Regulations on online commercial advertising in vietnam

HO CHI MINH CITY UNIVERSITY OF LAW MANAGING BOARD OF SPECIAL TRAINING PROGRAMS  - BACHELOR THESIS MAJOR IN COMMERCIAL LAW REGULATIONS ON ONLINE COMMERCIAL ADVERTISING IN VIET NAM STUDENT: NGUYEN AN BINH STUDENT CODE: 105.501.0020 CLASS: CLC35 SUPERVISOR: ASSOC PROF DR BUI XUAN HAI HO CHI MINH CITY 2014 ACKNOWLEDGMENT This thesis has been written during the period of April 15th – July 20th, 2014 at Ho Chi Minh City University of Law First of all, I would like to sincerely acknowledge to my supervisor Assoc Prof Dr Bui Xuan Hai I have had great experiences from his constructive suggestions and valuable assistance for my thesis Secondly, I must be obliged to my parents, sisters, brothers and nephews for the spiritual encouragement Last but not least, I am extraordinarily thankful to my friends and other surrounding people, who support me in various ways COMMITMENT I hereby declare that this thesis is my own work under the guidance of my supervisor In case that other sources of information have been used, they are duly acknowledged in the text and the bibliography July 20th, 2014 Nguyen An Binh ABBREVIATIONS Abbreviation CL 2005 LOA OCA Explanation Commercial Law 2005 Law on Advertising 2012 Online commercial advertising TABLE OF CONTENTS INTRODUCTION 1 Purpose of research Scope of research Method(s) of research Significance Literature review CHAPTER THEORETICAL ISSUES ON ONLINE COMMERCIAL ADVERTISING 1.1 The history of advertising in the Internet 1.2 Definition of online commercial advertising 1.2.1 Definition of commercial advertising 1.2.2 Definition of online commercial advertising 1.3 Classification of online commercial advertising 1.4 Characteristics and particularities of online commercial advertising 1.4.1 Characteristics of online commercial advertising 1.4.2 Difference from other kinds of advertising 1.5 Roles of online commercial advertising 12 1.5.1 Economic roles 12 1.5.2 Cultural and social roles 14 Conclusion of Chapter 15 CHAPTER REGULATIONS ON ONLINE COMMERCIAL ADVERTISING IN VIET NAM 16 2.1 The Subjects of Online Commercial Advertising 17 2.1.1 The subjects participating in online commercial advertising 17 2.1.2 The relationship between Law on Advertising and Commercial Law 2005 in governing the issue of subjects in online commercial advertising 20 2.2 The objects of online commercial advertising 23 2.3 Requirements to conduct online commercial advertising 25 2.3.1 Requirements towards subjects 25 2.3.2 Requirements to conduct online commercial advertising in the website of foreign organizations and individuals which provide the trans-boundary advertising service arising the turnover in Viet Nam 26 2.3.3 Requirements towards the form of contract 28 2.3.4 Requirements to objects of advertising 28 2.3.5 Requirements to conduct online commercial advertising in online publishing 30 2.4 Rights and obligations of subjects of online commercial advertising 30 2.4.1 Rights and obligations of the advertiser in online commercial advertising 30 2.4.2 Rights and obligations of the advertising service provider in online commercial advertising 32 2.4.3 Rights and obligations of the advertisement publisher in online commercial advertising 33 2.4.4 Rights and obligations of the advertisement receiver in online commercial advertising 35 2.5 The advertising behaviors banned in online commercial advertising 39 2.5.1 Advertising games that are contrary to regulations of Viet Nam 39 2.5.2 Advertising with the contents which are unartistic, on the contrary to the tradition of history, morality, habits and customs of Vietnamese 40 2.5.3 Advertising goods, services, which are in the banning list under Vietnamese regulations 41 2.5.4 Advertising with the aim of unfair competition 41 2.5.5 Advertising with the use of advertising products that violate the intellectual property rights 43 2.5.6 Advertising induces the children to think, to speak, to take action in the way that is contrary to the morality, the beautiful of habits and customs of our nation; adversely affects the health, safety or the normal growth of children 43 2.1.7 Other violating behaviors in online commercial advertising 44 Conclusion of Chapter 45 CHAPTER RECOMMENDATIONS FOR IMPROVING REGULATIONS ON ONLINE COMMERCIAL ADVERTISING IN VIET NAM 46 3.1 Amending the definition of the Advertiser 46 3.2 Amending the regulation on the form of the advertising service provision contract 46 3.3 Improving the process of confirmation 47 3.4 Supplementing the regulation that recognizes some kinds of online advertising 47 3.5 Amending regulations relating to the issue of protecting advertisement product 48 3.6 Amending the regime of online advertising management 49 3.7 Improving protection measures for the right to refuse advertisements of advertisement receivers 49 3.8 Promulgating the Decree governing Online Advertising 50 3.9 Establishing the tax preference policies for enterprises, individuals that contribute to Vietnamese culture and society development through online commercial advertising 51 3.10 Removing terms as “unartistic”, “on the contrary to the tradition of history, morality, habits and customs of Vietnamese” in regulations on advertising 51 CONCLUSION 53 INTRODUCTION Purpose of research In the commerce, commercial Advertising plays the important role to promote the trade Nowadays, along with the increasing of the Internet, commercial advertising appears in many online channels such as online newspapers, forums, or even social utilities (Facebook, Twitter, Zingme ) Large corporations in many fields have taken advantage of the Internet to put their image to the public in order to make impression in their customers’ eyes In this way, their sale efficiency is increasing higher On the other side, the customers have more choices of goods Meanwhile, the online advertising contributes to the profits of service However, in Viet Nam, the reality of online commercial advertising is not as bright as the world’s There is a paradox that the number of Vietnamese people using the Internet reaches 34 million (estimated in 2013) while the budget for online commercial advertising makes up less than 1% of the whole budget for advertising This means that the enterprises of Viet Nam not effectively exploit the wide Internet-based space to advertise Besides, the dreary facts occur daily that no much money from tax on the online commercial advertising is donated to State’s budget as well as many violations in this activity have not been handled in the right way In the author’s point of view, one of reasons for this fact is lacking of the legal framework that governs online commercial advertising effectively Thus, it is expected that the author, through this thesis, try to find out best recommendations for improving Vietnamese regulations on online commercial advertising Scope of research This thesis firstly introduces the general information about OCA Afterwards, it presents and analyzes legislations on OCA in Viet Nam and furthermore, the practice of running those regulations in order to put forward suitable recommendations Therefore, it is noted that there is no profound research on foreign legislations The reason why the author picks out this way is that OCA relates to the factor of culture; as a result, in addition to finding out one country’s regulations on OCA, the author must learn about its culture to understand the legal aspect exactly This task requires more space and time while limitations on the bachelor thesis not allow the author to carry out Furthermore, in the media trend in Viet Nam, people spend more time surfing Internet while a number of minutes for watching television are downward – See: Appendix of the thesis Method(s) of research Here are methods that would be applied in this thesis: The first method is generalizing Through this way, the author would collect information from various reliable sources reasonably and scientifically The second one is analyzing The author would utilize this method in order to find out regulations on OCA in Viet Nam Thus, it could regarded as the most vital method in the thesis The third kind is illustration In the thesis’s topic, the author finds that fact that it is more interesting to utilize examples or pictures to illustrate/explain issues The fourth method is conducting survey and statistics It is for enhancing arguments presented and for acknowledging the factual issue Significance Firstly, the author provides the general knowledge of OCA in aspects of Economy and Law Secondly, the author analyzes Vietnamese regulations on OCA in order to find out its irrational points in reason and reality Thirdly, acquiring the direction of Communist Party in the culture improvement combined with collecting the result of legal analysis and fact, the author would propose some recommendations to improve Vietnamese regulations on OCA Literature review This section presents a summary of the research findings that have been identified in the literature with respect to my thesis: Hap Thi Nhu Nguyet (2011), The implementation of the law governing commercial advertisement: reality and recommendation, Bachelor thesis, Ho Chi Minh City University of Law Initially, this thesis gives the overview of Commercial Advertising such as its history, definition, characteristics Afterwards, the thesis researches Vietnamese regulations on issues relating to Commercial Advertising, which consists of parties, conditions for operating commercial advertising, rights and obligations of parties From that findings, thesis presents adversities and unreasonable points from the implementation of regulations on commercial advertising in Viet Nam James D Ratliff and Daniel L Rubinfeld, Online Advertising: Defining Relevant Markets (2010), Journal of Competition Law and Economics, (3), p 653 - 686 This paper paper provides an overview of the development of Internet advertising Also, the authors offer a broad overview of both online and offline advertising and the economic models that allow one to evaluate competition among advertisers Phan Ngoc Thao – Nguyen Quoc Hieu (2013), Quảng cáo thương mại mạng Việt Nam (The commercial advertising in the network in Viet Nam), Scientific Research in Eureka contest, Ho Chi Minh City This research shares the overview information of Online Commercial Advertising Besides, the authors would supply the facts of applying the regulations on Online Advertising in Viet Nam However, this research did not focus on the legal analysis as much as the reality analysis Indeed, there is no very apparent definition for the term of “the tradition of history, morality, habits and customs of Vietnamese”; as a result, it is actually hard for lawmakers to determine how being “unartistic and on contrary to the tradition of history, morality, habits and customs of Vietnamese” is Consequently, the author would propose that the lawmakers remove those terms in legislations of advertising; instead, they put the other specific standards In details, it should be regulated that the advertisement does not contain the factor of stimulating sex, violation… 52 CONCLUSION Resulting from the acquirement that the increasing of Online Commercial Advertising in Viet Nam is as dramatic as expected mainly due to the ineffective legal framework139, the author takes into consideration of crucial regulations which govern the Online Commercial Advertising in Vietnam legal system With many methods such as analyzing, comparing, generalizing, the author would find out the shortcomings and then propose the compatible recommendations for improving regulations In addition, in acknowledgment that perfecting the legal framework but the measures for assurance does not make sense, the author also presents some methods that ensure the effective implementation of regulations In facts, a variety of legislations such as LOA, CL 2005, Law on Publishing, Law on Newspaper, Law on Information Technology… and their legal documents in OCA governing lead to adversities for subjects including advertiser, advertisement publisher, advertising service provider or even advertisement receiver to determine their obligations and rights Furthermore, there are some irrational points as applying the confirmation process in other kinds of advertising to OCA, regulating two authorities to govern this activity (Ministry of Culture, Sport and Tourism (i) and Ministry of Information and Transmission) Confronted with that situation, the author suggests that the OCA governing should be separated from other advertising kind adjustment as issuing particular decree, uniting the management authority (Ministry of Information and Transmission, no longer comprising Ministry of Culture, Sport and Tourism as before); besides, other crucial problems such as creating the preference policy for enterprises that contribute to culture development of Viet Nam through OCA, improving some regulations to be better However, in its own scope, this thesis is not researching profoundly on the foreign legal framework for Online Commercial Advertising The reason why is that the Advertising even relates to the culture factor; hence, as doing research on the country’s legal regulations concerning this issue, one must have found out the culture and society of that country to understand laws in the accuracy and objectiveness manner Nevertheless, the limitations on the bachelor thesis not allow the author to obtain this task Thus, the author would expect that the next literatures would take it into account of the foreign legal framework for online commercial advertising (esp United States, Australia140) in order to put forward the more effective recommendations 139 This argument is presented in the conclusion of Chapter The reason why the author chooses those nations’ regulations as suggestions of objects for the next literatures is that they are two of countries that run the actually large online commercial advertising markets – See section 1.1.2 of the thesis 140 53 BIBLIOGRAPHY I Legislation(s) Vietnamese Civil Code 2005 Circular 08/2013/TT-BYT dated on March 13th, 2013 guiding the activity of advertising foods that are under management of Ministry of Health Circular 10/2013/TT-BVHTTDL dated on December 6th, 2013 specifying and guiding some articles of Law on Advertising and Decree 181/2013/ND-CP Commercial Law 2005 Constitution of Viet Nam 2013 Decree 37/2006/ND-CP dated on April 4th, 2006 specifying regulations of Commercial Law 2005 on trade promotion Decree 59/2006/ND-CP dated on June 12th, 2006 specifying regulations Commercial Law on goods, services that are banned, limited in business and that are conditioned in business Decree 43/2009/ND-CP dated on May 7th, 2009 supplemeting and amending List of goods and services that are banned in business of Decree 59/2006/ND-CP Decree 47/2009/ND-CP dated on May 13th, 2009 on handling of administrative violations of copyright and related rights 10 Decree 181/2013/ND-CP dated on November 14th, 2013 elaborating some articles of the Law on advertising 11 Decree 72/2013/ND-CP dated on July 15th, 2013 on management, provision, and use of internet services and online information 12 Decree 158/2013/ND-CP dated on December 11th, 2013 on handling of administrative violations in fields of culture, sport, tourism and advertising 13 Decree 132/2013/ND-CP dated on October 16th, 2013 on functions, missions and authorities of Ministry of Information and Transmission 14 Decree 181/2013/ND-CP dated on November 14th, 2013specifying some articles of Law on Advertising 15 Law on Advertising 2012 16 Law on Competition 2004 17 Law on Consumer’s Right Protection 2010 18 Law on Enterprises 2005 19 Law on Information Technology 2006 20 Law on Intellectual Properties 2005 21 Law on Legal Document Issue 2008 22 Law on Newspaper 1989 amended and supplemented in 1999 23 Law on Publishing 2012 24 Law on Quality of Goods and Products 2009 25 Law on Tax on Individual’s income 2007 amended and supplemented in 2012 26 Law on Tax on Enterprise’s income 2008 amended and supplemented in 2013 27 Ordinance on Advertising 2001 28 Resolution of the fifth conference of 8th Central Committee of Communist Party of Viet Nam on constructing and developing advanced culture imbued with national character 29 Resolution 48-NQ/TW of Communist Party 30 Resolution 71/2006 of National Assembly on ratifying Protocol of accession to World Trade Organization of Socialist Republic of Viet Nam 31 Resolution of the ninth conference of the eleventh Central Committee of Communist Party of Viet Nam on developing the culture and the human English 32 AANA Code of Ethics II Book(s) Vietnamese 29 Dao Huu Dung (2004), Quảng cáo truyền hình kinh tế thị trường (Television and Advertising in market economy – Analysis and Evaluation), National University Press 30 Mekong river development project (2001), Khuếch trương sản phẩm quảng cáo (Expanding products and advertising), Youth Publishing House 31 HCMC University of Law (2013), Commercial Law textbook, Hong Duc Publishing House English 32 Greg Helmstetter (1997), Increasing hits and selling more on your website, copyright in 1997, Wiley Computer Publishing 33 Mairi Macintypre, Glenn Parry, Jannis Angelis (editors) (2011), Service Design and Delivery, Springer 34 Prof Dr Mai Hong Quy (editor) (2013), Introduction to Vietnamese Law, Hong Duc Publishing House – Viet Nam Lawyers Association III Journals English 35 Benjamin Edelman, Michael Ostrovsky, and Michael Schwarz (2007), “Internet Advertising and the Generalized Second-Price Auction: Selling Billions of Dollars Worth of Keywords”, American Economic Review, (97), p 242-259 36 David S Evans (2009), “The online Advertising Industry: Economics, Evolution, and Privacy”, Journal of Economic Perspectives, (23), p 37-60 37 Jos Hornikx, Daniel J O’Keefe (2009), “Adapting Consumer Advertising Appeals to Cultural Values”, Communication Yearbook, (33), p 38-71 38 Jianping Peng, Guoying Zhang, Shaoling Zhang, Xin Dai, Jing Li (2014), "Effects of Online Advertising on Automobile Sales", Management Decision, Vol 52 Iss: 5, p.834 - 851 IV Theses 39 Dang Quoc Chuong (2011), Hoàn thiện pháp luật chống cạnh tranh không lành mạnh lĩnh vực quảng cáo thương mại (Improving the unfair competition prevention regulations in the commercial advertising aspect), Master thesis, Ho Chi Minh City University of Law 40 Nguyen Thi Tam (2010), Pháp luật quảng cáo thương mại qua báo chí, thực trạng áp dụng hướng hoàn thiện (Regulations on Commercial Advertising through newspapers, practices and solutions), Master thesis, Ho Chi Minh City University of Law 41 Phan Ngoc Thao – Nguyen Quoc Hieu (2013), Quảng cáo thương mại mạng Việt Nam (The commercial advertising in the network in Viet Nam), Scientific Research that participates in Eureka contest of Ho Chi Minh City 42 Vo Linh Phuong (2008), Cơ sở pháp lý nhằm nâng cao vai trò hoạt động xúc tiến thương mại kinh tế thị trường Việt Nam (The legal basis is for enhancing the role of the trade promotion in the current marketing economy of Viet Nam), Bachelor thesis, Ho Chi Minh City University of Law 43 Dang Thi Thu Trang (2007), Bồi thường thiệt hại vi phạm quyền lợi người tiêu dùng - Những đề lý luận thực tiễn (Compensating owing to the violation of the rights of consumers – Theoretical and practical issues), Bachelor thesis, Ho Chi Minh City University of Law 44 Dinh Thi Trang (2013), Quy định pháp luật quảng cáo thương mại theo luật thương mại năm 2005 Luật quảng cáo năm 2012 (Regulations on Commercial Advertising under Commercial Law 2005 and Law on Advertising 2012), Bachelor thesis, Ho Chi Minh City University of Law 45 Duong Thi Tuyet (2007), Tìm hiểu khác biệt theo giới học sinh THPT mức độ sử dụng game online Thành phố Hà Nội (Finding out the difference between students’ online game playing measures in term of sex in Ha Noi City), Bachelor thesis, Ha Noi University of Education V Report(s) and other kinds 46 Viet Nam E-commerce Association (VECOM) (2012), Report of Viet Nam Ecommerce index in Year of 2012 47 Legal propaganda and education Bureau of Ministry of Justice and Local culture of Ministry of Culture, Sport and Tourism, “Draft of Introduction to Law on Advertising 2012” VI Online Websites 48 Ngo Thuy An (2013), “Quảng cáo cần có cảm xúc văn hóa” (Advertising needs the cultural feeling), available at: http://www.marketingchienluoc.com/marketing/ki%E1%BA%BFnth%E1%BB%A9c-marketing/19325-qu%E1%BA%A3ng-c%C3%A1oc%E1%BA%A7n-ph%E1%BA%A3i-c%C3%B3-c%E1%BA%A3m-x%C3%BAcv%C4%83n-h%C3%B3a 49 Mai Huong - Chi Mai, “Thảm họa câu view - Kỳ cuối: Pháp luật phải mạnh tay” (Disaster of drawing views – Last installment: Law needs the strong measures), Tuoitre Online, available at: http://tuoitre.vn/Chinh-tri-Xa-hoi/Phong-su-Ky-su/578667/tham-hoa-cau-viewky-cuoi-phap-luat-phai-manh-tay.html 50 Le Quang Minh (2010), “The rate of students participating in games is extremely high”, Tien Phong Online, available at: http://www.tienphong.vn/Khoa-Giao/ty-le-choi-game-cua-hoc-sinh-dang-o-mucrat-cao-522494.tpo 51 Thuy Minh, “Gần 2000 sở thực phẩm chức vi phạm (“Almost 2000 units that business of functional food violates laws”), VNMedia Online newspaper, available at: http://vnmedia.vn/VN/suc-khoe/tintuc/73_2676230/gan_2_000_co_so_thuc_pham_chuc_nang_vi_pham.html 52 Vu Thanh Tam, Quảng cáo báo chí – vài đề xuất pháp lý (Advertising in newspapers – some legal recommendations), available at: http://duthaoonline.quochoi.vn/DuThao/Lists/DT_TAILIEU/Attachments/981/8 Vu_Thanh_Tam.doc 53 Thanh Tra, “10 ngành quảng cáo trực tuyến nhiều Việt Nam” (“10 groups of the most online advertising field in Viet Nam”), Xa hoi thong tin Online, available at: http://xahoithongtin.com.vn/10-nhom-nganh-quang-cao-truc-tuyen-nhieu-nhattai-viet-nam-d18998.html 54 LLM Le Quoc Thinh, “Nhầm lẫn thực phẩm chức thuốc – SOS” (“Mistake functional foods for medicine – SOS”), Suc khoe & Doi song Online, available at: http://suckhoedoisong.vn/duoc-si-tu-van/nham-lan-giua-thuc-pham-chuc-nangva-thuoc-sos-20100920033712157.htm English 55 Jeff Pelline (1998), Pay-for-placement gets another shot, CNET News, available at: http://news.cnet.com/Pay-for-placement-gets-another-shot/2100-1023_3208309.html 56 Danny Sullivant (1998), GoTo Going Strong, Search engine watch, available at: http://searchenginewatch.com/2166331 57 Nancy Wagner, “How much does television advertising really cost?”, Houston Chronicle Online, available at: http://smallbusiness.chron.com/muchtelevision-advertising-really-cost-58718.html VII Other websites 58 http://cleverads.vn/ 59 http://colgate.com.vn/ 60 http://economictimes.indiatimes.com/ 61 http://www.internetlivestats.com/ 62 http://kenh14.vn/ 63 http:// ldoceonline.com/ 64 http://linhkiem.vn/ 65 http://www.omovietnam.com/ 66 http:// sensodyne.com.vn/ 67 http://www.slideshare.net/ 68 https://support.google.com/ 69 http://www.thmilk.vn/ 70 http://thanhnien.com.vn/ 71 http://tuoitre.vn 72 http://www.vccorp.vn/ 73 http:// vinamilk.com.vn/ 74 http://vnexpress.net/ 75 http://vietbao.vn/ 76 http://vietnamnet.vn/ APPENDIX GROUP OF PHOTOS TO ILLUSTRATE THE KINDS OF ONLINE COMMERCIAL ADVERTISING Photo – OCA’s form of banner Just in a half of the home page of VNE, there are seven banners used for advertising products Photo – OCA’s form of Textlink (See the orange square) Photo – OCA’s form of logo (See the red oval) Photo – OCA form of video in kenh14.vn (See the red circle) Photo – OCA’s form of interaction (See the black circle) APPENDIX Group of photos to illustrate some arguments Photo - Obviously it is hard to get the information in this site owing to the unreasonable advertisement placement Photo – The advertisement of OMO in South Africa, which may be inconsistent with Vietnamese culture Photo – It is showed that the spam in commercial advertising still occurs daily (the author’s email) APPENDIX THE CHART TO SHOW THE MEDIA TREND OF SOCIETY IN VIET NAM141 160 140 120 100 2008 80 2010 60 2012 40 20 Television Newspaper Magazine Radio Internet Average Minutes Spent per Day 141 Source: The presentation of Mr Tom Simpson, Head of Digital Department, Mindshareworld – Group M in Conference of Online Marketing Direction in Year of 2013, which was held in Ho Chi Minh City on date of 29/12/2012 APPENDIX THE RESULT OF SURVEY CARRIED OUT BY THE AUTHOR The survey is carried out by the author from 21:00 July 14th, 2014 to 00:00 July 19th, 2014 in the Internet environment Crucial information about this survey  A number of people taking the survey: 84;  Age range: 18-23;  Sex rate:  Male: 45.24%  Female: 54.76%  Most occupation: Student (96.43%) TABLE The rate of attention towards online commercial advertisements Regard Disregard 46.43% 53.57% TABLE The rate of feeling as facing online commercial advertisements Feeling alright Feeling annoyed Feeling comfortable Feeling impressive 35.71% 52.38% 2.38% 9.52% TABLE The rate to show the frequency of online procurement Often Sometimes Rarely Never 17.86% 39.29% 30.12% 13.41% TABLE The rate of website kinds that has been mostly visited Sale websites (nhommua,muachung…) Homepage of Social networks (Facebook, Twitter, Zingme…) Others 43.84% 20.55% 30.14% 5.48%