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Experts have raised concerns that Vietnam’s current advertising regulations are falling behind the rapidly evolving world of online selling and the increasing influence of social media personalities. To address these concerns, a draft law proposing amendments to several provisions of the Law on Advertising is set for discussion at the upcoming 8th session of the 15th National Assembly in October 2024. These proposed amendments focus on tightening control over social media marketing, a topic that has generated significant public interest.
The Growth of Vietnam’s Advertising Market
Vietnam’s advertising market has experienced significant growth, driven largely by online advertising. According to Statista, the sector generated nearly 2.3 billion USD in revenue in 2023, with online advertising contributing approximately 1.21 billion USD. Forecasts from the Vietnam Advertising Association predict that this number could rise to 3 and 4 billion USD in 2024. However, this surge in revenue has been dominated by international social networks like Meta, Google, and TikTok, which control 70% of the market.
The dominance of cross-border advertising platforms has raised concerns over false advertising, substandard products, and legal violations related to gambling, betting, and illegal loans.
Addressing Limitations in the Current Law
The Ministry of Culture, Sports, and Tourism has acknowledged the limitations of the existing Advertising Law, which has been in force for a decade. In response, the ministry is seeking feedback on a draft aimed at amending and supplementing certain provisions. The proposed changes under Article 23 and Article 23a focus on regulating online and cross-border advertising activities more effectively.
Key provisions in the draft law include requiring foreign entities involved in cross-border advertising to adhere to local regulations, notify relevant authorities, and comply with requests to remove unlawful content. The draft also aims to prevent foreign ads from appearing on illegal content platforms in Vietnam.
New Rules for Influencers and Advertising Product Carriers
The draft law introduces significant changes for influencers and businesses engaged in online advertising. It revises the definition of advertising product carriers to include entities conducting advertising activities on social networks and outlines their rights and responsibilities.
Influencers, under the new draft, will be subject to stricter regulations. They must comply with legal standards concerning the features and quality of the products they promote and sign written contracts when advertising specific categories of goods like cosmetics or food. These measures aim to enhance transparency and protect consumers from false advertising.
Additionally, the law sets out responsibilities for advertising product carriers, particularly those with significant influence on social networks, ensuring that they adhere to the legal framework and help curb the spread of misleading content.
Stricter Penalties for False Advertising by Influencers
One of the key issues the draft law seeks to address is the rise of false advertising by influencers, Key Opinion Leaders (KOLs), and Key Opinion Customers (KOCs). The current regulations contain gaps that allow some influencers to mislead consumers without facing sufficient penalties. The proposed amendments aim to fill these gaps and introduce more effective measures to hold individuals and businesses accountable for their advertising practices.
Strengthening Consumer Protection and Ensuring Fair Competition
As the Vietnamese advertising landscape continues to evolve, the proposed amendments to the Advertising Law are designed to create a fairer and more transparent regulatory framework. The Government has tasked the Ministry of Culture, Sports, and Tourism with leading the process of finalizing the law, ensuring that it includes clear requirements for online and cross-border advertising while also addressing illegal activities, tax evasion, and consumer protection.
By introducing these changes, Vietnam aims to bring its advertising regulations in line with global practices while safeguarding the rights of consumers in an increasingly digital marketplace. The upcoming discussions in the National Assembly will determine the future direction of these reforms and their potential impact on the country’s rapidly growing advertising industry.
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