors in banking activities, it will be difficult to keep up with the developments of unfair competition behaviors in banking activities in practice. Studying unfair competition behaviors in banking activities in China, we see that this country has not been able to stipulate "common standards of business ethics" as called by Vietnamese law or "minimum market standards" as called by the European Union into its legal provisions.

For some Asian countries, especially those affected by the 1997 Asian financial crisis, the banking system has been reformed and the

establish competition rules for the banking sector. Accordingly, in banking activities, it is not necessary to establish strict rules in competition policy in the banking sector and specify the limitations in competition policy for the banking sector [117]. These countries focus on building the Competition Law applicable to all industries and fields. When applying the Competition Law to banking activities, these countries apply the provisions of the Competition Law, proving the unfairness in banking activities is based on the provisions of the Law on Credit Institutions.

Based on the above approaches and the provisions of the current Vietnam Competition Law, in our opinion, the law on combating unfair competition in banking activities includes 3 groups of behaviors: i) Group of behaviors that infringe on competitors such as preventing, slandering and defaming competitors, and exploiting;

ii) Group of behaviors that infringe upon the interests of customers; iii) Group of behaviors that infringe upon the safety objectives of banking operations and the system of credit institutions, affecting the implementation of national monetary policy. Specifically:

One is the group of behaviors that harm competitors such as obstructing, slandering and defaming competitors, exploiting credit institutions that are other competitors in the banking market. The basic characteristic of this group of behaviors is that they have a competitive purpose, are directed towards a specific credit institution and are associated with each specific banking activity. Typical unfair competitive behaviors of this group of behaviors are:

Infringing upon the reputation of credit institutions through defamation, slander, and damage to the commercial reputation of these entities, such as the act of "accusing" each other of violating the ceiling on mobilization interest rates; luring customers of competitors; bribing and luring employees of competitors for the purpose of illegally collecting information about the operations of competitors;

Advertising that compares your banking services with those of competitors; advertising that is false or misleading about financial resources

issued misleading audit reports to discredit competitors;

Defaming credit institutions and providing false information to confuse customers;

Unreasonably restrict or delay payment transactions with rival banks;...

Second , the group of behaviors that infringe on the interests of customers. This is a group of unfair competitive behaviors that infringe on the interests of customers of credit institutions. In banking business relations, credit institutions with the function of financial intermediaries can take advantage of the right to provide capital to exert pressure or hinder access to bank capital, which can be:

Forcing customers to use their banking services before granting credit or granting credit with conditions requiring them to use services provided by the bank.

Obstructing or intentionally not carrying out a customer's request but stopping transactions on the customer's account without a valid reason; preventing customers from using banking services of competitors...

Imposing conditions that are disadvantageous to customers, such as when customers use ATM services, banks charge transaction fees or set various fees without customers' consent...

Third , the group of acts that violate the goal of safety in banking operations and the system of credit institutions, and the implementation of the national monetary policy. With the special nature of business activities, banking operations of credit institutions have a great impact on the entire socio-economic life. That is, any act that aims to destabilize the banking market will affect the ability to supply and access capital for the entire society. Therefore, any act that can affect the goal of safety in banking operations and the system of credit institutions, affect the implementation of

National monetary policy must be stopped early or it will affect the entire system of credit institutions.

2.2.3.3. Measures to deal with unfair competition in banking activities

To determine measures to handle unfair competition behavior

In banking activities, it is necessary to first consider the approach to unfair competition. According to the concept of countries, there are two approaches to commercial behavior or unfair competition behavior, which are [14, p.284285]: i) Approaching unfair competition behavior as civil, which is an act that violates private interests, therefore, the violator can defend himself or seek the intervention of the court to protect himself; ii) Some predetermined behaviors constitute a violation of public economic order, therefore, these behaviors must be subject to the regulation of the state's laws on behaviors that have

can be

apply penalties. Research the legal provisions on

compete

unfair competition shows that Vietnam approaches unfair competition in both of the above approaches. From the above starting point, it can be seen that the handling of unfair competition in banking activities must also be based on the principles of handling unfair competition in general. Regulations on measures to handle unfair competition in banking activities include:

Suspension of unfair competition in banking activities.

Regulations on administrative sanctions for competition violations

Unfair competition in banking activities.

Regulations on damages, methods of determining damages caused by unfair competition in banking activities and procedures for resolving unfair competition cases in banking activities at the Competition Management Agency.

Settlement of claims for compensation by court is conducted according to civil proceedings or arbitration proceedings.

2.2.3.4. Regulations on the authority to handle unfair competition in banking activities and the coordination mechanism between these agencies in handling unfair competition in banking activities

These are the provisions for the legal provisions against unfair competition to come into life, becoming "living regulations". According to China's experience, in order to prevent and combat unfair competition,

healthy in deposit mobilization activities, the Central Bank of the Central

The State Bank of China has required commercial banks to comply with [90, p.9798]: to pay interest rates in accordance with state regulations and not to implement any forms of interest rate bonuses or promotions; not to give any form of bonuses or promotions to depositors based on the size of deposits; not to apply capital mobilization standards to departments that do not have the function of mobilizing deposits and to bank employees; strictly apply the lending interest rates prescribed by law and take into account reasonable banking operating costs; not to loosen credit conditions to achieve the goal of increasing market share and customers; prohibit the act of lending money to customers to open accounts and deposit money in banks. For unfair competition. In addition, to deal with the situation of unfair competition in capturing market share and attracting customers, the People's Bank of China has required banks: not to increase market share by reducing fees lower than costs; must have the approval of the People's Bank of China in applying new deposit mobilization methods; cannot provide free cards or machines to partners with whom the bank cooperates to issue payment cards; Chinese banks are also prohibited from providing free equipment, software systems and computer hardware to partners.

Airlines are not allowed to open transaction offices without the approval of the People's Bank of China.

From the above analysis, it can be seen that the regulations on the authority to handle unfair competition in banking activities and the coordination mechanism between these agencies in handling unfair competition in banking activities need to include the following contents:

Regulations on the authority of the State Bank in handling acts of unfair competition in banking activities.

Prescribe the coordination mechanism between the Competition Authority and the State Bank in investigating and handling unfair competition in banking activities.

Muscle

regime

muscle coordination

police investigation with the Agency

management

Competition and the State Bank when investigating criminal cases related to unfair competition in banking activities.

Regulations on the participation of the State Bank and the Competition Authority in proceedings for compensation for damages caused by unfair competition in banking activities at the people's court.

From the analysis of the legal content on combating unfair competition in banking activities, we draw the following conclusions:

Firstly , whether approached from the perspective of formal regulation like China or from the perspective of impact - based approach like the European Union countries or some other Asian countries, the Law on Anti-Unfair Competition or the Competition Law plays an important role in providing principles to determine the unfairness in the competitive activities of enterprises in the market economy. That is, the Law on Anti-Unfair Competition provides general principles for determining unfair competition behavior.

Second , there are two legislative trends on combating unfair competition .

strong in banking activities: 1. Specific regulatory trends

body

every action

unfair competition in banking activities (China) and 2. Only guidance on determining unfairness in banking activities in specific areas (European Union, Japan, Taiwan and some Central and Eastern European countries).

With specific regulations

body

each act of unfair competition

The advantage of this method in banking activities is that it is easy to apply because it describes each behavior specifically, it is easy for competent state agencies to apply it, and it is easy for those who suffer losses from unfair competition in banking activities to use it to protect their legitimate rights and interests. However, this method quickly becomes outdated because in business, competition tactics, including unfair competition, are constantly changing due to market fluctuations and if the issuance of legal documents is not timely, we have to "wait" for guidance documents.

In cases where unfair competition is not specifically regulated

strong but only refers to the principles stipulated in the Competition Law.

or Unfair Competition Law requires the courts to

the right to interpret an act as unfair competition that is essentially contrary to the common standards of business ethics in banking activities – a concept much broader than the concept of illegal competition; to use case law when resolving cases related to unfair competition in banking activities of commercial banks.

Third , although there are two legislative trends against unfair competition ,

Although the banking sector has been strong as analyzed above, the fight against unfair competition in banking activities exists as an inevitable part of the process of building and perfecting the financial market, including the money market. The practice of handling unfair competition in banking activities shows that, although there are no specific regulations on fighting unfair competition in banking activities of commercial banks, the European Union

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