Unfair competition behavior fined up to 200 million VND

According to the Decree detailing the Competition Law on handling violations of the law in the field of competition recently issued by the Government, the maximum fine for unfair competition and other violations of the law on competition is 100 million VND for individuals and 200 million VND for organizations.

Selling goods below cost to eliminate competitors will be fined up to 10% of total revenue.

Fines of up to 10% of total revenue in the fiscal year prior to the year of the violation by an enterprise with a dominant market position or each enterprise in a group of enterprises with a dominant market position for the act of selling goods or providing services below total cost in order to eliminate competitors.

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In addition to being fined according to the above provisions, enterprises violating the provisions on abuse of dominant market position may be subject to one or more of the following additional sanctions and remedial measures: Confiscation of profits earned from committing the violation; forced removal of illegal provisions from contracts or related business transactions; forced restructuring of enterprises with dominant market position.

Violating regulations on multi-level marketing can result in fines of up to 100 million VND.

Also according to the Decree, the act of paying multi-level marketing participants a total value of commissions, bonuses and other economic benefits in a year exceeding 40% of the multi-level marketing enterprise's multi-level marketing revenue in that year will be subject to a fine of 40-60 million VND.

Fine multi-level marketing enterprises from 60 to 100 million VND for one of the following acts: Conducting business in the form of multi-level marketing without registering multi-level marketing activities with competent state agencies; requiring people who want to participate in multi-level marketing to deposit or pay a certain amount of money in any form to have the right to participate in the multi-level marketing network; requiring people who want to participate in multi-level marketing to buy a quantity of goods in any form to have the right to participate in the multi-level marketing network; requiring people who participate in multi-level marketing to pay an additional amount of money in any form to have the right to maintain, develop or expand their multi-level marketing network;...

Severe penalties for advertising and promotion aimed at unfair competition

The Decree clearly states that a fine of 60-80 million VND will be imposed on advertising acts: Directly comparing one's goods and services with goods and services of the same type from other businesses; imitating another advertising product to confuse customers.

Fines from 80 to 140 VND shall be imposed for advertising acts that provide false or misleading information to customers about one of the following contents: Price, quantity, quality, uses, design, type, packaging, date of manufacture, expiry date, origin of goods, manufacturer, place of manufacture, processor, place of processing; method of use, service method, warranty period; other false or misleading information.

Promotional acts aimed at unfair competition will also be severely punished. Specifically, a fine of 60-80 million VND will be imposed for one of the following acts: Organizing promotions that are fraudulent about prizes; promoting dishonestly or causing confusion about goods and services to deceive customers; discriminating against the same customers in different promotional locations in the same promotional program; giving away goods for customers to try but asking customers to exchange the same type of goods produced by another enterprise that the customer is using for their own goods.

For the above-mentioned unfair competition acts in cases where the scale of the promotion organization is within the scope of two or more provinces or centrally-run cities, a fine of 80-100 million VND will be imposed.

The Decree takes effect from September 15, 2014.

According to chinhphu.vn