Advertisinglaw is founded on the recognition of the freedom of trade promotion forbusinesses. This law intends to develop business activities and the economy ingeneral. Therefore, a certain form of advertisement will be strictly prohibitedif it reaches a limit where the benefits of competitors, consumers and thecommunity are affected. This limit can be explicit in some cases, but ambiguousin others. That is why policy makers should be alert, but also consistent withefforts to facilitate the freedom of advertising at the highest level.
Comparativeadvertising used to be controversial issue in Europe, the cradle of world tradelaw. In the 70's, the question of whether or not comparative advertising shouldbe banned had been a matter of much debate to the lawmakers in these developedcountries. They reasoned that the comparison itself could pose potential risksof unfairness. During this period of time, except in the UK, the U.S. and a fewScandinavian countries, comparative advertising was not allowed in otherdeveloped countries.
However,with the development of the commercial law, the issue was given thoroughconsideration on the ground of expanding the right of access to information forconsumers, freedom of advertising and freedom of speech for companies, and thecommon interest of the business environment. Accordingly, comparativeadvertising was seen as necessary, because it provides consumers with moreinformation on product quality and value, so they can make better purchasingdecisions. In addition, comparative advertising, if carried out in a fair andtruthful manner, promotes market transparency, stimulates competition amonggoods and service providers for the benefit of consumers, and therefore helpsthe economy develop,
Therefore,in 1997, Europe officially made comparative advertising legal, on the conditionthat the comparison is made for goods and services of the same type, and theinformation provided is fair, truthful, verifiable, not misleading, and withoutdiscrediting or taking advantage of competitors' reputation (Definition ofComparative Advertising – Prof. Peter Miskolczi Bodnar – University ofMiskolc).
InVietnam, comparative advertising is regulated by the Competition Law of 2005,in which companies are not allowed to use direct comparisons for advertisingtheir goods and services. Thus, lawmakers have chosen a safe path by strictlyprohibiting comparative advertising, rather than assessing its values in orderto protect the freedom of companies. On the other hand, other forms ofadvertisement where direct comparisons might not be used but containinformation harmful to competitors have been ignored, like in the case ofAcecook vs. Masan. The Competition Authority refused to take the case, startingthat Masan's ad did not have direct comparisons, although they admitted thatthe ad did discredit and unfairly attack its competitor.
Thecase of Rolls Royce vs. Mazda (Japan) is a good example of taking unfairadvantage of a competitor's reputation. Rolls Royce had sued Mazda forfeaturing one of its products as “The family's new Rolls” in an advertisingcampaign, and a Swedish court had ruled in favor of Rolls Royce (the ECDirective on Comparative Advertising and its Implementation in the NordicCountries: Especially in Relation to Intellectual Property – Ulf Bernitz -Stockholm Institute for Scandinavian Law (1957 – 2009). Unfortunately, inVietnam, such cases cannot be settled under the Competition Law.
Thedraft Law on Advertising has defined various forms of comparative advertisingin more detail than the Competition Law. In fact, regulations on comparativeadvertising can be governed by the Competition Law (Laws on Advertising tocomply with international standards – Prof. Dr. Nguyen Van Nam), but whilewaiting for the Competition Law to be modified, the Advertising Law can offer abetter framework for comparative advertising.
However,the draft Law on Advertising, like the Competition Law, fails to provide adefinition of comparative advertising. Comparative advertising, as defined bythe EU, is “any advertising which explicitly or by implication identifies acompetitor or goods or services offered by a competitor” (Directive 97/55/EC ofthe European Parliament and of the Council of 6 October 1997 amending Directive84/450/EEC). The lack of such a definition would make the advertising lawincomprehensive in covering a wide variety of negative forms of comparativeadvertising in the marketplace, and at the same time, it can hamper the freedomof business promotion for companies by prohibiting any advertising that doesnot give a comparable correlation.
Thisis possible because of the prohibition from using words and terms such as “themost”, “the only one,” “the best” and “number one” or those with similarimplications. The usage of these words and terms does not denote anycomparison, and in common practice, overstatement can be accepted.
TheAdvertising Act is an important part of commercial law. Of all the unfaircompetition cases settled by the Competition Administration Agency in 2011, 34of 36 cases involve negative advertising practice (2011 Annual Report -Competition Authority). It is obvious that the development and promulgation ofthe advertising law is crucial, especially in the context of the currentinternational integration of Vietnam.
“TheBusiness Law is attractive when it can balance interests” (Law Lesson:Recognizing and Constructing Justice – Dr. Pham Duy Nghia) and it is still anissue of much debate to make this possible with comparative advertising.
Lu Lam Uyen, LLM – Faculty of Law University of Economics.