Lawyer Nguyen Hoai Son: How to handle violations of e-commerce platform Temu?

Lawyer Nguyen Hoai Son said that Temu's launching of a Vietnamese website and app without registering with the Ministry of Industry and Trade and launching "huge" promotions is a violation of Vietnamese law.

Temu not registered - how to deal with it?

Recently, cross-border e-commerce platforms such as Temu, Shein, 1688... have built Vietnamese versions of websites and apps, conducting business activities in Vietnam to attract consumers as well as merchants who want to trade in cheap goods.

It is worth mentioning that despite having business activities, these cross-border e-commerce platforms have not registered their operations with the Ministry of Industry and Trade. This has attracted great attention and become a hot topic in many media outlets.

Currently, Temu is not licensed to operate in Vietnam (Photo: Fortune)

Regarding this issue, sharing with reporters of Cong Thuong Newspaper, Lawyer Nguyen Hoai Son - Director of Asia Law Company Limited (ASIALAW) said that first, it is necessary to determine whether foreign e-commerce platforms operating in the digital environment in general are subject to regulation by Vietnamese law or not?

Accordingly, Decree No. 85/2021/ND-CP amending and supplementing a number of articles of Decree No. 52/2013/ND-CP on e-commerce stipulates that foreign traders and organizations with websites providing e-commerce services in Vietnam are traders and organizations with Vietnamese domain names; or with Vietnamese display language; or with more than 100,000 transactions from Vietnam in a year.

Thus, according to the above regulations with Temu, this e-commerce platform has a Vietnamese version of the website and app, has a large transaction volume, so it is subject to the regulation of this Decree.

According to Clause 24, Article 1, Decree 85/2021/ND-CP, foreign traders and organizations with websites providing e-commerce services in Vietnam must register e-commerce activities with the Ministry of Industry and Trade and establish a representative office in Vietnam or appoint their authorized representative in Vietnam.

Therefore, Lawyer Nguyen Hoai Son affirmed that, up to now, although Temu has not registered its commercial activities with the Ministry of Industry and Trade, it has provided a Vietnamese version of the website and app for other traders to do business on this platform, which is not in compliance with Vietnamese law.

On the other hand, regarding the program, form, and level of promotion, Lawyer Nguyen Hoai Son also said that Decree No. 128/2024/ND-CP amending and supplementing a number of articles of Decree No. 81/2018/ND-CP dated May 22, 2018 of the Government detailing the Law on Commerce on trade promotion activities stipulates: The material value used for promotion for a unit of goods or services being promoted must not exceed 50% of the selling price immediately before the promotion period of that unit of goods or services being promoted.

However, many e-commerce platforms, including Temu, are currently offering huge promotions with discounts of up to 70%, 80%, or even 90%, which is not only to attract customers, but also to promote Temu's image in the Vietnamese market. The above promotional tactics also show signs of violating Vietnam's trade promotion regulations.

According to Lawyer Nguyen Hoai Son, the first thing to do with Temu is to quickly request this organization to register its operations in Vietnam so that the authorities have enough legal basis to manage, as well as apply direct and specific handling measures if violations are detected.

"If Temu has not registered to operate in Vietnam and is not subject to legal regulation, it will be very difficult to handle," emphasized Lawyer Nguyen Hoai Son.

Control goods from e-commerce channels

According to statistics from the Department of E-commerce and Digital Economy (Ministry of Industry and Trade), Vietnam is one of the countries with an average e-commerce growth rate of 25%/year, among the top compared to other countries in Southeast Asia. The e-commerce retail market is estimated to reach 20.5 billion USD in 2023, the number of online shoppers is currently exceeding 61 million people and the online shopping value of one person is about 336 USD.

In the context of current international economic integration along with the rapid and dynamic development of e-commerce, Vietnam has become a new destination for cross-border e-commerce platforms. However, the issue that consumers are skeptical about is the price and quality of goods on these e-commerce platforms.

Temu launches Vietnamese language to attract consumers.

According to the results compiled by the social media listening platform SocialHeat of YouNet Media Company, many consumers who have experienced it frankly commented that the prices on Temu are not cheap, even higher than Shopee (accounting for 11% of the discussion). At the same time, many users also expressed doubts about the quality of products sold on Temu (accounting for 5% of the discussion).

Lawyer Nguyen Hoai Son noted that Temu and foreign e-commerce platforms, if qualified to do business in Vietnam, must also be responsible for coordinating with state management agencies in preventing transactions of goods and services that violate the law, such as counterfeit goods, fake goods, and poor quality goods; perform the obligation to protect consumer rights and product and goods quality according to the provisions of Vietnamese law. At the same time, perform the obligation to report to the Ministry of Industry and Trade statistics on the situation of operations.

In particular, Temu and other e-commerce platforms are responsible for authenticating the identities of foreign traders and organizations selling goods on e-commerce trading platforms for management by Vietnamese authorities.

Previously, on October 26, Minister of Industry and Trade Nguyen Hong Dien signed Official Dispatch 8598/BCT-TMĐT to units under the Ministry on strengthening state management of e-commerce.

It requires affiliated units to review legal factors, propose solutions to handle illegal cross-border e-commerce platforms, and propose solutions to control goods imported into Vietnam through e-commerce channels.

Propose solutions to handle promotional forms that do not comply with legal regulations for e-commerce platforms.

Develop standards and regulations for products under the management of the Ministry of Industry and Trade to help businesses improve product quality, packaging and labels, and build brands.

Temu is a cross-border e-commerce platform, founded by PDD Holdings (China). The emergence of Temu has caused concern among governments of many countries about the competitiveness of domestic retailers and small and medium-sized manufacturing enterprises.

Recently, the Indonesian government has issued a ban on Temu to protect domestic businesses and prevent cheap Chinese goods from flooding the country.

The Thai government is also studying measures to tax Temu to prevent cheap Chinese products from flooding the country's market.

Temu is also currently under the attention of the US government due to concerns related to user data security and product origin. However, no official ban has been issued for this application.

Source: https://congthuong.vn/luat-su-nguyen-hoai-sonxu-ly-san-thuong-mai-dien-tu-temu-sai-pham-the-nao-355600.html