Reputation is a crucial factor for the existence and development of an enterprise. However, in many cases, an individual may engage in conduct that harms a company’s reputation, causing serious economic losses and damage to brand image. So how are acts by an individual who damages a company’s reputation handled under the law?

I. Overview of an individual who damages a company’s reputation

Reputation is one of the most valuable assets of an enterprise, directly affecting customer trust, business partnerships, and sustainable development. In practice, however, many enterprises face situations in which individuals intentionally or unintentionally damage their reputation and brand image.

Such individuals deliberately provide or disseminate false, fabricated, distorted, or defamatory information in order to undermine the trust of other individuals or organizations in the enterprise.

II. Legal regulations on an individual who damages a company’s reputation

1. Definition of an individual who damages a company’s reputation

An individual who damages a company’s reputation is a person who commits acts of providing or sharing false, distorted, defamatory, or insulting information that harms the reputation of an enterprise. Such acts may be performed through various means, including social media platforms, mass media, press, online forums, or dissemination within and outside the enterprise.

2. Cases in which an individual damages a company’s reputation

In practice, acts that damage a company’s reputation occur in many forms. Common acts include:

  • Providing false, fabricated, or defamatory information to undermine the reputation of an enterprise;
  • Disclosing or disseminating inaccurate or unverified information that negatively affects the enterprise;
  • Making untruthful comments or assessments regarding the quality of products or services;
  • Engaging in unfair competition by creating false rumors to erode customer trust.

3. Handling of an individual who damages a company’s reputation

Under current regulations, depending on the nature and severity of the violation, an individual who damages a company’s reputation may be subject to the following sanctions:

  • Administrative sanctions under Decree No. 15/2020/NĐ-CP. Depending on the specific act, violators may be fined from 10,000,000 VND to 40,000,000 VND.
  • Criminal liability for the offense of defamation under Article 156 of the Criminal Code 2015, as amended and supplemented in 2017, with sanctions ranging from a fine of 10,000,000 VND to 50,000,000 VND, non-custodial reform for up to two years, or imprisonment from three months to one year; and, in aggravated cases, imprisonment from three years to seven years.
  • In addition, the violator must compensate for damages caused to the enterprise in accordance with Article 592 of the Civil Code 2015.

III. Questions regarding an individual who damages a company’s reputation

1. Is it possible to claim compensation for damages when an individual damages a company’s reputation?

Article 13 of the Civil Code 2015 provides for compensation for damages as follows:

  • Individuals and legal entities whose civil rights are infringed shall be fully compensated for damages, unless otherwise agreed by the parties or otherwise provided by law.

Accordingly, when an enterprise suffers damage to its reputation and legitimate rights due to an individual’s acts, it is entitled to claim compensation in accordance with the above provision. The enterprise may request the individual who caused the damage to provide compensation through negotiation or mediation, or may initiate legal proceedings before a competent court to protect its lawful rights and interests.

2. Can an enterprise initiate court proceedings when an individual damages its reputation?

Article 186 of the Civil Procedure Code 2015 provides for the right to initiate a lawsuit as follows:

  • Agencies, organizations, and individuals have the right to initiate lawsuits, either by themselves or through their lawful representatives (hereinafter collectively referred to as plaintiffs), before competent courts to request protection of their lawful rights and interests.

Accordingly, where there are grounds to believe that an individual has damaged an enterprise’s reputation, the enterprise may initiate legal proceedings before a competent court to protect its lawful rights and interests.

3. How are acts of fabrication or defamation aimed at damaging a company’s reputation on social media sanctioned?

Pursuant to Point a Clause 1 Article 101 of Decree No. 15/2020/NĐ-CP (as amended by Clause 37 Article 1 of Decree No. 14/2022/NĐ-CP) on administrative sanctions for violations of regulations on the responsibility for using social networking services and social-network-based websites:

  • A fine ranging from 10,000,000 VND to 20,000,000 VND shall be imposed for taking advantage of social networks to commit one of the following acts: Providing or sharing fake, false, distorted, defamatory information or information that insults the reputation of agencies or organizations, or the honor and dignity of individuals.

Accordingly, individuals who take advantage of social networks to provide or share fake, false, distorted, defamatory information that damages the reputation of agencies or organizations shall be subject to administrative fines ranging from 10,000,000 VND to 20,000,000 VND.

4. What is the statute of limitations for criminal prosecution of acts of fabrication or defamation aimed at damaging a company’s reputation?

Individuals who fabricate or defame information aimed at damaging a company’s reputation may be subject to criminal prosecution under Article 156 of the Criminal Code 2015, as amended and supplemented in 2017, for the offense of defamation. The applicable sanctions include:

  • A fine of 10,000,000 VND to 50,000,000 VND, non-custodial reform for up to two years, or imprisonment from three months to one year;
  • Imprisonment from one year to three years;
  • Imprisonment from three years to seven years.

Such offenses fall within the categories of less serious crimes and serious crimes according to Clause 1 Article 9 of the Criminal Code.

Pursuant to Clause 2 Article 27 of the Criminal Code, the statute of limitations for criminal prosecution is five years for less serious crimes and ten years for serious crimes.

Accordingly, the statute of limitations for criminal prosecution of acts of fabrication or defamation aimed at damaging a company’s reputation is at least five years.

IV. Legal consulting services related to an individual who damages a company’s reputation

The above is NPLaw’s article on an individual who damages a company’s reputation under current regulations. With a team of experienced lawyers and legal professionals, NPLaw provides reputable and professional legal services, ensuring optimal protection of clients’ lawful rights and interests. Should you require legal assistance, please contact NPLaw for consultation and support.