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Official Gazette

Friday, September 22, 2017

Revisions to Competition Law proposed

Updated: 15:52’ - 28/04/2017
The Ministry of Industry and Trade is gathering public comments on a draft law on amendments to the 2004 Competition Law.

The draft revises the current Competition Law’s provisions on control of anti-competitive practices to make them more enforceable and suit market competition realities and international practices.

It says the control of anti-competitive practices would be based not only on the market share criterion as at present but also on the nature and impacts or possible impacts of such practices on competition restriction.

Regarding control of economic concentration, the draft empowers the National Competition Committee (NCC) to appraise economic concentration on the basis of the market structure and level of concentration in the market; possible remarkable impacts on competition restriction in the market; and positive impacts of economic concentration on the economy.

Particularly, economic concentration would be banned when it causes or is likely to cause remarkable impacts on competition restriction in the Vietnamese market.

The draft also specifies criteria for a business to determine whether economic concentration transactions are subject to notification to the NCC, including market share, value of such transactions, and total turnover in the Vietnamese market.

Particularly, businesses would be required to report to the NCC before conducting economic concentration if one of them holds a market share of at least 20 percent, or has its economic concentration transactions valued at VND 300 billion or more, or has the total turnover of at least VND 500 billion in the Vietnamese market in the fiscal year prior to the year of conducting economic concentration.

Regarding market dominance, the draft states that a business would be considered holding a dominant position in a market if it has a market share of at least 30 percent or has a significant market power. Meanwhile, a group of businesses would be regarded as taking up a dominant position in a market if they carry out joint actions aiming to cause competition restriction and if two, three or four of them have a total market share of at least 50 percent, 65 percent or 75 percent, respectively.

Under the draft, significant market power of a business would be determined based on one or more than one of such factors as market share; market structure and ratios of market shares of businesses; capacity to access and control outlets or supplying sources; financial capacity; technological capacity, physical and technical foundations and infrastructure facilities, barriers to market access or expansion; scale of distribution and consumption network; and ownership and use rights over subject matters of industrial property.

Worthy of note, the draft also introduces a leniency policy for businesses under which the NCC would consider exempting or lessening sanctions for a business if the latter meets the conditions below: It used to be or is a party to an anti-competitive agreement; it admits its violation and voluntarily reports it before the NCC issues an investigation decision; it is one of the first businesses filing requests for leniency; it does not force, or organize for, other businesses to participate in the agreement; and it has stopped or committed to stop its participation in the agreement right after filing a request for leniency, not to mention others.- (VLLF)
 

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