Unfair Competition Practices

According to the provisions in Article 39 of the Competition Law of 2004, acts of competition restriction include:

Article 39. Acts of Unfair Competition

Unfair competition acts in this Law include:

1. Misleading instructions;

2. Infringement of trade secrets;

3. Coercion in business;

4. Defamation of other businesses;

5. Disruption of business activities of other businesses;

6. Advertising aimed at unfair competition;

7. Promotions aimed at unfair competition;

8. Discrimination by associations;

9. Illegal multi-level sales;

10. Other acts of unfair competition according to the criteria specified in Clause 4, Article 3 of this Law, as prescribed by the Government of Vietnam.

ANALYSIS OF SOME PRACTICAL EXAMPLES:

1. Misleading Instructions;

Example: Nestea lemon tea product of Nestle and Freshtea lemon tea of Thuy Huong Company.

The Nestea lemon tea product is currently popular in the market; however, many customers, especially those in the provinces, are confused with Freshtea of Thuy Huong Company.

According to the documents of the Intellectual Property Company Banca, publicly announced at a seminar organized by the Ministry of Industry and Trade, Thuy Huong Company (Thanh Tri, Hanoi) has engaged in unfair competition behavior.

To be specific, Thuy Huong used misleading commercial instructions between Freshtea and Nestea. The similarity in the textual part: structure, pronunciation, and similar presentation, layout, and colors. On the exterior, if not paid attention, it would be difficult to detect that these two lemon tea packages are produced by two different companies. Some consumers surveyed claimed that both Freshtea and Nestea were products of Nestle, as they look very... alike!

6. Advertising aimed at unfair competition;

• Advertising for the purpose of unfair competition includes:

- Directly comparing one's goods or services with those of another business of the same kind;

- Imitating another advertising product to confuse customers;

Example: Comparative advertising slandering competitors - KimDan Mattress

A few years ago, the company Kim Dan, a large natural rubber mattress manufacturer in Ho Chi Minh City, advertised in five major newspapers with the following content: "For spring mattresses, due to the inferior nature of production materials, the quality of mattresses will degrade over time. If the spring's elasticity is high, the springs are easily broken, posing a danger to users. For poly-urethane synthetic plastic mattresses (light foam mattresses), the superior flexibility means no elasticity, quickly collapsing. For these reasons, Kim Dan does not produce spring mattresses or poly-urethane plastic mattresses. All of Kim Dan's products are made from 100% natural rubber, with high durability and no subsidence over time...".

Shortly after the above advertisement was published, three spring mattress and foam mattress manufacturers sued Kim Dan in court for having unsubstantiated advertisements, damaging the reputation of their products.

7. Promotions aimed at unfair competition;

Example: Incorrect promotions - Massan Seasoning Powder

According to a report by the Investigation and Handling of Unfair Competition Acts Committee, Massan Company launched an unfair competition promotion program in Ho Chi Minh City.

To be specific, the company offered a promotion for seasoning powder, allowing consumers to bring used seasoning powder packages to exchange for Massan products. This behavior is regulated as one of the promotional activities aimed at unfair competition: "Giving goods for customers to try, but requiring customers to exchange the same type of goods from other manufacturers they are using."

Unilever Bestfood Company raised a complaint about this promotion program to the Ho Chi Minh City Department of Commerce. The inspectors of the Department recorded the incident and demanded the suspension of the promotional program.