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Competition law and competition management authorities

In some countries such as the United States, the United Kingdom, France… competition law is a field of law that has appeared and existed for a long time. Meanwhile, in Vietnam, the National Assembly has only enacted two Acts on the competition: Competition Law No. 27/2004/QH11 (Competition Law 2004) and Competition Law No. 23/2018/QH14 (Law Competition 2018). It can show that competition law is still a new field of legal framework of Vietnam. Therefore, in this article, the author will analyze some fundamental provisions of the Competition Law 2018 and briefly introduce competition authorities in Vietnam so readers can capture and understand more the competition law of Vietnam.

1. Some Basic Regulations Regarding Competition Law

1.1. Relevant market

A relevant market means the market of those products and/or services that are regarded as interchangeable by reason of their characteristics, intended use and prices in a specific geographical area with homogeneous conditions of competition, which is considerably differentiated from neighbouring geographic areas. The relevant market includes a relevant product market and relevant geographic market. A relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by reason of the products' characteristics, their prices and their intended use. A relevant geographic market is a specific geographical area in which provided goods and services are interchangeable under homogeneous conditions of competition, and which is considerably differentiated from neighbouring geographic areas. The determination of the relevant market is very important because this is the basis for competition authorities to conclude whether a specific act is a violation of competition law.

1.2. Anti-competitive Agreements

Anti-competitive Agreements mean arrangements made by parties in any form, which cause or may cause anticompetitive effects. The Anti-competitive Agreement is a form of anti-competitive practices. The subjects of Anti-competitive Agreements are enterprises. Accordingly, the Anti-competitive Agreement takes place between enterprises that are competitors of each other. An agreement is considered the Anti-competitive Agreement when it is formed from the unification of the will of participating enterprises about the implementation of anti-competitive practices. The content of the Anti-competitive Agreement is usually the basic elements of the market relations that businesses are competing with such as price, market, technology, contract signing conditions and contract content.

Enterprises enter into the Anti-competitive Agreement to create common strength in relationships with customers or in competition with enterprises not participating in the Agreement. When the Anti-competitive Agreement is formed, enterprises that are competitors will not compete with each other. By the Anti-competitive Agreement, enterprises that enter into the Agreement may cause loss to customers by imposing adverse trading conditions on them or cause damage to other enterprises not participating in the Agreement.

According to the Competition Law 2018, Anti-competitive Agreements include: Agreements on directly or indirectly fixing goods or service prices; Agreements on distributing customers, consumption market, sources of supply of goods, provision of services; Agreements on limiting or controlling the quantity, volume of produced, purchased, sold goods or provided services; Agreements for one of more parties to the agreements to win tenders when participating in tenders for supply of goods or services; Agreements on preventing, restraining, disallowing other enterprises from entering the market or develop business; Agreements on abolishing from the market enterprises other than the parties to the agreements; Agreements on restricting technical or technological development and investments; Agreement on imposing on other enterprises conditions for signing of goods or services purchase or sale contracts or forcing other enterprises to accept obligations which have no direct connection with the subject of such contracts; Agreements on not trading with enterprises other than the parties to the agreements; Agreements on restricting consumption market, sources of supply of goods and services from enterprises other than the parties to the agreements; and Other agreements that cause or may cause anti-competitive effects.

1.3. Abuse of a dominant position and abuse of monopoly position

Abuse of a dominant position and abuse of monopoly position means behaviour of an enterprise with a dominant position, an enterprise with a monopoly position which causes or may cause anticompetitive effects. Similar to the Anti-competitive Agreement, abuse of dominant market position and abuse of monopoly position is also a form of anti-competitive practices. The subjects of abuse of the dominant market position and abuse of the monopoly position are an enterprise or a group of enterprises with the dominant position or the enterprise with the monopoly position in the relevant market.

The enterprise shall be considered to hold a dominant position on the market if it has substantial market power as specified in Article 26 of the Competition Law 2018 or has market shares of 30% or more on the relevant market. The group of enterprises shall be considered to hold a dominant position on the market if they jointly cause anticompetitive effects and have substantial market power as specified in Article 26 of the Competition Law 2018 or their total market shares fall into one of the cases specified in Clause 2, Article 24 of the Competition Law 2018. The enterprise shall be considered to hold the monopoly position if there is no enterprise competing on the goods or services dealt in by such enterprise on the relevant market. The enterprise, the group of enterprises with the dominant position on the market or the enterprise with the monopoly position is considered to be abusing the dominant position, abusing the monopoly position when it implements prohibited anti-competitive practices as prescribed in Article 27 of the Competition Law 2018.

1.4. Unfair competition practices

Unfair competition practices mean competition acts performed by enterprises against the principles of good faith, honesty, business norms and standards, which cause or may cause damage to the legitimate rights and interests of other enterprises. Accordingly, the subjects of Unfair Competition Practices are also enterprises. The enterprise is considered to have Unfair Competition Practices when it implements one or more prohibited practices as prescribed in Article 45 of the Competition Law 2018 and the implementation of such practices causes damage or may cause damage to the legitimate rights and interests of other enterprises.

2. Competition Authorities

2.1. Vietnam Competition Authority

Vietnam Competition Authority is an organization under the Ministry of Industry and Trade, which has the function of advising and assisting the Minister in performing the state management and organizing the enforcement of laws on competition, anti-dumping and anti-subsidy, applying defence measures to goods imported into Vietnam; protecting consumer rights; dealing with international trade lawsuits related to dumping, subsidies and application of defence measures in accordance with the law. Units under the Vietnam Competition Authority include: Department of Investigation of anti-competitive practices, Department of Economic Concentration Control, Department of Investigation and Handling of Unfair Competition Practices, Department of Consumer Protection, Department of contract control according to forms- general transaction conditions, Office of Vietnam Competition Authority, Information, Consulting and Training Center.

2.2. Vietnam Competition Council

Vietnam Competition Council is an independent competition proceeding authority established by the Government, with the function of organizing the handling and settling complaints about competition cases related to anti-competition practices. Vietnam Competition Council has 11 to 15 members, including the Chairman, Vice Chairman and Commissioners who are appointed, removed or discharged by the Prime Minister at the proposal of the Minister of Industry and Trade. Accordingly, Vietnam Competition Council is a very special authority. Although it is an administrative authority, Vietnam Competition Council has the function of organizing the adjudication of cases related to anti-competitive practices.
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