Liability For Acts Of False Advertising

9522354 - new york city - jul 8: times square, featured with broadway theaters and huge number of led signs, is a symbol of new york city and the united states, july 8, 2010 in manhattan, new york city.

Enterprises conducting false product adversting may be subject to the legal liability in many respects and to  the risk of bearing criminal liability, if  the acts of advertising shows sufficient signs to constitute a crime under the regulations.

Administrative sanctions

Administrative sanction is the most common applied sanction for the advertising acts that violate law.
Depending on the type of violation and the specific type of advertised products that enterprises conducting false advertising will be dealt with  monetary fine for different values from 10 to 70 million VND. Especially, for  food, food additives, nutritional and dairy products, etc., enterprises can be subject to addditional monetary fine from 5 to 15 million VND for the acts of advertising products which are not  in accordance with the documents on food safety or the regulation conformity announcement.

Apart from the moneytary fines, enterprises with violating acts of advertising must apply the remedial measures such as correcting the information, removing, dismantling or erasing the advertisement.

Sanction for the acts of unfair competition

Currently, the acts of false advertising have accounted for a high proportion of unfair competition cases. The acts of violation can be advertising withfraudulent information or misleading the clients about the price, quantity, quality, utility, ect. or imitating other products’ advertisement to confuse the clients.
Enterprises that violate can be fined from 60 to 140 million VND and be subject to one or more additional sanctions such as confiscating of material evidences and means of violation, confiscating profits earned from violating advertisement or being forced to commit a public retraction.

Liability of damage compensation

Subjects suffered from false advertising include the consumers and enterprises trading products in competition with the ones being advertised. In Vietnam, enterprises commiting acts of false advertising can be sued in Court in accordance with the procedures of compensation for non-contractual damage caused by the negative impact of advertising to consumers and other enterprises .
Since the claim for damage compensation is a right recognized by law in order to protect the legitimate interests of business entities as well as consumers, the liability for damages compensation can be simultaneously applied with other sanctions.

Criminal liability

In case that the false advertising shows sufficient signs of the acts of ” fraudulent advertising” under the provisions of the Criminal Code, the competent authorities will base on the nature and extent of danger in order to apply appropriate criminal sanctions.
Offenders can be fined from 10 to 100 million VND, be subject to non-custodial reform up to three years or be sentenced to imprisonment from 6 months to 3 years. In addition, the offenders can be fined up to 50 million VND and banned from practicing or doing certain jobs from 1 to 5 years.

 PLF Law Firm 
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