Vietnam (July 1, 2005)

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Score = 22

Governed by: Competition Law of 4 November 2004 (came into force 1 July 2005) ("Competition Law").[1]

Category Subcategory Score Comment
Scope Extraterritoriality 0 Article 2 of the Competition Law regulates unhealthy competitive practices and practices in restraint of competition by all businesses in Vietnam, including 'foreign enterprises operating in Vietnam.'
Remedies Fines 1 Article 118 allows fines of up to 10% of annual turnover for violations.
Prison Sentences 0
Divestitures 1 Under Article 117(3) unlawful mergers may be undone and structural remedies may be forced on companies abusing a dominant position.
Private Enforcement 3rd Party Initiation 1 Under Article 58, any party that believes its legal rights and interests have been infringed due to a breach of the Competition Law can submit a complaint to the Competition Commission.
Remedies Available to 3rd Parties 1 Article 117(3) provides that violators whose actions have harmed others must pay compensation.
3rd Party Rights in Proceedings[2] 1 Numerous provisions of the statute, among them articles 61, 64, 66, 67, 71, 104, and 107, afford third parties participation and evidentiary rights in proceedings.
Merger Notification Voluntary 0
Mandatory 3 Under Article 20, if the parties to a merger have a combined market share of between 30% and 50% of the relevant market, they must notify the Competition Commission before the proposed merger. Mergers between companies with larger market share are generally prohibited.
Pre-merger 2 See above.
Post-merger 0
Merger Assessment Dominance 1 Under Article 18, mergers resulting in greater than 50% market share are usually prohibited
Restriction of Competition 0
Public Interest (Pro D) 1 Under Article 19, otherwise prohibited mergers may be allowed if they contribute to exports, or if they contribute to socioeconomic progress.
Public Interest (Pro Authority) 0
Other 1 Under Article 19(1), the Competition Commission may grant a business failure exemption if one or more of the parties to the merger is at risk of being dissolved or declared bankrupt.
Efficiency 1 Under Article 19(2), the Competition Commission may grant an exemption if the merger has the effect of contributing to technical progress.
Dominance Limits Access 1 Article 13(3) prohibits a dominant party from limiting production.
Abusive Acts 1 Under Articles 14(2) and 14(3), An enterprise in a monopoly market position may not impose disadvantageous conditions on customers or abuse its monopoly position to unilaterally change or rescind a signed contract without a legitimate reason.
Price Setting 1 Articles 13(1)(low prices) and 13(2)(high prices) bans price setting.
Discriminatory Pricing 1 Article 13(4) bans discriminatory pricing.
Resale Price Maintenance 1 Article 13(2) bans RPM.
Obstacles to Entry 1 Article 13(1) bans using predatory pricing to drive competition from the market.
Efficiency Defense 0
Restrictive Trade Practices[3] Price Fixing 1 Article 8(1) bans price-fixing agreements.
Tying 1 Articles 8(5) and 13(5) ban tying by groups of enterprises and a single dominant enterprise, respectively.
Market Division 1 Article 8(2) bans market division.
Output Restraint 1 Articles 8(3) and 8(4) ban the restriction of output and technical development.
Market Sharing 0
Eliminating Competitors 1 Articles 8(6) and 8(7) ban agreements to eliminate competitors or create obstacles to entry.
Collusive Tendering/Bid-Rigging 1 Article 8(8) bans bid-rigging.
Supply Refusal 0
Efficiency Defense 1 Article 10 allows for an efficiency defense for otherwise forbidden practices.

References

  1. Available online at the Asian Development Bank's website, at http://www.adb.org/Documents/Others/OGC-Toolkits/Competition-Law/documents/VN_Order_23_2004.pdf
  2. While third parties are given many rights in proceedings, if they bring proceedings and competition violations are not discovered, under Article 63, the complainant will have to pay the case-handling charges. Under Article 62, if administrative procedures initiated by a complaint cause damage to an innocent accused party, the complainant must pay damages.
  3. Under Article 8, which governs restrictive trade practices, the regulations on price fixing, market distribution, output restraint, restricting technical development, and tying only apply to groups of enterprises with a combined market share of 30% or more. However, the bans on agreements for bid-rigging, obstacles to entry, and elimination of competition apply across the board.