Since liberalisation in the 1990s, unfair business practices have become a complicated, and at times confusing, issue for both entrepreneurs and consumers in Mongolia. Specifically, for this article, we will look at how businesses have been able to mislead the public thanks to inconsistently enforced competition laws.

Notorious cases

One well-known example of a deceptive commercial practice is the newspaper Zasgiin Gazriin Medee (“Government News”). The name suggests a state-run media outlet. But a joint report by the Press institute of Mongolia and Reporters Without Borders points out that Zasgiin Gazriin Medee was started in 2014 and owned by the decidedly private Trade and Development Bank (TDB) ever since.

Another example involves Mongoliin Undesnii Ikh Surguuli, a large private university, and Mongol Ulsiin Ikh Surguuli, the country’s oldest public university, established in 1942. If these names look similar, that’s no accident. Even the Mongolian acronyms of both universities are nearly identical (МҮИС and МУИС). It’s also confusing in English, with the private school translating itself as “Mongolian National University” and the public school as the “National University of Mongolia”. It has been claimed that the private Mongolian National University has leveraged its similar-sounding name in the countryside in an effort to dupe less-informed secondary school applicants of its pedigree.

There are laws but…

The Mongolian Trademark Law provides for registration-based protection. The Law on Competition may, however, be applied in the case of the newspaper. Article 12.1.10 of the Law on Competition could serve here as basis for a legal action.

In the case of the two universities, the Competition Authority of Mongolia prohibited in 2013 the use of the name “The National University of Mongolia” in English by the private university. The Competition Authority stated that the name of the private university in Mongolian language was registered by State Registration Authority in breach of the relevant provisions of the Law on State Registration.

Despite the actions of the Competition Authority in October 2013, the private university still maintains it’s name in Mongolian language to this day. Moreover, the Intellectual Property Authority registered a logo of the private university as a trademark (TM Reg. No. 40-0012492) in December 2013, only two months after the Competition Authority’s cease and desist order.

Today, the Government of Mongolia and the National University of Mongolia could both still initiate legal action and public awareness campaigns against the newspaper and private university respectively based on the Law on Competition. Additionally, some provisions of the Civil Code may be helpful, as was the case in France and Germany in the early 19^th century, during which unfair and misleading commercial practices were uncharted territory for both lawyers and entrepreneurs. 

Ownership

The awkward question here is why the Government of Mongolia is not taking actions against the Zasgiin Gazriin Medee. TDB is not the government, and it shouldn’t seem to speak on its behalf. Yet the Reporters without Borders report contends that TDB “is owned by highly influental people with a lot of political affiliations”. Over 65% of TDB’s shares are owned by Globull Investment and Development SCA, a company registered in Luxembourg. In Mongolia, TDB owns Bloomberg TV and Forbes Mongolia Magazine, and the company was involved in the “mysterious” sale of Erdenet mine.

Similarly, questions arise in the case of the university names: Who owns the private university? And how is their misleading name allowed to persist?

Procedure

The Mongolian law enforcement system is complicated and costly. The law enforcement powers are shared between many government agencies. The university name dispute shows that at least three authorities were involved, and each authority issued different, even contradictory decisions. In these cases, the courts’ powers are limited, and complicated administrative complaint proceedings hinder the access to justice. For example, a trademark infringement case needs to be dealt with by administrative and civil courts separately, provided they reached the stage of a court dispute at all. At the end of the court proceeding, there is an additional complication with the enforcement of the court decisions by the General Executive Agency for Court Decisions, a government agency.

Light at the end of the tunnel?

Both cases are typical examples of the challenges of law enforcement in Mongolia. Mysterious ownership structures allow a private bank to operate a newspaper under the name of the Mongolian Government. But in cases of trademark and unfair competition infringements, a less complicated law enforcement is possible if, for example, civil courts dealt with these cases based on Civil Code and Civil Procedural Code without any interfereance from government agencies.

Unfortunately, the new intellectual property law reform proposals suggest that our “hidden owners” do not want a less-complicated and efficient system. And until they do, unsuspecting Mongolians will continue to get their “Government News” from the “National University of Mongolia”.

October 2018