The continuous advancement of information technology and communication has created a conducive environment for the flourishing of online business operations.  E-commerce has emerged as an indispensable facet of commercial trade, delivering significant value and substantial advantages to business entities.  Analogous to conventional business undertakings, e-commerce activities must comply not only with direct regulations regarding electronic commerce but also with other relevant legal provisions such as investment, commerce, and civil laws.  Thus, it becomes imperative to explore the legal framework governing e-commerce, including the specific parameters and constraints imposed within this domain.

What is an e-commerce activity?

For starters, according to Article 3(1) of the Vietnam Commercial Law 2005, commercial activities mean activities for the purpose of generating profits, including: sale and purchase of goods, provision of services, investment, commercial promotion, and other activities for the profit purpose. Additionally, Article 3(1) of Decree 52/2013/ND-CP defines e-commerce activity as a conducting part or the whole of the process of commercial activity by electronic means connected to the Internet, mobile telecommunications network, or other open networks. Hence, electronic commerce activities encompass various trading activities such as online purchasing, selling, payment, ordering, advertising, and delivery, which are carried out through e-platforms by establishing all or part of the process involved in the buying and selling of goods or provision of services, ranging from product showcasing, contract formation, service provision, payment, to post-sales services.

The subjects of e-commerce activities, as stipulated by Article 24 of Decree 52/2013/ND-CP amended by Decree 85/2021/ND-CP, are as follows: Traders, organizations or individuals that develop e-commerce websites by themselves to serve their commercial promotion, sales or service provision (owners of sales e-commerce websites) Traders, organizations or individuals that develop e-commerce websites to provide an environment for other traders, organizations or individuals to conduct their commercial promotion, sales or service provision (traders or organizations providing e-commerce services) Traders, organizations or individuals that use websites of traders or organizations providing e-commerce services to serve their commercial promotion, sales or service provision (sellers) Traders, organizations or individuals that purchase goods or services on sales e-commerce websites and e-commerce service provision websites (customers) Traders or organizations providing technical infrastructure for owners of sales e-commerce websites and for traders and organizations providing e-commerce services (traders or organizations providing infrastructure) Traders, organizations or individuals that use electronic equipment connected to other networks for carrying out commercial activities.

How are the Organizational Forms of e-commerce activities regulated?

The regulatory framework concerning the organizational forms of e-commerce activities is delineated hereafter. Pursuant to Article 25 of Decree 52/2013/ND-CP, as amended by Decree 85/2021/ND-CP, the following categories are recognized:

  • Sales e-commerce website is an e-commerce website developed by traders, organizations, or individuals by themselves to serve their commercial promotion, sales, or service provision.
  • E-commerce service provision website is an e-commerce website developed by traders or organizations to provide an environment for other traders, organizations, or individuals to conduct their commercial activities. The e-commerce service provision website is of the following types: E-commerce trading floor; Online auction website; Online promotion website; Other types of websites as stipulated by the Ministry of Industry and Trade.
  • With the applications installed on electronic devices connected to the network that allow users to access the databases of other traders, organizations, and individuals to purchase and sell goods, provide, or use services, depending on the utilities of these applications, traders or organizations shall comply with this Decree’s provisions on sales e-commerce website or e-commerce service provision websites.
  • The Ministry of Industry and Trade shall stipulate e-commerce activities conducted on the mobile telecommunications network.

Thus, in compliance with the aforementioned provisions, individuals and entities partaking in diverse forms of electronic commerce transactions through websites must adhere to the regulations governing the registration and management of e-commerce websites as prescribed by the Ministry of Industry and Trade.

Principles of E-commerce Activities:

Individuals as subjects are afforded the freedom and autonomy to engage in e-commerce activities through voluntary agreements, guided by the operational principles outlined in Article 26 of Decree 52/2013/ND-CP, as amended and supplemented by Decree 85/2021/ND-CP 2021:

  • Principle of free and voluntary agreement in e-commerce transactions. The parties to e-commerce activities are free to reach agreement not contrary to the provisions of law to establish the rights and obligations of each party in the transaction.  This agreement is a ground for the settlement of disputes arising in the transaction process.
  • Principles of determination of the scope of business in e-commerce. If traders, organizations, or individuals conducting their activities of sales, service provision or commercial promotion on e-commerce websites do not specify geographical limits of these activities, these activities are regarded to be conducted on a national scale.
  • Principles of determination of the obligation to protect consumer interests in e-commerce. The owners of sales e-commerce websites and the sellers on e-commerce service provision website shall comply with the Law on Protection of Consumer Interests when providing the goods or services to customers.   The customers on e-commerce service provision websites are e-commerce service consumers and consumers of goods and services provided by the sellers on these websites. In case the sellers directly post information about their goods and services on e-commerce websites the traders or organizations providing e-commerce services and the traders or organizations providing infrastructure are not the third-party providing information as prescribed by the Law on Protection of Consumer Interests.
  • Principles of trading in goods and provision of services restricted from trading or provision or goods and services subject to business conditions through e-commerce. The subjects applying e-commerce for trading in goods and providing services restricted from trading or provision, or goods and services subject to business conditions shall comply with relevant regulations on the trading in those goods and provision of those services.
  • The subjects participating in electronic commerce activities are obligated to comply with the regulations of the law concerning information security, cybersecurity, and other relevant laws.

Prohibited Acts in E-commerce Activies:

In every business sector, the Vietnamese law establishes prohibited acts that individuals or entities must not engage in. In e-commerce activities, the following acts are prohibited:

According to Article 4 of Decree 52/2013/NĐ-CP, as amended by Decree 85/2021/NĐ-CP, the prohibited acts in electronic commerce transactions include:

  • Violations of e-commerce business activities. Organizing a marketing and business network for e-commerce services in which each participant is required to pay an initial amount of money to buy the service and receive commission, bonus, or other economic benefits from mobilizing others to join the network. Taking advantage of e-commerce to trade in counterfeit goods or trade in goods or provide services infringing upon intellectual property rights, or trade in goods or provide services in the list of goods and services banned from business.  Taking advantage of the name of e-commerce business to illegally mobilize capital from other traders, organizations, or individuals.  Providing e-commerce services or monitoring, evaluation, and certification services in e-commerce when these services have not been registered or licensed in accordance with this Decree.  Providing e-commerce services or monitoring, evaluation, and certification services in e-commerce inconsistent with the information in the dossier of registration or licensing.  Committing fraudulent acts or providing false information when carrying out the procedures for notification of the setting up of an e-commerce website, registering a website to provide e-commerce services, registering, or applying for a license to provide monitoring, evaluation, and certification services.
  • Violations of information on e-commerce websites. Falsifying registration information or failing to comply with the regulations on the form and mode of disclosing registration information on e-commerce websites. Using the logos of credit rating programs of e-commerce websites when having not been recognized by these programs. Using links, logos, or other technologies on e-commerce websites to cause confusion about the relationship with other traders, organizations, or individuals.  Using links to provide conflicting or misleading information compared with the information disclosed in the area where the website relates to this link.
  • Violations of transaction on e-commerce websites. Performing acts of deceiving consumers on e-commerce websites.  Falsifying information of traders, organizations, or individuals in order to participate in e-commerce activities. Intervening in the operation system and Internet browser in electronic equipment accessible to websites in order to force customers to stay on the websites against their will.
  • Other violations. Stealing, using, revealing, transferring, and selling information relating to business secrets of other traders, organizations or individuals or personal information of consumers in e-commerce without the consent of the parties concerned, unless otherwise provided by law.  Faking or copying the interfaces of e-commerce websites of other traders, organizations, or individuals to make profit or to cause confusion or customer distrust in those traders, organizations, or individuals.

These limitations in e-commerce activities are considered guidelines that all subjects participating in such activities must adhere to, aiming to create a safe e-commerce environment. For further in-depth understanding, please continue to check our  upcoming articles. Do not forget to stay updated with other useful information in our website.  If needed, feel free to contact us for more detailed guidance: letran@corporatecounsels.vn.