Consumer sovereignty in the framework of social justice, economic equality and environmental balance, within and across borders

Advertisements cannot confer unfair advantage

June 11, 2014

In an imperfect competitive environment with asymmetrical information that we have today, advertisement is a marketing tactic that plays an important role in the existence and development of most enterprises.

Advertisement is a form of communication used to introduce products, goods or services to the public with or without a lucrative purpose.

Currently, it is generally agreed that an advertisement has to meet the following three conditions to be deemed lawful: (i) people producing and displaying the advertisement are individuals and enterprises permitted by law to carry out promotional activities; (ii) the promoted products are allowed by law to be advertised; and (iii) the means and forms of advertising comply with relevant provisions of the law.

Enterprises may conduct promotional activities by themselves or hire advertising agencies. However, foreign individuals and organisations not operating in Viet Nam are required to hire Vietnamese advertising agencies if they wish to advertise their products, goods, services, and/or activities in the country.

At present, the portfolio of products, goods and services prohibited from advertising include:

– Goods and services that cannot be legally traded;

– Cigarettes;

– Liquor with alcohol content of 15 per cent or more;

– Dairy products that are breast milk substitutes for children under 24 months old, dietary supplements for children under 06 months old; artificial feeding bottles and pacifiers;

– Prescription medication and non-prescription medication that competent State agencies advise restrictive use of or use under doctors’ supervision;

– Pornographic products and goods;

– Shotguns and cartridges, sporting weapons and products that can incite violence;

– Other products, goods, and services banned from advertising by the Government in practice.

The Law on Advertising (2012), Law on Competition (2004), and Commercial Law (2005) all mention false advertising that constitutes unfair competition, negatively impacting other enterprises and consumers.

Notably, the Law on Advertising makes express mention of activities prohibited in advertising, including:

– Offend the prestige, honour and dignity of other organisations and individuals;

– Use pictures, statements, or handwriting of other individuals without their consent, unless otherwise permitted by law;

– Falsely advertise or cause confusion about the business’s competence and the ability to provide products, goods, and services; about the quantity, quality, price, features, design, package, brand name, origin, category, serving method, and warranty duration of the registered or announced products, goods and services;

– Directly compare price, quality, and efficiency of products, goods, and services of other individuals and organisations. Use words like “best,” “the best”, “only”, “number one” or other words with similar meaning;

– Use unfair content as stipulated by Law on Competition;

– Use advertisements that violate laws on intellectual property;

– Use advertisements that cause children to think, speak, and act against traditional customs and ethics; or negatively affect children’s health, safety, or natural development; and

– Hang, place, stick or paint advertisements on utility poles, traffic signal poles, and trees in public spaces.

The law also mentions that advertising must be conducted via legally permissible promotional means such as newspapers, websites, billboards, banners, signs, conventions, seminars, conferences, etc.

The voices and words used in advertisements must be Vietnamese, unless otherwise stipulated by law.

The advertiser must ensure that the content of an advertisement is honest, accurate, clear, and not harmful to manufacturers, traders and advertisement targets.

Advertisement content for special products, goods, and services shall be prescribed by the Government.

For an advertisement to be deemed lawful, it is also necessary for enterprises to have knowledge of other conditions specifically stipulated by law that apply to certain situations, products, and services.

To prevent advertising and advertisements from inducing unfair competition, the Vietnamese Government has issued Decree No 158/2013/ND-CP stipulating penalties for administrative violations with regard to culture, sports, tourism, and advertising sectors. The Decree clearly states in detail the different levels of penalties for acts violating legal provisions on advertising.

(PLF – Law Firm)