Regulations for a false advertisement

An advertisement has an important role and a significant meaning for giving developing opportunities to traders, and is simultaneously a commercial competition between traders. However, a false advertisement is more and more popular and becomes a high hazard to the Vietnamese market. The following essay will provide you with issues regarding a false advertisement in detail.

I. The facts of a false advertisement in current

Currently, an advertisement has been abused to become a means that causes low appropriation of the value, prestige, and quality of products or companies. Customers who buy based on false information are the first to suffer losses, and businesses or competitors also lose a significant number of customers. False information makes the market chaotic and opaque, which negatively affects the economy. False advertisement should be strictly prohibited, whether or not the advertiser is at fault, because it is an unfair competitive practice.

II. Understand a false advertisement

1. What is a false advertisement?

An advertisement is a use of means to publicize products, goods and services with profit aims; goods and services with non-profit aims; organizations or individuals that publish products, goods, and services, except political news; any social policy or individual information (According to Clause 1, Article 2 of the Advertisement Law 2012).

Therefore, a false advertisement (false advertising) is a deceptive act in advertising activities that is made by any organization or individual through means so as to publicize products, goods or services with exaggerated and inaccurate contents that affect other individuals and organizations.

2. What is a deception to customers?

Pursuant to Article 198 of the Criminal Code 2015, a deception to customers is a purchase and sale activity that implements wrong weights, measures, counts, and calculations; exchanges goods or products; or uses other deceptions to gain illegal profit from Customers.

3. An example of the false advertisement in Vietnam

In the year 2022, some Vietnamese artists spread messages that they escaped incurable diseases such as fibroid and cyst when advertising unclear medicines. Even people who are willing to present ultrasound results to demonstrate recovery after using such medicines. However, when checking the advertising information of artists, documents and materials related to such advertisements are inaccurate, such as the name of the clinic and the doctor. When the Ministry of Public Health investigates advertised medicines by the artists, such medicines are only dietary supplements that don’t have medicinal effects as advertised and only limit the development of fibroid and cyst.

This false advertisement’s condemnable thing is that individuals and organizations that are artists with significant influences in the community abused their reputation to deceive the Customers' trust. Many Customers, and specifically fans, bought falsely advertised medicines without checking or understanding because they absolutely trusted the artists’ prestige and information.

III. Regulations for the false advertisement

1. Legal basis of the false advertisement

• The Law on Advertising 2012;
• The Law on Competition 2018;
• Decree 38/2021/ND-CP stipulating administrative fines in the cultural and advertisement sectors.

2. Behaviors are banned from advertisement activities

Commercial advertising activities are banned according to Article 8 of the Law on Advertising 2012, as follows:

• Advertising products, goods and services that the State bans from business or advertisement, such as liquids with 15 alcohol degrees or more, tobacco, etc.;
• Advertisements that reveal the State’s secret, and harm independence, National sovereignty, National defense and security;
• Advertisements that don’t have aesthetics, and are contrary to historical traditions, cultures, ethics (morals), and fine customs in Vietnam;
• Advertisements that affect the urban scenery, traffic safety, and social order;
• Advertisements that significantly affect the respectability of the National flag, the National emblem, the National anthem, the Party’s flag, national heroes, cultural celebrities, the leaders of the State and the Party;
• Advertisements that express racial or sexual discrimination; violate the freedom of belief and religion; or prejudice against disabled people;
• Advertisements that offend the prestige, honor and human dignity of other organizations and individuals;
• Advertisements that use pictures, speech, or writing of any individuals without such individuals’ consent, except as otherwise provided by the Law;
• Advertisements that are inaccurate or confuse about the business capacity, and ability to provide products, goods and services of organizations and individuals trading products, goods and services; confuse about the quantity, quality, prices, instruments, designs, package, brand, origin, types, methods of service, and warranty duration of the registered or published products, goods and services; 
• Advertisements that use direct comparison methods of the prices, quality and efficiency of their products, goods and services to the prices, quality and efficiency of other organizations and individuals’ similar products, goods and services.

3. Resolution methods when arising behaviors of the false advertisement 

Pursuant to Article 11 of the Law on Advertising 2012, an injured person can denounce the Investigation Agency and request damages compensation according to the Law if there are damages related to behaviors of the false advertisement.

4. What authorities have the competence to resolve the false advertisement

If any individuals or organizations consider that their legal rights and interests are injured by violations of the Law on Competition, they have the right to appeal such competition issues to the Viet Nam Competition Commission.

IV. Questions regarding the false advertisement

1. How is the false advertisement handled?

Behaviors of the false advertisement can be handled with an administrative fine ranging from sixty (60) million dong to eighty (80) million dong according to Clause 5, Article 34 of Decree 38/2021/ND-CP. If behaviors of the false advertisement are enough elements to constitute a crime, such behaviors can be handled at the criminal level as defined by the Criminal Code 2015.

2. Whether the false advertisement can be imprisoned or not

If behaviors of the false advertisement are enough elements to constitute a crime, such behaviors can be handled as defined by Article 197 of the Criminal Code 2015, with a minimum fine of ten (10) million dong and a maximum penalty of up to three (03) years' probation.

3. How do Customers avoid being abused by false advertisements?

To avoid false advertisements, Customers need to prepare basic knowledge regarding the advertisement and be careful and observant for products, goods and services from false advertisements before buying them.

These are all information relating to REGULATIONS FOR A FALSE ADVERTISEMENT as prescribed by Vietnamese Law. Please don’t hesitate to contact us, if the clients have any further questions. NPLaw is willing to support the Client in resolving all issues listed with the best efforts.