Vietnam's insurance market growing and fiercely competitive, insurers are constantly looking for ways to affirm their position and attract customers. However, not all competitive strategies are implemented in a transparent and law-abiding manner. The case of FWD Vietnam Life Insurance Co., Ltd. (FWD Vietnam) being sanctioned by the National Competition Commission (NAC) for unfair competition is a remarkable "case study" for Vietnamese businesses to prevent risks that may arise in the course of business activities. The case of FWD Vietnam shows the importance of compliance with competition law in the context of building a fair and healthy business environment among businesses.
FWD Vietnam case sanctioned by the National Competition Commission
According to Decision No. 525/QD-CT of the National People's Committee, FWD Vietnam has been administratively sanctioned by the National People's Committee with a fine of VND 200 million for unfair competition[1]. Specifically, this company has posted confusing information on its official Facebook page, including statements such as:
- "No. 1 brand for customer experience for 4 consecutive years in the life insurance industry in Vietnam."
- "The insurance company with the least excluded category in the market."
- "100% non-cash payment and no paper records."
- "The first insurance company to distribute through e-commerce."
- "The most diverse and extensive distribution network in Vietnam."
This information, according to the assessment of the National People's Committee, is inaccurate and has no practical basis, causing confusion for customers. This act violates Article 45, Clause 5, Point a of the Competition Law 2018, which prohibits businesses from providing false information to entice illicit customers.
FWD Vietnam's behavior not only affects consumer decisions but also damages the reputation of other competitors in the market. In particular, the use of social networks – a platform with a strong spread – has amplified the scope of the impact of misinformation, making the case more serious.
Fines and remedies
In addition to the fine of VND 200 million – the lowest level in the fine bracket from VND 200 million to VND 400 million according to the Government's Decree 75/2019/ND-CP dated September 26, 2019 on sanctioning administrative violations in the field of competition, FWD Vietnam is also required to take remedial measures. Specifically, the company must publicly correct misleading information on its Facebook page to restore the truth and minimize negative impacts.
The National People's Committee has considered extenuating circumstances when applying this fine, including: (i) FWD proactively stops the violation and cooperates with the investigating agency; (ii) This is the first time that the company has violated the regulations on unfair competition; (iii) The company voluntarily declares, sincerely apologizes and actively supports the investigation process.
The decision to sanction the National People's Committee is not only to deter FWD Vietnam but also to send a strong message to other businesses about strict compliance with competition laws, especially the advertising of services and products to consumers on social media platforms.
Considering FWD Vietnam's unfair competitive behavior
Unfair competition is defined as activities that violate competition law, negatively affecting the fair business environment and the interests of consumers. In the case of FWD Vietnam, the act of providing misleading information clearly violates the provisions of Clause 5, Point a, Article 45 of the Competition Law 2018.
What is misleading information?
Misleading information is information that is inaccurate, lacks factual basis, or exaggerates the actual service/goods itself, causing customers to misunderstand the product, service, or position of the business. In this case, FWD Vietnam's claims such as "No. 1 Brand in Customer Experience" or "Least Market-Excluded Category" were not substantiated by specific data from independent organizations or credible surveys. This may lead customers to believe that FWD is superior to its competitors, when in reality it may not be true as stated by FWD Vietnam on the company's Facebook page.
Impact of this behavior
FWD Vietnam's behavior may have the following consequences:
First, this behavior has an impact on consumers
Customers can make decisions to buy insurance and use services based on false information, leading to risks when benefits are not guaranteed as advertised.
Second, this behavior harms competitors
Other insurers may unfairly lose customers due to misinformation from FWD Vietnam as this behavior may/is likely to entice a large number of customers to use FWD's services because they believe in the superiority caused by FDW Vietnam's advertisements.
Third, this behavior can undermine trust in the insurance industry
The insurance industry is inherently based on transparency and trust, this behavior can cause consumers to lose confidence in the advertising activities of businesses in particular and the entire insurance market in general because of its untrue information.
The role of social networks
FWD Vietnam's use of social media to spread misinformation shows the danger of abusing digital platforms in competitive activities. With millions of users and even billions of consumers using social media sites to decide their consumption behavior, information on social networks can spread quickly, causing a great impact before being verified or processed by the relevant authorities.
Source: FWD Vietnam Life Insurance Company Limited
Lessons for Vietnamese businesses
FWD's case brings many valuable lessons to Vietnamese businesses, not only in the insurance industry but also in all business sectors, especially in the competitive field, where businesses carry out promotion, advertising and marketing activities for businesses in a strong way. From our perspective, we list below some important points drawn from FWD Vietnam's case with the desire for businesses to pay attention and comply well to avoid unfortunate legal risks.
Compliance with competition law is a vital factor
The Competition Law 2018 was promulgated to ensure a fair business environment and protect consumer rights. Businesses need to understand and comply with these regulations in all their activities. Violating the law not only leads to sanctions but also causes long-term damage to the reputation and brand that businesses have to spend a lot of time, money and human resources to build.
Ensure accurate and transparent advertising information
In the age of digitalization, advertising information has a great influence on customer decisions. Businesses need to make sure that all claims are factually based, verified, and not exaggerated. Some notes in claiming to be "No. 1", "top" and "top 1" in a certain field, businesses need to have data from reputable sources to prove not only to customers but also to regulators when requested.
Risk management in competitive strategy
Businesses should build a legal team or consult legal experts to assess risks in competitive strategies. This helps to detect and prevent acts that may violate the law in a timely manner. At the same time, regular updates of new legal regulations, specifically competition and advertising laws, are necessary to ensure compliance and prevent risks when carrying out product and service promotion activities.
Cooperate with the authorities when violations occur
In case an enterprise violates the law, it should actively cooperate with the authorities, admit mistakes and take remedial measures. This action not only helps to mitigate the penalty but also shows the responsibility and goodwill of the business. FWD's case is a testament to the fact that the company enjoys the lowest penalty thanks to its cooperative attitude, coordination with the competent authority to minimize the impact and thoroughly remedy the company's violations.
Building a culture of healthy competition
Fair competition is not only about complying with the law but also about respecting competitors and customers. Instead of using non-transparent tricks, businesses should focus on improving the quality of products, services and customer experience. This is a sustainable path to develop and create a long-term reputation and brand for businesses. Only when businesses consider healthy competition as a culture and a characteristic of their business, then the brand and name of the business will be deeply positioned and valuable to their customers, who decide the existence of the business.
In an increasingly competitive market, maintaining a fair and transparent business environment is not only a legal responsibility but also a determining factor for the sustainable development of businesses. Businesses need to build a legal, effective and transparent competition strategy to be able to build trust with customers and contribute to the overall development of the economy. We hope that, from the FWD Vietnam case, businesses will be more aware of the importance of healthy competition to conduct business safely and sustainably.
[1] https://vcc.gov.vn/default.aspx?page=news&do=detail&category_id=e0904ba0-4694-4595-9f66-dc2df621842a&id=52ba2d1b-2233-41f5-80c2-85709aaf61ab, accessed 13/07/2025.
