Potential risks of false advertising on social networks

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Individuals when performing false advertising on social media channels shall bear legal obligations according to the law on protection of consumer’s rights and the law on advertising. 

1. Law on protection of consumers’ rights:

Pursuant to the provisions of clause 1 Article 10 of the Law on protection of consumers’ rights 2010, the act of deceiving or misleading consumers via advertising activities, or hide or provide information that is incomplete, false or inaccurate, are considered as one of the acts prohibited by law.

In addition, the Law on protection of consumers’ rights also stipulates that advertisers, in the role of “third parties” in providing information about goods and services to consumers shall take joint responsibility for providing incomplete or inaccurate information, unless already done to prove all the measures prescribed by law to check the accuracy and completeness of information about goods and services, according to point c clause 1 Article 13 of the Law on protection of consumers’ rights 2010.

2. Law on advertising:

The act of advertising improperly about the quality and utility of products and goods is a prohibited act as prescribed in clause 9 Article 8 of the Law on Advertising 2012, as amended and supplemented in 2018.

Accordingly, in the case of violations of the above provisions, the violators may bear the following types of legal liability:

a.Administrative responsibilities(Clause 5, 7 and 8 Article 34 Decree 38/2021/ND-CP):

According to the provisions of clause 5 Article 34 of Decree 38/2021/ND-CP, stipulating penalties for administrative violations in the field of culture and advertising:

Main penalties:

Imposing the fine ranging from 60,000,000 dong to 80,000,000 dong for the act of putting false or misleading advertisements about the capability of trading or providing products, goods and services of individual or institutional traders; the quantity, quality, price, usability, design, packaging, trademark, origin, type, method of rendering or warranty period of registered or announced products, goods and services. Particularly for the case specified in clause 4 of Article 51, point b of clause 4 of Article 52, clause 1 of Article 60, and point c of clause 1 of Article 61 in Decree 38/2021/ND-CP, a different penalty will be applied as follow:

  • Clause 4Article 51:Imposing the fine of between 30,000,000 dong and 40,000,000 dong for the act of advertising cosmetic products to the extent that they are misunderstood as medicines.
  • Point bclause 4Article 52: Imposing the fine ranging from 20,000,000 dong to 30,000,000 dong for the act ofusing advertisements for functional foods to the extent that they are misunderstood as medicines.
  • Clause 1 Article 60: Imposing the fine ranging from 10,000,000 dong to 15,000,000 dong for the act of showing untruthful advertisements related to the nature, effects, quality and origin of animal feeds, aquafeeds, farming environmental remediation products and aquatic environmental remediation products.
  • Point c clause 1 Article 61: Imposing the fine ranging from 5,000,000 dong to 10,000,000 dong for the act of advertising plant varieties with incorrect information, or to the extent of causing confusion about, the business ability of the business or person (i.e. quantity, quality, selling price), contents shown on labels or marks.

Supplementary penalties:

Withholding the right to use the acknowledgement of receipt of registration for product launch announcement for the duration of between 05 and 07 months; the right to use the Certificate of advertisement content for the duration ranging from 22 to 24 months, for the violations specified in point a of clause 2, point b of clause 4 and clause 5Article34 Decree 38/2021/NĐ-CP, in case of commission of violations on advertising of health protection foods 2 or more times within the period of 06 months.

Remedies:

  • Compelling the removal, demolition and deletion or erasure of advertisements or the recall of printed newspapers and magazines with advertisements in case of commission of the violations;
  • Compelling ratification of false information with respect to the violations..

b. Civil responsibilities:

Pursuant to Point c, Clause 2, Article 12 of the Law on Advertising 2012, as amended and supplemented in 2018, the advertiser is obliged to responsible for their advertisements when directing advertising on the means of advertising; or being jointly responsible for the advertisements when hiring others to advertise.

Thus, consumers can sue the manufacturer of the product together with the person who has falsely advertised the product to claim compensation under the provisions of clause 3 Article 16 of the Law on Advertising 2012, as amended and supplemented in 2018, and Article 608 of the Civil Code 2015, when products, goods or services do not conform to standards, technical regulations, quality, quantity, features, uses, prices or other content advertised by the organization or individual.

c. Criminal responsibilities:

Pursuant to the provisions of Article 197 of the Criminal Code 2015, this act may constitute the crime of false advertising:

  • Any person who falsely advertises his/her goods or services despite the fact that he/she has incurred an administrative penalty or has an unspent conviction for the same offence shall be liable to a fine of from VND 10,000,000 to VND 100,000,000 or face a penalty of up to 03 years’ community sentence.

The offender might also be liable to a fine of from VND 5,000,000 to VND 50,000,000, be prohibited from holding certain positions or doing certain works for 01 – 05 years.