Only 1.6 per cent of polled enterprises said they fully understand the law, while 92 per cent said they are aware but are not clear.— Photo baocongthuong

HCM CITY (Biz Hub) — Though the Law on Competition took effect in 2005, only a small number of enterprises understand its provisions, a seminar heard yesterday in HCM City.

The law aims to preserve the rights of enterprises to compete freely and lawfully with each other, said Pham Van Cao of the Viet Nam Competition Administration Department (VCAD) under the Ministry of Industry and Trade.

Competitive practices by an enterprise that are contrary to general standards of business ethics and which cause, or may cause, damage to the interests of the State and/or the legitimate rights and interests of other enterprises or consumers are defined as unfair competitive practices, Cao said.

In order to protect consumers and to ensure competitors can compete freely, the law prohibits enterprises from undertaking following unfair competitive practices: misleading instructions; infringement of business secrets; coercion in business; defamation of other enterprises; causing disruption to the business activities of other enterprises; advertisements or promotions aimed at unfair competition; discrimination by association; and illegal multi-level selling.

Misleading instructions mean giving consumers misleading information to mislead them in their understanding of the goods and services.

Instead of working to raise their competitiveness, companies use similar brands or packages of other successful businesses to take advantage of the latter's achievements to sell their products, he said.

When enterprises discover unfair competitive practices of their rivals, they need to submit their complaints to the VCAD for investigation, he said.

However, only 1.6 per cent of polled enterprises said they fully understand the law, while 92 per cent said they are aware but are not clear.

Meanwhile, more than 70 per cent of enterprises have not established legal divisions, making it difficult for them to fight against unfair competition, he said.

"Unfair competition in businesses is on the rise and is becoming complicated," he said.

Can Dac Vi, director of the Law Consultative Centre under the HCM City Union of Business Associations, said sanctions applied to unfair competitive practices have not been strong enough.

In addition, there are not enough officials in charge of monitoring and dealing with unfair competitive practices, he said.

He suggested that HCM City establish a division for quickly dealing with unfair competitive practices.

Cao said the Decree 71/2014/ND-CP stipulating regulations for dealing with violation of competition matters, which will come into effect on September 15, will impose higher penalties in the form of warnings and fines.

Depending on the seriousness of the offence, additional sanctions may also be imposed, including withdrawal of a business registration certificate, revocation of a licence or practising certificate.

Organised by the HCM City WTO Affairs Consultation Centre, the seminar was attended by representatives of judicial departments from the city's districts as well as lawyers that represent enterprises. — VNS