Unfair competition by competitors poses a significant challenge to many enterprises, causing economic losses and adversely affecting corporate reputation. To respond effectively, enterprises must have a sound understanding of the law and develop appropriate preventive strategies. In the below article, NPLaw analyzes the current situation of unfair competition, relevant legal regulations, clarifies infringing acts and enforcement measures, and provides professional consulting services to assist enterprises in building a strong legal framework to protect their lawful rights and ensure sustainable development.

I. Understanding of unfair competition by competitors

Unfair competition refers to acts that violate business ethics and legal regulations with the intention of undermining or causing disadvantage to competitors. Such acts may include disseminating false information, misappropriating trade secrets, copying products, or employing unlawful pressure tactics. In a market economy, identifying and addressing acts of unfair competition is a critical factor in protecting enterprise interests.

Unfair competition not only harms the targeted enterprises but also erodes consumer confidence and disrupts market order. Therefore, understanding the nature of such conduct is the first step for enterprises to protect themselves.

II. Regulations on unfair competition by competitors

1. Who is considered an unfair competitor?

Although the law does not directly define the term “unfair competitor,” Article 3 of the Law on Competition 2018 states acts of unfair competition as acts of enterprises that contravene the principles of good faith, honesty, commercial practices, and other business standards, thereby causing or potentially causing damage to the lawful rights and interests of other enterprises.

Accordingly, an unfair competitor may be understood as an organization or individual conducting business in the same market, capable of directly or indirectly competing with an enterprise, and engaging in unlawful competitive acts that infringe upon the lawful rights and interests of such an enterprise.

Such subjects may include, but are not limited to:

  • Enterprises intentionally creating confusion regarding products or services;
  • Organizations or individuals using false information to damage the reputation of competitors;
  • Enterprises engaging in acts that infringe upon trade secrets or intellectual property rights.

2. Criteria for identifying unfair competitors

To determine whether an enterprise or individual is an unfair competitor, it is necessary to examine conduct that violates competition law. Specifically, Article 45 of the Law on Competition 2018 lists prohibited acts of unfair competition, including:

  • Infringement of confidential business information: Unlawfully collecting, accessing, or disclosing confidential business information;
  • Coercion in business activities: Forcing customers, suppliers, or competitors not to transact or to transact exclusively with oneself;
  • Disruption of another enterprise’s business activities: Obstructing or causing difficulties to competitors’ business operations;
  • Misleading advertising: Providing false or misleading information regarding products, services, prices, or enterprise reputation;
  • Selling goods or providing services below cost: Engaging in predatory pricing to eliminate competitors;
  • Acts of economic espionage, improper solicitation of customers, and market disruption.

3. How are acts of unfair competitors infringing rights and interests handled?

Where unfair competitors commit acts that infringe upon the lawful rights and interests of enterprises, the following measures may be applied:

  • Administrative sanctions: The National Competition Commission has authority to impose administrative sanctions for acts of unfair competition in accordance with competition law. Fines may reach up to 10% of the violating enterprise’s total revenue (Article 111, Law on Competition 2018).
  • Civil remedies: The injured enterprise has the right to initiate legal proceedings to claim compensation for damages caused by unfair competition (Article 110, Law on Competition 2018).
  • Criminal liability: In serious cases, acts of unfair competition may constitute criminal offenses (for example, infringement of industrial property rights or deceiving customers) and may be subject to criminal prosecution under the Penal Code.

III. Common questions regarding unfair competition by competitors 

1. How is compensation determined when unfair competitors cause damage?

When unfair competitors cause damage to an enterprise, compensation is determined in accordance with Article 110 of the Law on Competition 2018, in conjunction with general provisions on non-contractual damage compensation under Article 585 of the Civil Code 2015. The injured enterprise may claim compensation for damages, including:

  • Material damage: Loss of property, revenue, or profits;
  • Damage to reputation and goodwill;
  • Costs incurred in preventing and remedying the damage.

The amount of compensation is determined based on evidence and legal provisions, either through agreement between the parties or by a court decision. The parties may agree on the level, form (in cash, in-kind, or performance of obligations), and method of compensation (lump-sum or installment). If no agreement is reached, the injured party may request the court or another competent authority to determine or adjust the compensation.

2. Is it permissible to file complaints against unfair competitive conduct?

Enterprises are fully entitled to file complaints with the National Competition Commission regarding unfair competitive conduct by competitors. The procedures and limitation period for complaints are stipulated in Article 77 of the Law on Competition 2018. The limitation period is three years from the date on which the alleged violation occurs. To file a complaint, enterprises must prepare a complete dossier, including:

  • A complaint application in the prescribed form issued by the National Competition Commission;
  • Evidence substantiating the complaint with lawful grounds;
  • Other relevant information and evidence, if any.

Complainants are responsible for the accuracy and truthfulness of the information and evidence submitted.

3. What should enterprises do to avoid unlawful pressure tactics by unfair competitors?

To prevent and respond to unlawful pressure tactics by unfair competitors, enterprises should proactively implement the following measures:

  • Establishing an effective risk management system to identify and assess potential risks and develop flexible response plans;
  • Obtaining strengthen protection of business information by applying strict confidentiality measures to safeguard trade secrets and customer data;
  • Building positive relationships with stakeholders, including customers, suppliers, partners, and the community;
  • Actively monitoring and responding to information by tracking media coverage and promptly addressing false or negative information;
  • Enhancing employee awareness through training on competition law and skills for handling unfair competition scenarios;
  • Seeking legal consultation from lawyers or legal experts for timely advice and support.

4. How can evidence of unfair competition be collected?

The collection of evidence is a main factor in proving acts of unfair competition and protecting enterprise interests. Sources of evidence may include:

  • Documents and records: Contracts, invoices, financial statements, emails, correspondence, advertising materials;
  • Witness statements: Testimony from employees, customers, partners, or other knowledgeable persons;
  • Images and videos: Recordings of unfair competitive acts;
  • Expert assessments: Product quality inspections or evaluations of damage caused by competitive conduct;
  • Online, press, and media information: Articles, comments, or advertisements showing signs of violations.

It should be noted that evidence collection must comply with legal regulations, ensuring objectivity, integrity, and respect for privacy rights.

5. Which authorities have jurisdiction to resolve disputes involving unfair competitors?

Jurisdiction over disputes involving unfair competition depends on the nature and severity of the violation. Competent authorities include:

  • The National Competition Commission: Pursuant to Article 78 of the Law on Competition 2018, it has authority to investigate and handle acts of unfair competition.
  • People’s Courts: Enterprises may initiate lawsuits before the People’s Courts to claim compensation for damages caused by unfair competition (Article 42, Law on Competition 2018). Where violations show signs of criminal offenses, investigative authorities may institute criminal proceedings in accordance with criminal law.
  • Commercial arbitration centers: Where the parties have an arbitration agreement, disputes may be resolved through arbitration in accordance with the Law on Commercial Arbitration 2010.

IV. Legal consulting services on unfair competition

NPLaw provides professional and comprehensive legal consulting services on unfair competition, assisting enterprises in:

  • Assessing legal risks related to competitive conduct;
  • Developing preventive and responsive strategies against unfair competition;
  • Collecting, analyzing, and evaluating evidence to prove violations;
  • Drafting complaints, denunciations, lawsuits, and other legal documents;
  • Representing clients in dispute resolution proceedings before administrative authorities, arbitral tribunals, or courts;
  • Advising on measures to protect trade secrets and intellectual property rights;
  • Organizing training programs for employees on competition law and business ethics.

Please contact NPLaw today for professional legal consultation and support regarding unfair competition.