Vietnam Law on Competition has been adopted and
will be effective on July 1st, 2019. The competition law of 2018 has changed in
comparison with the Law on Competition 2004. Theses changes are
fundamental which enterprises should be aware of when entering into Vietnam through M&A activities.
Competition lawyer should be consulted for update and development to avoid
non-compliance.
Competition Lawyers in Vietnam
Firstly, the Competition Law 2018 gave up
regulations on the limit of acts of economic concentration. Accordingly,
Article 30 prohibits an enterprise from conducting economic concentration that
has the potential to cause significant adverse effects on competition in the
Vietnamese market. Contrary to previous regulations, Competition Law 2004
prohibits economic concentration if the combined market share of enterprises
participating in economic concentration accounted for more than 50% in the
relevant market.
Secondly, the Competition Law 2018 under Article
112 provides clemency policy for enterprises violating competition regulations.
Accordingly, enterprises which voluntarily declare to help the National
Competition Committee detect, investigate and deal with prohibited competition
restriction acts will be exempted or reduced penalties according to the
leniency policy. The leniency policy is applicable to no more than three first
enterprises applying for leniency to the National Competition Commission.
Thirdly, unlike the Competition Law 2004, the
Competition Law 2018 specifies the maximum fine for violations of competition
law.
For organization:
– Violating regulations on the acts of economic
concentration: a maximum fine of 5% of the total turnover of the business on
the relevant market.
– Violating regulations on unfair competition: a
fine of up to VND 2 billion
– Violation of other regulations: up to 200
million VND.
For individual, the fine level is 50% of the
organization’s level.
Fourth, on threshold of economic
concentration.The Competition Law 2004 stipulated that for centrally-run
enterprises with a market share of between 30% and 50% in the relevant market,
the competition authority must notify the competition authority before
conducting the economic concentration. At present, the Competition Law 2018 is
not regulated specifically as above, but only the notification threshold of
economic concentration is determined based on one of four criteria as
following:
– Total assets on the Vietnamese market of
enterprises participating in economic concentration;
-The total turnover in the Vietnamese market of
enterprises participating in economic concentration;
– Transaction value of economic concentration;
– Market share in the relevant market of
enterprises participating in economic concentration.
Finally, new regulation on the time limit for
dealing with a breach of competition law. Previously, to solve and deal with
cases of economic concentration violation, it is necessary to undertake a
preliminary investigation and formal investigation. In particular, the
preliminary investigation is 30 days; formal investigation is 60 days with
unfair competition; 180 days with the agreement restriction competition,
economic concentration. Competition Law 2018 no longer stipulates two phases of
the above investigation, but only that the investigation period is 09 months
for restricted competition; 90 days with economic concentration; 60 days with
unfair competition cases.
