Preventing Violations in E-Commerce Operations

In the first eight months of 2024, the Vietnam E-commerce and Digital Economy Agency (IDEA) under the Ministry of Industry and Trade transferred information about more than 500 websites and applications with signs of violations to the police force. The number of handled e-commerce violations rose by 2.4 times and the value of fines soared nearly 3 times from the same period in 2023.

Soaring e-commerce violations

According to the latest data from the Ministry of Industry and Trade, in the first 10 months of 2024, the market watchdog probed into 61,079 cases, detected and handled 41,725 violations. The value of fines totaled more than VND777 billion, an increase of 19% from the same period in 2023. Notably, violations regarding origin, intellectual property, food safety and agriculture, especially in the e-commerce field, grew considerably from a year earlier.

Mr. Tran Huu Linh, General Director of the Vietnam Directorate of Market Surveillance (Ministry of Industry and Trade), said that with increasingly sophisticated methods and tricks, most violators do not have warehouses or stores, only accept online orders, disperse goods in many places, and only deliver goods in small quantities, making it difficult for authorities to find their warehouses. Many only sell goods through intermediaries, post their products on websites but in fact only receive orders and then place them through other units to act as intermediaries to get a margin.

In January-October 2024, the market watchdog focused on monitoring and inspecting e-commerce and unearthed many violations nationwide. Most violators set up warehouses near border gates, used livestreams to take orders, and delivered goods to many locations across the country.

"Violated goods are mixed and transported in packages. Traders use non-owner phone numbers for buying/selling transactions and sending goods to customers through delivery and express delivery services, thus causing a lot of difficulties to authorities in uncovering them," said Linh.

Violated goods are not just common consumer goods but also counterfeit functional foods, cosmetics, medicines and electronic cigarettes traded in large quantities on e-commerce platforms, which directly pose threats to consumer health.

Regarding officially unregistered cross-border e-commerce platforms operating in Vietnam (such as Temu, Shein and 1688), the Vietnam Directorate of Market Surveillance (DMS) said that the Ministry of Industry and Trade instructed its units to collaborate with authorities to strengthen supervision, detect violations, and inspect warehouses and gathering points. They also recommended policy improvements to enhance enforcement and protect consumer rights.

Strengthened cooperation to strictly manage e-commerce

DMS General Director Linh said that there must be solutions for stricter management. It is time to regulate and treat the online environment like the offline environment, and to identify buyers and sellers.

To successfully combat counterfeit goods in the e-commerce environment, DMS and the Department of Security Industry under the Ministry of Public Security recently signed a memorandum of understanding (MoU) on cooperation in effectively implementing the project of fighting fake goods and protecting consumers on e-commerce to 2025, which was approved by the Prime Minister.

According to the MoU, the Department of Security Industry will assign a specialized unit to apply electronic stamps to authenticate, look up and trace stamp codes in circulation management to fight counterfeit goods and protect consumers.

The two agencies will coordinate in using information technology solutions to build a database system to digitally transform State administration of e-commerce in particular and goods circulation management in general. They will work with each other to build a database to improve management efficiency and the capacity to handle disputes and complaints and protect consumers on e-commerce.

Related agencies have launched many solutions to prevent and combat counterfeit goods in the past time, Linh said. However, in reality, there is no optimal solution or technical measure that brings 100% effectiveness in combating counterfeit goods. Therefore, DMS expected that the two agencies will jointly propose solutions, from policies to technical tools and means, to effectively implement this work.