On 20 June 2023, the National Assembly promulgated the new Law on Protection Of Consumers’ Rights No. 19/2023/QH15 (the “LPCR”), which shall take effect from 01 July 2024. Following the promulgation, the state authorities released the draft Decree detailing and guiding the LCPR (the “Draft Decree”).
The Draft Decree, also intended to take effect on the same date of LPCR, includes eight chapters mainly aiming to elaborate on the supervising of standard contracts, traders’ responsibility related to defective products, obligations of intermediary digital platform operators and large digital platform operators, and publication of warning information for consumers. Below are the key takeaways from the latest version of Draft Decree.
1. Elaboration of the “influencer” definition
The Draft Decree elaborates the definition of “influencer” as (i) famous people, (ii) experts, people with high expertise and influence in certain sectors, (iii) prestigious persons according to the laws, (iv) well-known persons in the mass media, and (v) other subjects as regulated by the laws. Despite the elaboration, there are no clear criteria and applicable measurements to determine whether a subject is an influencer, which may result in the case-by-case basis interpretation of the local authorities.
2. Standard contracts
Similar to Decree No. 99/2011/ND-CP guiding the current Law on Protection of Consumers’ Rights, the Draft Decree further provides some additional requirements on the formalities of standard contracts (i.e., language, font, size, clear format and straightforward content). Besides detailing the registration process for standard contracts, the Draft Decree regulates the coordination mechanism between state authorities in supervising standard contracts; one of which, the provincial People’s Committees are required to report annually regarding the status of standard contract management to the Ministry of Industry and Trade (the “MOIT”).
3. Responsibilities related to defective products
The Draft Decree regulates the traders’ responsibilities in case of defective products, including the procedure to announce the defective products and the product recall and the trader’s reporting obligation to the competent authorities regarding the recall. In particular, the traders must report the contemplated measurement before implementing the recall and report the result to the state authorities after completing the recall. In the event of necessity, the state authorities may request the trader to implement necessary measures in the recall program to protect consumer rights in accordance with the law.
The recall report will be submitted to the provincial People’s Committee in case the recall is implemented within one province or city or to the MOIT in case the recall is implemented in more than one province or city and other relevant authorities.
4. Obligations of intermediary digital platform operators
The operators of intermediary digital platforms must comply with the obligations as follows:
(a) To publicly announce criteria for determining priority for displaying products, goods, and services if the digital platform has a search function. In case the displayed content is paid or sponsored content, such information must be disclosed in the search results for products, goods, and services. The development and announcement of the application of criteria to determine the priority of displaying products, goods and services when using the search function must comply with relevant legal regulations.
(b) To submit an annual report to the MOIT within 30 (thirty) days from the report period. The report shall cover the main information including the followings:
– amendments to the regulations of the digital intermediary platform;
– the ownership of the platform and the responsibilities of the parties involved in managing and operating intermediary digital platform transactions;
– provision of information about business organizations and individuals operating on intermediary digital platforms upon the consumers’ requests;
– removal of feedback and reviews about organizations and individuals trading in products, goods and services that violate the law and are contrary to social ethics;
– receiving and resolving feedback, requests, and complaints from consumers on intermediary digital platforms;
– displaying priority of reviews, feedback, and recommendations of social organizations participating in protecting consumer rights or credit rating organizations according to the provisions of law;
– transparency of advertising activities in cyberspace;
– content and information censorship activities have been carried out at the request of competent state agencies;
– permitting and managing foreign business organizations and individuals to sell and provide products, goods and services to consumers in Vietnam; and
– measures are taken to handle violations by parties participating in transactions on the platform.
5. Obligations of large digital platform operators
The Draft Decree regulates that the large digital platform is the platform that qualifies one of any criteria as follows:
(a) The platform has 10,000 visits or more or has more than 1,000 members accessing in one month (statistics for six consecutive months) in Vietnam;
(b) The platform has a total transaction value arising from transactions in cyberspace in the Vietnamese market in one year (up to 31 December of the previous year or 12 immediately preceding months) of over 12,000 billion VND;
(c) The platform is established and operated by business organizations and individuals belonging to the group of five (05) market-leading business organizations and individuals in the field of e-commerce services according to the provisions of law on e-commerce;
(d) The platform is established and operated by business organizations and individuals belonging to a group of enterprises with a dominant market position according to the provisions of competition law; and
(e) The platform is a large, very large digital platform according to the law on electronic transactions.
The operators of the large digital platform must comply with the following obligations:
(a) The operator must establish a department responsible for evaluating compliance with the laws and regulations on consumer protection. This department must consist of trained employees on consumer protection laws, e-commerce laws, and other relevant laws.
(b) The operator must submit a compliance assessment report to the MOIT every six months within 30 days after the end date of reporting period. Among other information, the report must include information on the platform’s use of algorithms to target consumers, content moderation, the use of artificial intelligence, and the handling of fake accounts.
6. Publication of warning information for consumers in cyberspace transactions
The Draft Decree outlines the state authorities’ responsibilities regarding the publication and removal of consumer warning information in cyberspace transactions. Accordingly, the ministries, ministerial-level agencies, and provincial-level People’s Committees shall publicize information on organizations and individuals violating consumer rights laws. The information about including names, addresses, acts of violation, and relevant details must be announced through mass media and official websites. The time limit for publicizing violations is 30 days, after which the posting agency must cease or remove the information. Additionally, organizations and individuals facing violations must report to the relevant authorities and publicize the sanctioning decision within the stipulated timeframe. After this period, they may cease or remove information about the sanctioned violations.
The MOIT expects to summarize, study, and examine others’ opinions to finalize the Draft Decree in the coming December for presenting it to the Government.
For further information, please contact:
Nguyen Xuan Thuy, Partner, LNT & Partners