Ministry wants social networks used to sell goods treated as online marketplaces

By Duc Minh   January 18, 2021 | 05:05 am PT
Ministry wants social networks used to sell goods treated as online marketplaces
A person makes online purchases with a laptop and a credit card. Photo by Shutterstock/Ivan Kruk.
Social networks that enable trading of goods should be regulated like e-commerce trading platforms, a draft decree by the Ministry of Industry and Trade proposes.

It seeks to expand the scope of online marketplace regulations to include social media that allows people to create pages to sell goods, enter into contracts with customers or post articles offering goods or services for sale.

But Nguyen Quang Dong, director of the Institute for Policy Studies and Media Development, said there is no basis to treat social networks as e-commerce platforms.

They do not have physical stores or goods, or an obligation to provide support in cases of complaints or fraud, and charge fees for advertising as opposed to sales, he pointed out.

"Viewing social networks as e-commerce trading sites would be incorrect, they are closer to advertising services. It is necessary to clarify the nature of social networks, instead of trying to have overarching regulations governing everything."

Some European countries treat social networks as digital services, a concept with wider scope than e-commerce platforms and allows them to collect taxes based on this definition, he added.

Another provision in this draft that raises concern among analysts is that only foreign investors considered by the ministry to be "reputable global technology companies in the field of e-commerce" will be allowed to enter the Vietnamese e-commerce market.

It will periodically publish a list of eligible companies, according to the draft decree.

Nguyen Thanh Ha, chairman of law firm SB Law, warned this would limit the entry of foreign capital.

"The definition of ‘reputable global tech company’ is ambiguous and subjective, and it is difficult to identify the standards of that qualify a company, and makes it difficult for businesses to interpret."

Dong too said this provision is not feasible and should be deleted.

Global data firm Statista estimated Vietnam’s e-commerce market to be worth $6 billion last year and projected it to grow to around $9 billion by 2025.

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