Sanctions for Promotional Behavior Aimed at Unfair Competition

Local consumer complaints department to make complaints to production and business organizations and individuals or to make complaints to competent state agencies.

 Complain to state management agencies: Ministry of Industry and Trade of provinces and cities; relevant specialized agencies (Market Management Department, Food Safety and Hygiene Department, Trade Promotion Department...).

 In addition, consumers can file a lawsuit with a competent court to request compensation for damages according to the provisions of law in cases where there is sufficient valid basis and the production and business organization or individual does not satisfactorily resolve their legitimate rights.

Consumer rights are really great, making complaints and denunciations when their interests are violated is also very easy and in many different agencies and organizations, not like the common mentality of being afraid to sue, seeing the damage as small and insignificant so not complaining, or not knowing where to complain... Consumers have the right to submit all their complaints and request satisfactory resolution. It is because of that common fear that has contributed to businesses being able to take advantage of it to commit violations. Good legal awareness of consumers will contribute to making the Competition Law better enforced, creating barriers for dishonest businesses, helping the competitive environment to be clean, fair, transparent and stable.

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2.2.3. Sanctions against promotional activities aimed at unfair competition

The impact of promotional acts aimed at unfair competition on consumers, businesses and the stable operation of the competitive environment is not small. This act has violated the Competition Law, so there must be appropriate sanctions to limit and overcome the damage caused by the violation. Sanctions for promotional acts aimed at unfair competition include administrative sanctions and civil sanctions:

Administrative sanctions

This sanction is specifically stipulated in Article 34 of Decree 71/2014/ND-CP:

“1. A fine of from VND 60,000,000 to VND 80,000,000 shall be imposed for one of the following acts:

a) Organizing promotions that are fraudulent about prizes;

b) Dishonest or misleading promotions of goods and services to deceive customers;

c) Discriminating against the same customers in different promotional locations within the same promotional program;

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

2. A fine of VND 80,000,000 to VND 100,000,000 shall be imposed for violations of the provisions of Clause 1 of this Article in cases where the scale of the promotion organization is within the scope of two or more provinces or centrally run cities.

3. In addition to the fines prescribed in Clause 1 and Clause 2 of this Article, enterprises conducting promotional activities for unfair competition may also be subject to one or more additional penalties and remedial measures prescribed in Clause 4, Article 28 of this Decree. ”

It can be seen that, according to the provisions of Article 36 of Decree No. 120/2005/ND-CP, the highest fine for promotional acts aimed at unfair competition is only 50,000,000 VND and the lowest fine is 15,000,000 VND. Thus, with the huge benefits gained in each promotional period of the business,

If the number of businesses that engage in unfair competition promotions is not significant, the above figure is insignificant; at the same time, if businesses that violate competition laws attract customers or consumers of competing businesses, the above fine is insignificant. Thus, in the market, there will appear many businesses that intentionally violate competition laws, causing damage to competing businesses in order to gain huge benefits for themselves. Currently, with Decree 71/2014/ND-CP, the law has stipulated that the fine for unfair competition promotions has increased significantly compared to the previous fine to punish and deter businesses that engage in unfair competition promotions.

In addition to fines, businesses conducting promotional activities for unfair competition may also be subject to one or more additional penalties and remedial measures such as:

“• Confiscation of exhibits and means used to commit the violation, including confiscation of all profits gained from committing the violation;

• Forced public correction .”

Civil sanctions

Civil liability for acts of unfair competition is essentially no different from liability for compensation for damages outside of contracts under civil law. However, according to the provisions of the Competition Law 2004, the legal consequences of acts of unfair competition are only through administrative sanctions without mentioning the application of civil measures. This is the difference between the Competition Law 2004 and the Intellectual Property Law 2005. Handling acts of unfair competition through administrative sanctions will not resolve

damage to competitors and customers. They will waste time and money in filing a lawsuit without compensation for the damage, and have to file another civil lawsuit for compensation, which is costly in terms of time and money, and sometimes the effectiveness of filing a lawsuit is not high. This is also the reason why currently there are not many lawsuits on unfair competition applied under the 2004 Competition Law. In the 2005 Intellectual Property Law, Clause 3, Article 198 states: "Organizations and individuals who suffer damage or are likely to suffer damage due to unfair competition have the right to request competent state agencies to apply civil measures prescribed in Article 202 of this Law and administrative measures prescribed by the law on competition". The above problem is that civil measures can still be applied in this case. Although the 2004 Competition Law does not clearly state the issue of compensation, Article 117 mentions the possibility of compensation for damage: "Organizations and individuals who commit acts or violate the law on competition, causing damage to the interests of the State, the rights and legitimate interests of other individuals and organizations, must compensate for damage according to the provisions of law."

CHAPTER 3.

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

3.1. Solutions to promotional behavior aimed at unfair competition

Nowadays, in an extremely competitive environment, businesses must always improve the quality of their goods and services every day to keep up with the rapid development of the economy. Businesses are increasingly aware of the effects of promotions in stimulating sales, product consumption and brand promotion. However, the current reality shows that, in order to achieve maximum revenue, many businesses have been and are carrying out promotional activities to compete unfairly, contrary to the provisions of the law. According to research by Nielsen market research firm in 4 major cities: Ho Chi Minh City, Hanoi, Da Nang and Can Tho, people who often shop and make purchasing decisions mainly in the family, the results show that: 87% of Vietnamese people are willing to buy promotional products. Businesses often take advantage of consumers' greed to launch attractive promotional programs to maximize their profits. Because most consumers will choose to buy products that are on sale more. Consumers can often see extremely attractive promotional information on banners at stores, showrooms, supermarkets or mass media such as: discounts from 40% -50% with valuable gifts; shocking weekend prices; customer appreciation - lucky draw, etc. Currently, many businesses when listing prices are the price is discounted by 20% or 30%, but that list is posted all year round, with the price being an absolute number that does not change. So that price is the real selling price, not the price

discount and this behavior is considered deceiving customers. According to regulations, the maximum discount for promotional goods and services cannot exceed 50% of the price of the goods and services immediately before the promotion period. In reality, many businesses, because they want to sell out of stock or out of fashion goods, therefore carry out "big discounts" at 60-80%. Or like the promotions of network operators in the past, the regulation did not exceed 50%, but there were still promotional programs up to 100%, 170%, 200%... The reason they gave to circumvent the law was that this was only an incentive for customers who had used the service for a long time... There are businesses that are not honest and transparent when implementing lucky programs, such as requiring customers to collect enough bottle caps with printed images of bicycle parts to assemble into a bike to win a high prize, but in reality, they did not issue enough bottle caps with all the parts printed on them; or scratch cards that win prizes but do not issue cards with special prizes... Therefore, there are promotional programs advertised with very high prizes but no one wins. Businesses "lure" consumers to buy many products in the hope of winning prizes but in the end do not pay the prize cost to customers...

Recently, the control of promotional activities of enterprises has encountered many difficulties due to the lack of management team, the legal system is not complete and synchronous, so the situation of unhealthy promotion often occurs, causing many damages to consumers. The author would like to present some remaining aspects in promotional activities aimed at unfair competition as follows:

 Businesses organize promotions but are dishonest, deceitful, and deceive customers with attractive prizes, typically the case of LG company cheating in a promotion program with a prize value of nearly 2 billion VND that the author mentioned earlier. A massive promotion program with big prizes but calculated in advance

about the award recipient is unfair to other participants. Such customer deception is dishonest behavior and who will manage and handle such cases? Consumers are afraid to complain and sue for small benefits, but if the authorities are still negligent and do not control such matters, it will benefit dishonest businesses and consumer rights will continue to be violated. Therefore, it is necessary to encourage and create conditions for consumers to boldly complain when they see their rights affected or see violations, only then can we reduce dishonest and fraudulent behavior of businesses in the future. At the same time, relevant authorities need to be more active in detecting, preventing and strictly handling violations according to the law to create trust for other businesses and consumers. Because promotional behavior aimed at unfair competition has a great impact on the business activities of legitimate enterprises and consumers, it is necessary to properly handle this behavior to create a healthy competitive environment. Organizing awards to honor honest and healthy businesses that fulfill their responsibility to protect the legitimate rights of consumers, and rewarding businesses and individuals who detect violations are positive moves that contribute to pushing back promotional behavior aimed at unfair competition.

 The situation of businesses providing misleading information to consumers still happens frequently. Businesses provide vague and unclear promotional information, causing confusion for consumers to buy the product. Sometimes, the product is in stock, poor quality but not clearly stated, making customers not know and think it is a good product. For example: A company that opened an electronics supermarket, together with a number of suppliers, launched a "super promotion" program to reduce the price of products by up to 50%. This program was widely introduced in the media.

They attract a large number of customers to the supermarket to shop. However, most of the discounted goods of the company are stock and the quantity is very small. Thus, the company has not been honest in bringing promotional information to consumers. The situation of businesses promoting but confusing customers still happens a lot in reality, so the competent authorities need to promptly overcome it to prevent violations and also to protect the interests of consumers.

 Promotional programs are widespread and difficult to control. In fact, in cities today, you can see promotional products everywhere, especially clothing, processed foods, etc. There are stores that have discounts all year round, always selling discounted products with eye-catching titles such as "Big sale", "Super sale" but consumers always like cheap prices, that is the common mentality, when they see promotional products, they just buy them without paying much attention to their quality, when they use them, the consumers still have to bear the loss. According to the provisions of the Commercial Law, the management of promotional programs is under the authority of the Ministry of Industry and Trade if the promotional program is implemented in one province or centrally run city, if it is implemented in two or more provinces or centrally run cities, it is under the authority of the Ministry of Industry and Trade. However, according to statistics, every day there are thousands of product codes registered for promotional programs, so the Ministry of Industry and Trade will not be able to closely manage these promotional activities and it will be very difficult to implement because the number is too large and unregistered promotional programs still occur frequently, which has caused many difficulties in the management of promotional activities. Therefore, it is necessary to strengthen the inspection and supervision of promotional activities of enterprises in each specific area. This requires the coordination of many functional agencies such as: Competition Management Department, Market Management Department, Trade Promotion Department, etc. These agencies must closely coordinate and link with each other in the management of promotional activities of enterprises, and when facing difficulties

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