COMPETITION LAW OF VIETNAM 2018 AND ISSUES INVOLVED IN ENFORCEMENT

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MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
________________
MASTER THESIS
COMPETITION LAW OF VIETNAM 2018 AND
ISSUES INVOLVED IN ENFORCEMENT
Specialization: International Trade Policy and Law
NGUYEN PHUONG TAM
Hanoi – 2020

MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY
________________
MASTER THESIS
COMPETITION LAW OF VIETNAM 2018 AND
ISSUES INVOLVED IN ENFORCEMENT
Specialization: International Trade Policy and Law
Full name: NGUYEN PHUONG TAM
Supervisor: Prof. Dr. Tang Van Nghia
Hanoi – 2020

i
DECLARATION
I hereby declare that I am the sole author of this master thesis. It is made on
basis of data collection, figure analysis, theoretical studies and under the direction,
support and supervision of Prof. Dr. Tang Van Nghia. The research contents and
findings of this research are truly honest. The data and figures collected and
analyzed in the thesis are completely listed in the List of References.
I am fully responsible for the content of this Master thesis as well as this
Declaration.
Hanoi, March 23rd
, 2020
Nguyen Phuong Tam

ii
ACKNOWLEDGEMENTS
During the progress of conducting this Master thesis, I have received the
guidance and valuable support from professors, lecturers, family and friends.
First of all, I would like to express my gratefulness and the sincere thanks to
Prof. Dr. Tang Van Nghia, Dean of Faculty of Graduate Studies of the Foreign
Trade University (FTU) who provided me much guidance, support and help so that I
can complete this Master thesis.
Second, I would like to extend a special thanks to all the respectful professors
and lecturers from WTI in the Master of International Trade Policy and Law courses
and Foreign Trade University who devoted their time, experiences and knowledge
to give me the good foundation of international trade policy and law.
Last but not least, I convey my sincere thanks to my family and friends who
provide me consecutive supports during the time of conducting thesis.
Hanoi, March 23rd
, 2020

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TABLE OF CONTENT
DECLARATION....................................................................................................... i
ACKNOWLEDGEMENTS.....................................................................................ii
TABLE OF CONTENT..........................................................................................iii
LIST OF ABBREVIATIONS.................................................................................. v
SUMMARY OF THESIS RESEARCH RESULTS............................................. vi
INTRODUCTION.................................................................................................... 1
CHAPTER 1: OVERVIEW OF COMPETITION LAW OF VIETNAM.......... 6
1.1 Fundamentals of competition and competition law.................................... 6
1.1.1 Fundamentals of Competition................................................................... 6
1.1.2 Fundamentals of Competition Law ......................................................... 10
1.2 Evolution of competition law in Vietnam................................................... 16
1.2.1 Before the promulgation of the Competition Law 2004.......................... 16
1.2.2 The promulgation of the Competition Law 2004 .................................... 21
1.2.3 The promulgation of the Competition Law 2018 .................................... 28
CHAPTER 2: ISSUES INVOLVED IN ENFORCEMENT OF
COMPETITION LAW OF VIETNAM 2018...................................................... 38
2.1 Contributions of the Competition Law 2018 ............................................. 38
2.1.1 Regulations on anti-competitive agreements .......................................... 38
2.1.2 Regulations on abuse of dominant position and monopoly position ...... 39
2.1.3 Regulations on economic concentration................................................. 40
2.1.4 Regulations on unfair competition.......................................................... 46
2.1.5 Regulations on Model of Competition Agency........................................ 47
2.2 Issues involved in enforcement of Competition Law of Vietnam 2018 ... 49
2.2.1 Content issues.......................................................................................... 49

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2.2.2 Issues on competition enforcement agency .............................................. 55
2.2.3 Concern related to enforcement to state-owned enterprises ................... 60
2.2.4 Issues on Resources and Staffing ............................................................. 63
CHAPTER 3: RECOMMENDATIONS FOR VIETNAM TO EFFECTIVELY
ENFORCE COMPETITION LAW 2018 ............................................................. 67
3.1 Recommendations on content of provisions ............................................... 67
3.2 Recommendations on Competition Authority ............................................ 70
3.3 Recommendations on enforcing competition laws to SOEs ...................... 73
3.4 Recommendations on resources and staff ................................................... 76
3.5 Other recommendations ............................................................................... 77
CONCLUSION ........................................................................................................ 80
REFERENCES ........................................................................................................ 82

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LIST OF ABBREVIATIONS
ASEAN Association of Southeast Asian Nations
MoIT Ministry of Industry and Trade
NCC National Competition Commission
OECD Organization for Economic Cooperation and Development
POE Private Owned Enterprise
SOE State Owned Enterprise
UNCTAD United Nations Conference on Trade and Development
VCA Vietnam Competition Authority
VCCA Vietnam Competition and Customer Authority
VCC Vietnam Competition Council

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SUMMARY OF THESIS RESEARCH RESULTS
The leading objective of this research is to evaluate issues involved in
enforcement of the Competition Law 2018 then to provide recommendations on
how to solve these issues and to effectively implement the new law. To achieve it,
the research analyzes the situation of Vietnam Competition Law 2004
implementation, analyzes big changes of the Law 2018 then find out issues involved
in the enforcement of this new Law. Based on data analysis and information
collected, the Competition Law 2018 implementation face the following issues:
Firstly, the new Law still exists some points that are not clear or not feasible.
Some articles having good contents at the perfect concept but are inapplicable or
hard to apply in reality. The new Decree detailing the Competition Law 2018 has
been promulgated on March 24th
, 2020 and will enter into force at middle of May,
so during this time, standards for evaluating market power, market share, etc. still
follow the old degree. Besides, some provisions of the new law such as leniency
provision will not be effective if related provisions in other laws (e.g. the Criminal
Code) are not reformed. In addition, the Competition Law 2018 separates the
economic concentration from the anti-competitive agreements. This change is
suitable with the current context that not every economic concentration transaction
is of anti-competitive nature. The competition agency will determine the risk of
leading anti-competitive of the economic concentration transaction then decide to
approve the transaction or not. It demands the very detailed and effective standard
and tool to make the correct decision. So one of recommendations suggested for the
government is double check and keep amending unsuitable points.
Secondly, the National Competition Commission (NCC) is not officially
organized yet, during this time, the Vietnam Competition Authority (VCA, and
currently VCCA – Vietnam Competition and Consumer Authority) and Vietnam
Competition Council are still in charge of competition cases. In the new Law, NCC
also belongs to the Ministry of Industry and Trade (MoIT) and members of NCC are
officials of the MoIT, relevant ministries, they handle NCC missions

vii
concurrently. This situation has limited the power, functions, neutrality and
efficiency of the agency.
Thirdly, same as before, NCC has to face a lot of difficulties in handling
competition cases related to state-owned enterprises or administrative decisions
issued by state agencies as well as performing consultancy functions. So the
government will take more time to discuss and carry out how to help NCC
effectively function.
Last but not least, Vietnam competition agency has a lack of budget and
human resources for handling competition cases. In fact, the number of competition
agency‟ members is too small compared with competition cases that they need to
handle. They also need to do other jobs assigned, so they cannot concentrate on
handling competition cases only. They also need to be trained regularly to improve
their skills and experiences. To fully fill these demands, a huge budget is needed. So
it requests the government to distribute more part of the State Budget to competition
agencies.

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INTRODUCTION
1. Rationale of the research topic
Competition Law No. 27/2004/QH11 was approved in the sixth session on
December 3rd
, 2004 and took effect from July 1st, 2005. This law regulates
competition restricting acts, unfair competition acts, order and procedures for
settling competition cases, measures to handle violations of competition legislation.
During over ten years of the implementation, the Competition Law 2004 has
revealed several shortcomings and drawbacks that need to be overcome. Some
provisions are no longer adequate with reality and direction of economic
development. New anti-competitive behaviors appeared which are not governed by
the Law. Some of them occurred outside Vietnam territory but their effects have
been on Vietnam. No legislation on competition handled this group of behaviors.
These shortcomings directly have impacts on the effectiveness and efficiency of
competition law implementation, the strictness of law and violation prevention.
Under this context, the Competition Law No. 23/2018/QH14 was enacted on
June 12th
, 2018 and took effect on July 1st
, 2019, replacing the Law on Competition
2004 with changes that address the new market situation. There have been new
subjects regulated under Vietnam Law on Competition 2018, evaluation of market
power factors in competition instead of market share factors, and changes in
organization of authority handling investigation and enforcing competition matters.
After several months implemented, the new regulation reveals some issues in
enforcement. Therefore, the research on “Competition Law of Vietnam 2018 and
issues involved in enforcement” expects to provide detailed analysis on issues
involved in enforcement and then to provide some recommendations on effectively
implementing the Competition Law 2018. Hopefully, the research will be useful
with readers who may be concerned.
2. Literature review
Researches on competition are various at different angles and perspectives.
However, the Competition Law 2018 has recently taken effect on July 1st
2019 –

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several months ago, so there has been no research on issues involved in its
enforcement that is published yet.
There exist some literatures on theoretical and practical background for
competition law and some researches on Vietnam Competition Law 2004 and
related legislation, namely as follows:
In national research, the textbook “Competition Law in Vietnam” by Le Danh
Vinh, Hoang Xuan Bac, Nguyen Ngoc Son (2006) provides theoretical and practical
background for training on competition law. The principal contents of this book
include concept on competition, roles and objectives of competition policies,
approaches on competition restriction behaviors governed in the Competition Law
2004 and competition agency implementing competition law in Vietnam;
The textbook “Competition Law” by Nghia Tang Van (2013) mentioned and
analyzed relevant markets (chapter 4); anti-competitive practices (chapter 5); unfair
competitive practices (chapter 6) and power and legal proceedings of Vietnam
Competition Authority (chapter 7).
Vietnam Competition Authority, the state management on competition also
conducted a report on “Review on Vietnam competition legislation” in 2013. The
report is divided into three chapters. The first chapter is overview of Vietnam
competition legislation – that provides basic information about the context of
issuing competition law, overview of competition legislation and law enforcement
status in recent years. Chapter two analyses issues involved in enforcement of
competition law such as general regulations, regulations on controlling anti-
competitive agreement, abuse of market dominant and monopoly position,
economic concentration, unfair competitive behaviors and model of competition
agency. The last chapter gives some recommendations on resolving these issues in
enforcement of the Competition Law 2004. The review focuses on analyzing issues
involved in enforcement of the Competition Law 2004 then provides ideas to amend
some out-of-date and infeasible regulations.
The research “Vietnam regulations on anti-competitive agreements: Some
inadequacies and recommendations for amendments” by Nguyen Khanh Phuong
(2014) examined Vietnam's legal provisions on anti-competitive agreements,

3
focusing on proving that these regulations have not been really effective in
protecting a fair competition environment and consumers‟ legitimate interests. The
paper then pointed out some inadequacies and shortcomings of these provisions, and
proposed some solutions to amend and implement these regulations.
The research “Application of law and jurisdiction of competition enforcement
agencies” by Lu Lam Uyen (2014) analyzed the inconsistence and irrationality of
determining the applicable law and jurisdiction of enforcement agencies in Vietnam
by examining distinct nature and legal field between unfair competition conducts
and antitrust violation.
In international research, the most popular textbook on competition is the
“Competition Policy, theory and practice” of Massimo Motta, Cambridge
University in 2004. The research comprises of three sections (i) Overview on
antitrust (competition policy), namely definition on competition policy, approach on
development of competition policy in United States and some European countries;
(ii) Definition on market power, impacts of enterprises with dominant position on
competition market; (iii) Economic tools to define market power. Analysis on
competition agency is integrated in the competition policy and approach on
development of competition legislation of countries.
The international organizations like OECD, UNCTAD, etc. conducted
research papers and roundtable meetings among members on competition law.
Among these papers, OECD peer reviews of Competition Law and Policy of
Vietnam that was published in 2018 has been a great assistance to Vietnam in
amending the Competition Law. The review focuses on problems related to state
owned entities, on analyzing law framework of restrictive competition and unfair
competition, on analyzing proposed new competition law and competition authority
reform, then provides recommendations on improving competition institutions.
3. Research objectives and research questions
The research objectives are raising issues involved in enforcement of
Competition Law 2018 and then providing recommendations to solve these issues
and to effectively apply the new regulation.

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Therefore, the research questions are raised as follows:
(1) What are changes of the Competition Law 2018 in comparison to the
Competition Law 2004?
(2) What are issues involved in enforcement of the new Law?
(3) How to solve the emerging issues and to effectively enforce the new Law?
4. Scope of research
Scope of space: The research will focus on competition law and its
enforcement in Vietnam. Besides, experiences of other ASEAN and OECD
countries are referred to support conclusions and give recommendations for
effectively implementing the Competition Law.
Scope of time:
- Assessment on status and shortcomings of the Competition Law 2004
implementation in Vietnam in the period of 2005-2018;
- Analysis on status of implementation and issues involved in enforcement of
the Competition Law 2018 from its enactment on June 12th
, 2018 till now.
5. Research methodology
To achieve objectives mentioned as above, to resolve questions that are raised
in the research, following methods are simultaneously used:
Desk research and empirical method
The desk research method is helpful in assessing the status of implementing
the Competition Law 2004 and the empirical method is essential for evaluating
issues involved in the new Law - Competition Law 2018.
Analysis and statistics method
The statistics method provides data supporting for statements and conclusions
in the research. The analysis method helps to assess the status of current
enforcement of the new Law. The combination of these methods will make research
more practical and persuasive to readers.

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Comparison method
The comparison method is a great help in assessing amendments of the
Competition Law 2018. The recommendations and conclusions of the research are
also learned from comparison with international experiences, the shortcomings and
backwards of the Competition Law 2004. The comparison method will enhance the
reliability of statements in the research.
6. Structure of the thesis
This Master thesis is divided into three main parts as follows:
Chapter 1: Overview of Competition Law of Vietnam
Chapter 2: Issues involved in enforcement of Competition Law of Vietnam 2018
Chapter 3: Recommendations for Vietnam to effectively enforce Competition
Law 2018

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CHAPTER 1: OVERVIEW OF COMPETITION LAW OF VIETNAM
1.1 Fundamentals of competition and competition law
1.1.1 Fundamentals of Competition
1.1.1.1 Concept of competition
Competition is considered as an economic phenomenon, appearing and
existing as an outstanding feature of market economy. It reflects the development
capacity of the market. In the Glossary of Industrial organization economics and
competition law published by the OECD, competition is defined as “A situation in a
market in which firms or sellers independently strive for the patronage of buyers in
order to achieve a particular business objective, e.g., profits, sales and/or market
share. Competition in this context is often equated with rivalry. This rivalry may
take place in terms of price, quality, service or combinations of these and other
factors which customers may value. Competition is viewed as an important process
by which firms are forced to become efficient and offer greater choice of products
and services at lower prices. It gives rise to increased consumer welfare and locative
efficiency. It includes the concept of “dynamic efficiency” by which firms engage
in innovation and foster technological change and progress”. (OECD, 1993, p.23)
In the perspective of an entity of behavior, competition is a method of solution
for conflict on potential benefits among enterprises, in which the consumers are
determinant factors. In the scope of society, competition is an ultimate method of
allocation on social sources and motivation of economy development. Competition
is classified into different types:
Based on structure of enterprises, the level of enterprises concentration in the
industry, economic sector, it is divided into perfect competition, monopoly and
imperfect competition.
Perfect competition is the situation of market in which the price and volume of
goods are defined by the supply and demand of goods. The players in the market
must accept and follow the market price. In the perfect competition market, there
are various buyers and sellers on one product. Any buyer or seller is too small in

7
comparison with scope of market and cannot impact on the market price. While
monopoly is the situation of a market in which just one enterprise sells the product
and no alternative or similar one (so called monopoly). This situation is totally
contrary with perfect competition.
Imperfect competition is the situation of the market in the combination of two
above mentioned situations of market. It includes monopolistic competition and
oligopoly. The monopolistic competition is the situation of a market in which many
sellers produce goods which are interchangeable. Each seller just controls the price
of goods produced by them. Oligopoly is the situation of a market containing some
sellers. Each seller is aware that the price of goods depends on both volume of
goods and behaviors of competitors in that sector.
Based on objectives and nature of competition manner, they are divided into
fair competition and unfair competition. Fair competition is a type of positive
competition in which the enterprises competes each other by their capacities. The
business behaviors comply with trade customs and ethnics. In contrary, the unfair
competition is specific activities of an entity for competition purposes but
unfairness. They are not always illegal but cause negative impacts to a particular
enterprise or competitors in the market.
As the above analysis, competition is the rivalry among enterprises on prices,
volume, services or combination of elements to enhance the position of enterprises
in the market. Vigorous competition between firms is the lifeblood of strong and
effective markets. It encourages firms to innovate by reducing slack, putting
forward pressure on costs and providing incentives organization of production. As
such, competition is a central driver for productivity growth in the economy, and
international competition.
1.1.1.2 Function of competition
In general, functions of competition are expressed in many aspects and depend on
the social field in which competition exists. In economics, competition serves to
regulate the market, makes the market operate in inevitable rules of competition, and at
the same time increases economic values in society. The functions of competition are
revealed primarily through the following ways (Nghia Tang Van, 2013):

8
- Competition adjusts and leads the business of goods and services of entities
to be in accordance with the demands based on customers' financial capabilities.
- Competition automatically adjusts business plans and decisions of market
participants based on economic benefits.
- Competition makes production resources such as capital, technology, labor,
etc. to be used in the most efficient and effective manner, and avoids wastage.
- Competition regulates the supply and demand of society, makes the supply-
demand relationship in the market always balanced.
- Competition enables to help consumers to choose suppliers and goods and
services that suit their demands.
- Competition regulates distribution of resources and income corresponding
to the activities and effectiveness of market participants.
- Competition operates a process of selecting and eliminating inefficient
business entities, and provides opportunities for more efficient and dynamic new
entities to enter the market.
- Finally, neutralizing concentration of economic power.
1.1.1.3 Advantages and Disadvantages of Competition
Advantages of Competition
Competition is always the motivation to develop production and business, and
also the economic development force of each country. Fair and legal competition
takes a positive effect to make the quality of goods and services better, to lower
prices of goods, and to benefit consumers. It gives them the confidence in the good
operation of a strong market and in the competitive process. Trade transactions
therefore will increase, thereby promote economic growth. Competition supports
the process of accumulating, concentrating resources, capital and other factors of
production, so makes the society eligible to carry out large-scale projects.
Competition forces enterprises to reform and operate effectively in order to survive.
The rule of elimination in the competition process creates opportunities for strong
and highly competitive business entities to enhance their competitive advantages to
develop.

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Fair competition will establish a self-adjusting mechanism leading to a relative
equilibrium of market power as well as of supply and demand in the market.
Therefore, new inventions, new achievements of science and technology will
stimulate enterprises to compete more aggressively to find opportunities to increase
profits, while bringing better value of goods and services to consumers. Therefore,
basically, there exist only enterprises that are strong or at least can maintain their
own existence.
Disadvantages of Competition
Competition is always the motivation of economic growth, but the
consequences can always occur, for example resources are overexploited (leading to
rapid depletion), environmental pollution, increasing rich - poor gap among the
social classes, etc. Intense competition will cause excessive accumulation of market
resources, which can lead to the emergence of entities that can dominate the market,
even can gain monopoly position in the market of determined goods and services.
The impact of competition is also revealed in many other ways: excessive
competition may lead enterprises to destroy others, to waste resources, and market
is manipulated by entities that have market power. Not only consumers‟ loose
caused by monopoly but also the bankruptcy of a series of weak and small
businesses lead to huge socio-economic consequences.
Competition also brings certain negative aspects in the segmentation of
enterprises. The dominant and potential enterprises will win in any competition,
while the weak and incompetent enterprises are difficult to survive. Competition can
also extend the rich–poor, strong-weak gap. Workers may be unemployed due to
continued technological innovation (which does not require much labor), or due to
bankruptcy of enterprises. This creates a dilemma in the development and
implementation of socio-economic policies of each country. In particular, the
competition relies on deceptive tactics to create competitive advantages can cause
damage to market participants, causing many negative consequences to consumers
and society.

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1.1.2 Fundamentals of Competition Law
1.1.2.1 Concept of competition law
The primary purpose of competition law is to remedy some of the situation in
which the free market system breaks down (Sandra Marco Colino, 2011). Competition
law has grown enormously, especially since the 1990s. With an increasing number of
countries that have undertaken economic reforms and embraced the market economy,
many of them have also introduced competition law to promote competition and
process in their markets. Thus, there has been increasing reliance on competition policy
and law to address market failures and distortions in the form of anti-competitive
practices, abuse of dominance. There is an increasing tendency of competition laws
introduced by the countries in the world.
In common understanding, competition law includes all regulations issued by
the state and has direct impacts on business activities and market structure. It
composes of two main groups of legal documents:
- The first one includes all documents to promote competition in the market,
namely regulations on market entry, diversification of economic components in the
market, freedom of trade. This group of regulations is very important, including
Law on Enterprises, Law on Investment, etc. and other industrial regulations,
namely Law on Telecommunication, Law on Insurance business, Law on Credit
institutions, Law on Electricity, etc.
- The second one includes legal institutions enacted to control and prevent anti-
competitive behaviors, unfair competition and overdue state interference into the law of
market. Many countries adopted a separate legal document to control this group of
activities (it is so called Competition Law, Antitrust Law, Fair Trade Law, etc.).
1.1.2.2. Characteristics of competition law
Competition law is a part of economic law, so it has a close relationship with
economic activities, business entities and its development is in accordance with the
level of economic development. Competition law is also based on the competition
regime in an economy. On the other hand, competition law always aims to ensure

11
the openness of the market, the freedom of competition, and encourages
competition among entities in the market. Therefore, competition law has the
following characteristics:
- The flexibility: Competition laws are designed to be flexible in order to
adapt to the adjustment of competitive acts of business entities that are very diverse
and complicated. Flexibility makes many behaviors (especially in anti-competition
restriction laws) under a form “prohibitable”. It means business entities can be
exempted from prohibited conduct if they provide a justifiable reason. Therefore,
when applying the law, the authorities are often very flexible, takes into account the
interests of all parties in each specific case in order to encourage competition and to
prevent illegal competition behaviors as well.
- Competition laws are closely related to the economy and must conform to
economic standards. Therefore, when applying the competition legislation to
specific cases, people basically often use the economic approach.
- Competition law has the characteristics of both public law and private law,
which implies economic-related issues of many important legal fields such as civil,
commercial, administrative, etc.
- Therefore, competition law does not have its own sanctions. When applying
this law, people have to use sanctions of some other legal fields such as civil
sanctions (applied to unfair competition acts, mainly compensation for damages,
forced termination of violations, etc.) or administrative sanctions that are mostly
monetary fines (applied to competition restriction acts, abuse of market dominant
position, economic concentration).
- Different from other legal fields, in addition to the provisions on
competition activities, the competition law also has the provisions on jurisdiction
and proceedings of litigation. Competition litigation power is prescribed to clearly
define power of individuals and organizations conducting competition legal
proceedings. Competition litigation proceedings do not only include activities
related to the handling of breaches, but also activities related to procedures of
registration, notification, or request for exemption of competition entities.

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Thus, in summary, competition law is a field of economic law including the
synthesis of legislation governing competition behaviors between competition
entities in the market and of litigation proceedings.
1.1.2.3 Content of competition law
Provisions on unfair competition acts
Unfair competition prohibition legislation is established to ensure the trade is
fair and is not negatively affected by bad competition acts and by behaviors that
violate business ethical standards. The unfairness of competition behaviors depends
on many factors of market relations and is basically adjusted according to the
general principles of civil law (private law). Law against unfair competition only
intervenes activities/violations in that there is a complaint from person with related
rights and interests. The sanctions are mostly forcing to stop the behavior and
paying compensation for damages caused.
Provisions on competition restriction acts
With the development of the economy and the growth of economic entities,
large amounts of enterprises with significant market power and even monopoly
have emerged. This leads to an objective need that the state needs to promulgate
regulations to restrict and control the manipulation of monopoly. These are the
premises for the birth of anti-competition restriction laws.
Normally, except regulations about competition litigation, anti-competition
restriction laws include three contents as following:
- Prohibitions against the “restraint of competition” comprising prohibitions
against anti-competitive agreements (Cartel)
- Prohibitions against abuse of dominance, abuse of monopoly (Unilateral
conducts)
- Control of economic concentration
Anti-competition restriction laws of all countries have the purpose of
protecting freedom of competition as well as protecting market structure and
correlation. Therefore, it bears many characteristics of administrative law. Because

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in general, level and range of competition restriction acts are more serious than
unfair competition acts, anti-competition restriction laws often have more strict
solutions, timelier and more specific measures - economic administrative sanctions.
Sanctions applied to breaches can be suspension of the acts, declaration of invalid
agreements, restructuring of firms, fines, etc. However, anti-competition restriction
laws are flexible, they will not be applied to all cases that have competition
restriction signals but are only applied to such acts that are qualitative or
quantitative about the level of violations or that have unreasonable behaviors. In
addition, there are many exceptions for competition restriction that can be exempted
for good economic reasons. Since this law protects free competition as well as
structure and correlation of market, it is necessary to consider and pay attention to
the benefits of stakeholders in the competition relationship.
Provisions on competition jurisdiction and litigation
Different from other legal fields, competition law regulates competition
litigation proceedings of organizations as well as individuals conducting and
participating in competition litigation proceedings. This content is mentioned
directly in the competition law. This is a specific kind of administrative - economic
procedure, so its content can only be consistent with provisions built in the entire
competition law.
Competition litigation includes not only the order of competition handling
procedures but also the procedures conducted for exemption as well as for
registration. According to specific regulations, measures to handle and impose
administrative sanctions on violations of competition law are concretized and more
appropriate for the competition field.
1.1.2.4 Relationship between competition law and other laws
Competition law contains the characteristics of both private law and public
law. Competition law carries principles and regulations of many legal documents
such as Civil Code, Commercial Law, Administrative Law, Criminal Code, etc.
Competition law uses the sanctions of other branches of law against entities that
violate competition regulations (Nghia Tang Van, 2013).

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Relationship between competition law and civil law
The position of competition law is most evident in relation with civil law - a
law that represents the basic foundation of private law.
Most of the provisions in the competition law are influenced in different levels
by the principles of the Civil Code. These provisions can be the principles of
contract freedom, contractual arrangements and non-contractual damages
compensation, etc. Specifically:
- Provisions on anti-competitive agreements, abuse of dominant market
position, abuse of monopoly position and economic concentration are based
primarily on the principle of contractual freedom, and are also directly affected by
the invalid contractual provisions and the accompanying sanctions.
- Provisions on unfair competition are actually the development of the
principles of respecting good ethical traditions in civil transactions and
compensation regimes (contractual or non-contractual) of damages when unfair
competition acts occur and damage the interests of other participants, or consumers.
Many provisions of the competition law are concretizing and developing the
provisions of civil law due to the specific characteristics of competition law. For
example, entities are free to engage in contracts, but some agreements are prohibited
under competition law if they meet the signals set out in competition law.
Relationship between competition law and commercial law
Competition law has a close relationship with commercial law, because
commercial law governs commercial conducts of traders, while competition law
governs the competitive aspect of these commercial conducts. The relationship
between competition law and commercial law as well as the relationship between
competition law with civil code show that competition law has a close relationship
with private law, plays roles of supporting, protecting principles and provisions of
those legal documents in competition terms.

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Relationship between competition law and administrative law
The relationship between competition law and administrative law is mainly
reflected in the provisions on the measures of impacting or regulating competition
activities of the competition authorities. Whereby, many of above provisions,
especially the provisions on handling violations of the competition law are based on
the principles, or directly on regulations of administrative law. The approach to
impact on competitive behaviors hereby, is the approach of administrative law. This
means the competent authorities, when enforcing competition law in many cases,
rely only on the principle of spiritual inequality, on the principle of state authority
with managed objects.
Under the Vietnam Competition Law, the Competition Administrative
Department can proceed investigation and treatment if there are indications of
violations in some cases without legal actions of related parties. Moreover,
sanctions applied for violations of competition laws are, essentially, administrative
sanctions. It shows that competition law has a very close relationship with
administrative law, and includes characteristics of public law as well.
In addition, the competition law itself contains administrative measures for
state agencies. It means state agencies are also affected by the competition law in
some specific cases. Under the Vietnam Competition Law 2018, the state agencies
must not conduct the following acts to hinder competition in the market (Article 8).
- Forcing, requesting, recommending enterprises, organizations or individuals
to or not to buy, sell specific products, provide services or from/to specific
enterprises, except for products and services in state-monopolized domains or in
emergency cases prescribed by law;
- Discriminating among enterprises;
- Forcing, requesting, recommending industry associations, social-
occupational organizations or enterprises to associate with one another with a view
to restrain competition on the market;

16
- Taking advantage of their positions and powers to illegally intervene the
competition.
Therefore, state agencies will also be subject to sanctions for discriminatory
conducts.
Relationship between competition law and criminal law
In competition law, mainly unfair competition prohibition regulations of some
countries stipulate criminal sanctions for violations of competition law when its
dangers for society have reached the level of crimes, such as counterfeiting (causing
serious consequences), deceiving customers, providing untrue information about
goods and services (causing great damage to customers), etc.
In Vietnam, only acts regulated by the Criminal Code are considered and
punished as crimes, other laws cannot stipulate crimes or penalties. Therefore, there
is no criminal provision as well as criminal sanctions for breaches in competition
law. However, in order to control these types of acts, the Criminal Code also has
provisions on some crimes related to violations of competition law such as:
deceiving customers, speculating, counterfeiting, etc.
1.2 Evolution of competition law in Vietnam
1.2.1 Before the promulgation of the Competition Law 2004
Before the renovation of the economic management mechanism (1987), the
Vietnam economy operated under a central planning model, in this context, all
activities of the economy were conducted according to the plan and the central
order. The legal form of business relations is not contractual but a state-mandated
plan. Therefore, there is no environment for business activities and there is no
competition between economic entities.
After 1987, implementing the renovation policy of economic management, the
state has gradually built institutions and developed a market economy in order to
release production capacity and competitiveness of entities in the economy.
Besides, the legal system is also constantly being improved to create an appropriate
legal basis for economic activities. The strong development of the economy under

17
the market mechanism requires the legal system to develop accordingly. Therefore,
regulations related to competition were issued and initially regulated certain aspects
of competition activities. In general, regulations related to competition can be
divided as follows:
Firstly, there are principal regulations:
The 1992 Constitution (amended in 2013) stipulated the most basic principles
for the operation of the economy, such as affirming the existence of a multi-
component commodity economy according to the market mechanism (Article 15);
recognition of the principle of business freedom (Article 57); the right of economic
entities in all economic sectors to be equally treated by the law (Article 22); the
state protection to legal capital and assets ownership of individuals and
organizations (Articles 22, 23 and 58); protection to the legitimate rights and
interests of consumers (Article 28).
For the first time, the basic operating principles of a market economy have
been recognized and confirmed by Vietnamese laws through constitutional
principles, especially business freedom. Recognizing business freedom means that
the law also recognizes and guarantees the right to legally and fairly compete with
business entities.
In addition, the 1992 Constitution also regulated the handling of illegal
business acts (these practices also include unfair competition acts), thereby the state
protected legitimate rights and interests of producers and consumers (Article 28).
The Civil Code 1995 laid down the basic principles of civil transactions,
which are also important legal bases for the development of anti -unfair competition
regulations. This was specially reflected in the principles: the principle of respect
for morality, good traditions (Article 4); principles of freedom, voluntary
commitment, agreement (Article 7); principle of equality (Article 8); principle of
goodwill and honesty (Article 9). Business entities were free to contract, but must
abide by the following principles: freedom to enter into a contract but not contrary
to law and social ethics; voluntariness, equality, goodwill, cooperation, honesty and
integrity (Article 395). In production and

18
business activities, if business entities cause damage to other persons, they must pay
compensations (Article 609).
The Commercial Law 1997 which directly regulated trade activities in Vietnam,
for the first time stipulated the principles of competition in trade. The law asserted:
"Traders are legally competitive in commercial activities" (Clause 1, Article 8). Next,
Clauses 1 and 2, Article 9 stipulated: "Traders are obliged to provide honest and
sufficient information about the goods and services that they provide, must ensure the
legality of the goods sold”. The Commercial Law has taken a closer, more direct
approach to regulate competition when addressing and prohibiting unfair competition
practices such as: speculation to manipulate the market; dumping to compete; vilifying
other traders; discouraging, inducing, bribing, threatening employees, or customers of
other traders; infringing on trademarks or other rights of industrial property of other
traders; raising prices, forcing prices to cause damage to producers and consumers;
deceiving customers, causing confusion to customers; selling counterfeit goods; selling
goods of inferior quality or at variance with the registered goods; deceptive advertising;
illegal promotions and other illegal competition acts, etc. (Clause 2, Article 8 and
Clause 3, Article 9).
The Criminal Code 1999 (amended in 2017) also provided criminal liability
regulations for entities conducting acts of unfair competition such as manufacturing
and trading fake goods (Articles 156, 157, 159); speculation (Article 160),
deceiving customers (Article 162); deceptive advertising (Article 168); infringing
upon industrial property rights (Article 171), if these acts caused serious
consequences or have been administratively sanctioned, or have been convicted for
such crimes but committed recidivism.
As can be seen, the legal clues regulating competition relations at different
levels have initially been built, from the constitution to legal documents on civil,
economic, commercial and administrative and even criminal major. This confirms
the consistent policy of the state in formulating competition law and competition
regime for Vietnam economy. Those are important prerequisites for the issuance of
legal documents on competition in the future.

19
Secondly, there are the regulations governing competition in some specific areas:
Before the issuance of competition law, there was no independent document
governing competition, but regulations on unfair competition and competition
restriction appeared scattered in some different legal documents regulating some
specific fields. For example:
- In the advertising field
The acts of unfair competition in the field of advertising have been governed
by many provisions in different legal documents. For example, reporting false
information, distorting or slandering in an attempt to insult the honor of others
(Clause 4, Article 10, Press Law 1990, last amended in 2016); comparison
advertisement confusing customers, advertising dishonestly, untruthfully, causing
damage to the interests of others, etc. (Articles 9 and 192, Commercial Law 1997;
Article 7, Ordinance on Protection consumer rights on April 27th
, 2000 – currently
out of date and Article 6, Decree No. 194/1994/NĐ-CP on advertising activities on
December 31st
, 1994). Although the above regulations on advertising have listed a
number of unfair competition acts in advertising, they have not identified
appropriate sanctions and legal consequences for each violation.
The Advertising Ordinance No. 39/2001/PL-UBTVQH10 dated November
16th
, 2001 (currently out of date) and Decree No. 24/2003/NĐ-CP of March 13th
,
2003 detailing the implementation of the advertising ordinance enacted to further
improve this legislation. The above-said Ordinance and Decree stipulated more
specifically the rights and obligations of advertisers and advertising service dealers
to protect their legitimate rights and the interests of consumers.
- In the field of industrial property rights protection:
The Decree No. 12/1999/NĐ-CP of the government dated March 6th
, 1994 on
sanctioning administrative violations in the field of industry had a lot of provisions
on the handling of violations during the process of establishing, exercising and
protecting industrial property rights (from Article 5 to Article 9). Among these
violations, many acts can be considered as unfair competition acts such as

20
establishing, exercising industrial property rights to dominate the market in an
illegal way, eliminating industrial property objects, restricting or reducing the scope
of protection of industrial property rights of other entities, taking advantage of or
lowering the commercial reputation of other business establishments (Clause 1,
Article 5). Although the issuance of this Decree is aimed to handle administrative
violations in the field of industrial property protection and state management, to a
certain extent, unfair competition act and its legal consequences has been mentioned
in this document.
- In the field of bidding:
Bidding is a common activity in the market economy and is also in a fierce
competition. There are many unhealthy signs through collusion, bribery and fraud,
etc. when submitting and examining bids. A number of healthy competition
regulations in this area have been initially established. Regulations on bidding in the
Commercial Law 1997, and together with the Decree No. 88/1999/NĐ-CP of the
government on September 1st
, 1999 (replaced by Law on Bidding 2005) are
important legal bases regulating bidding activities. The objective of the bidding
activity is to implement competition, fairness and transparency in the process of
contractor selection and the fight against unfair competition acts is an essential task
that has initially been cared for when developing the legal framework governing this
activity.
- In controlling prices of goods and services:
In the competitive activities of enterprises, price competition is one of the basic
means of competition and has the best effect on customers. The use of price strategy to
compete has appeared since Vietnam‟s economy changed to a market mechanism.
However, until 2005, price competition acts were only mentioned indirectly in
regulations related to price control of state, or in regulations on administrative sanctions
in some areas. Although these regulations do not directly regulate price competition,
the provision of administrative sanctions (mainly fines) for violators can be considered
as a basis initial legislation to govern unfair competition practices on prices.

21
Thirdly, the acts of unfair competition were initially regulated by law.
As mentioned above, although particular legal documents have not yet been
developed, in some civil, commercial, administrative and even criminal documents,
some regulations regulating competition or directly related to competition have been
amended in order to ensure a healthy business environment, to protect the interests
of the state, of business entities and of consumers. These regulations have a certain
enforcement effect, initially regulating competitive business activities, especially
the provisions of Administrative Law and Criminal Code in handling acts of
counterfeiting, trading in fake goods, infringing upon industrial property rights,
making counterfeit goods, advertising frauds, etc. Many cases of counterfeiting
have been handled by administrative law and criminal law, many administrative
fines have been imposed on businesses that advertised untruthfully, disrupted the
business activities of other enterprises, etc. Therefore, acts of unfair competition
have been initially regulated and handled by law.
Thus, before the Competition Law 2004, the transformation of the economy to
market mechanism changed the viewpoint and awareness of Vietnam about
economic competition as well as the need of regulating competition activities by
law. The state has also taken the first steps in controlling competition acts by the
law in some business fields.
1.2.2 The promulgation of the Competition Law 2004
The strong development of the economy under the market mechanism requires
the legal system to develop accordingly. Under this context, Competition Law No.
27/2004/QH11 (Competition Law 2004) was passed by the 11th
National Assembly
on December 3rd
, 2004 at its 6th
Session and came into effect from July 1st
, 2005.
The birth of the Competition Law 2004 is an important milestone in the process of
creating a consistent legal framework regulating competition activities of
enterprises in the market.
After the Competition Law 2004 was passed, the government also issued a
number of documents guiding its implementation as follows:

22
- Decree No. 110/2005/NĐ-CP on August 24th
, 2005, on management of
multi-level sale of goods (Decree 110);
- Decree No. 116/2005/NĐ-CP on August 24th
, 2005, on detailing the
implementation of a number of articles of the Competition Law (Decree 116);
- Decree No. 120/2005/NĐ-CP on September 30th
, 2005, on dealing with
breaches in the competition sector (Decree 120);
- Decree No. 05/2006/NĐ-CP dated on January 9th
, 2006 on establishment,
functions, duties, powers and organizational structure of Vietnam Competition
Council;
- Decree No. 06/2006/NĐ-CP dated January 9th
, 2006 on functions, duties,
powers and organizational structure of Vietnam Competition Administration
department;
From basic principles in Constitution, Civil Code, Commercial Law, Criminal
Code and some provisions on unfair competition and competition restriction in
some specific laws, regulations that regulated almost competition activities were
detailed in the Competition Law and guiding documents. Overview of the Law and
decrees guiding competition law enforcement can be summarized as follows:
Scope of regulations
The Competition Law prescribed acts of restraint of competition, acts of unfair
competition, the order and procedures for settling competition cases, and measures
for handling violations of competition law.
Objects of application
The Competition Law was applied to business organizations, individuals and
professional associations operating in Vietnam. Thus, the Competition Law did not
exclude any specific type of enterprise, but limited the scope of activities only
within Vietnam territory.
Anti-competitive agreement
Regarding to anti-competitive agreement acts, Article 8 of the Competition
Law stipulated 8 kinds of acts, including: (1) agreement to directly or indirectly fix

23
prices of goods and services; (2) dividing consumer markets, supply of goods and
services; (3) restricting or controlling the quantity and volume of production,
purchase and sale of goods and services; (4) limiting technical and technological
development, limiting investment; (5) imposing conditions for signing contracts of
purchase and sale of goods or services on other enterprises or forcing them to accept
obligations not directly related to the subjects of the contract; (6) preventing,
restraining, not allowing other enterprises to enter the market or to develop their
businesses; (7) removing from the market enterprises that are not parties of the
agreement; (8) colluding in order that one or some of the parties of the agreement
will win tenders for the supply of goods or services. Based on the provisions of the
Competition Law (Article 8) and Decree 116 (Articles 14 to 21), listed anti-
competitive agreement acts were clarified with detailed descriptions of the content
and form of this kind of deal.
Regarding to prohibition regulation, the Competition Law absolutely
prohibited (with no exemptions) from preventing, restraining other enterprises from
entering the market or to develop their businesses; from removing enterprises that
are not parties of the agreement and from colluding for tenders. The remaining anti-
competitive agreements are only prohibited when the parties of the agreement have
a combined market share of 30% or more. At the same time, these anti-competitive
agreements are exempted for a limited period of time if they act to lower costs and
to benefit consumers, such as rationalizing the organizational structure, business
model, improving business efficiency, promoting technical and technological
advances, improving the quality of goods and services, promoting consistently
application of quality standards and technical norms of the product category,
unifying business, delivery and payment conditions, enhancing the competitiveness
of small and medium-sized enterprises, and of Vietnamese enterprises in the
international market.
Abuse of market dominance and monopoly position
The Competition Law distinguishes enterprises with dominant position and
enterprises with monopoly position in the market, whereby:

24
- An enterprise is considered to have a dominant market position if it has a
market share of 30% or more in the relevant market or is likely to cause significant
competition restriction. A group of enterprises is considered to have a dominant
position in the market if they act together to restrict competition and fall into one of
the following cases: two enterprises with a total market share of 50% or more in the
relevant market; three enterprises with a total market share of 65% or more in the
relevant market; four enterprises with a total market share of 75% or more in the
relevant market.
- An enterprise is considered to have a monopoly position if there is no other
enterprise competing on goods and services that it trades in the relevant market.
Article 13 of the Vietnam Competition Law lists 06 acts of "abusing dominant
position" and Article 14 regulates two additional acts (in addition to 06 acts
prescribed in Article 13) "abusing monopoly position”. Based on these regulations,
Decree No. 116/2005/NĐ-CP details the acts of "abusing dominant position" and
"abusing monopoly position", thereby describing concretely the manifestations of
each act considered “abusive”.
Regarding to prohibition regulations, the Competition Law prohibits all acts of
abusing dominant market position and abusing monopoly position without
considering exemption.
Economic concentration
Economic concentration is an act of an enterprise that includes: (i) merger of
an enterprise; (ii) business consolidation; (iii) business acquisition; (iv) joint venture
between businesses; and (v) other economic concentration acts as required by law.
Prohibited cases of economic concentration: Prohibiting economic
concentration acts if the combined market share of enterprises participating in
economic concentration accounts for more than 50% of the relevant market, except
cases of exemption or case of enterprises that is still small or medium enterprises
(evaluated by the law) after economic concentration.

25
Prohibited economic concentration acts will be exempted if one or more parties of
the economic concentration have risk of dissolution or falling into bankruptcy; or if
economic concentration encourages to expand exports or to contribute to socio-
economic development, technical and technological improvement.
Regarding to notification of economic concentration, if combined market share
of enterprise participating in an economic concentration is from 30% to 50% in the
relevant market, their legal representatives must notify the competition authority
before conducting economic concentration; in case the combined market share is
lower than 30% in the relevant market or the case after conducting economic
concentration, the enterprise is still small or medium-sized enterprises (as
prescribed by law), notification is not required.
Unfair competition
In the majority of countries, unfair competition practices are governed by trade
laws or laws on protection of consumers‟ rights. However, Vietnam Competition
Law on 2004 (Article 39) has included provision regulating unfair competition acts
such as: misleading indications, infringing business secrets, coercing business,
defaming another enterprise, disrupting business activities of other enterprises,
advertising for unfair competition, unfairly promoting, discriminating between
associations and illicitly selling in multi-level, etc.
Competition authority
In 2004, Vietnam adopted a comprehensive competition law and established
two competition authorities – the Vietnam Competition Administrative Department
(VCAD) which was renamed the Vietnamese Competition Authority (VCA, which
has been structured since August 2017 to be the Vietnam Competition and
Consumer Authority – VCCA) and the Vietnamese Competition Council (VCC).
Vietnam Competition and Consumer Authority (VCCA)
The VCCA is the competition administration department under the MoIT,
having duties and powers to control the economic concentration process, to receive
applications for exemption, to propose the Trade Minister to decide or to submit to

26
Prime Minister for decision, to investigate competition cases relating to competition
restriction acts and unfair competition acts, to handle and to sanction the said
violations (Article 49). The head of the Competition Authority is appointed and
dismissed by the Prime Minister at the proposal of the Trade Minister. (Ministry of
Trade, together with Ministry of Industry, was merged on July, 2007 to be Ministry
of Industry and Trade as today).
Competition Council
Competition Council is established by the government, with eleven to fifteen
members appointed and dismissed by the Prime Minister at the proposal of the
Trade Minister. The Competition Council has duties to organize the handling and
settling complaints relating to competition restriction cases.
The Competition Council president is appointed and dismissed by the Prime
Minister among the members of the Competition Council at the proposal of the
Trade Minister. When settling a specific competition case, the Competition Council
president shall set up an according handling council, which consists of at least five
members, including the Chairman. Based on the case file transferred by the
Competition Authority, the competition handling council will hold a hearing and
make decision on voting mechanism.
Competition litigation process
Competition litigation process is an activity of agencies, organizations and
individuals according to the order and procedures for settling and handling
competition cases detailed in the Competition Law and its subordinate documents.
The litigation process is divided into three main stages:
- Investigation of competition cases
The investigation phase may be conducted based on the complaint file which
has been gathered or initiated by the VCA. Investigation of a competition case is
conducted in two steps, including preliminary investigation and formal
investigation. After finishing the investigation, the competition authority is
responsible for completing the investigation report and case file to prepare for the
next phase of handling the case.

27
- Handling competition cases
Based on the investigation report and the documents, evidence gathered in the
cases file, based on related provisions, the competent authority is responsible for
researching, evaluating and making decision to handle competition cases. In unfair
competition cases, the power to handle cases belongs to the Head of the
Competition Authority; in competition restriction cases, the Competition Council
(in particular, the council handling the case) has this competence.
- Claims, lawsuits against decisions on settlement of a competition case
In case the parties do not agree with all or a part of the contents of the decision
on settlement of competition case, they have the right to appeal to the Competition
Council (for competition restriction cases) or to the Minister of Industry and Trade
(for unfair competition cases)
Within 30 days after receiving the complaint dossier, the Competition Council
or the Minister of Industry and Trade shall settle the complaint according to
competence; In specially complicated cases, the settling time limit may be
extended, but no longer than 30 days.
In case the parties still disagree with the decision of resolving the complaint,
they may initiate administrative lawsuits against a part of or the whole complaint
settlement decision to the competent provincial People's Court.
In fact, after more than 10 years of implementation, the Competition Law
2004 reveals some key problems as follows:
- The substantive provisions of the law are flawed in that none of the
prohibitions are based on the conventional best practice standards concerning
mergers, abuse of dominance or anti-competitive agreements;
- Most „hard core‟ cartels are subject to inappropriate and difficult to
establish market share requirements;
- The provisions of the Competition Law 2004 are not consistent with
provisions relating to competition in specific laws;

28
- The VCC (currently VCCA) is hampered in its ability to detect and
investigate matters because it cannot offer immunity or leniency and its dawn raid
powers can only be used after the accused has already been informed of the
investigation;
- The level of resourcing for investigations within the VCCA is exceedingly
low (i.e. 11 front line investigators who tend to be lost to the agency once their level
of experience becomes marketable to private sector law firms);
- The VCCA‟s resources are, to a significant extent, diverted to the
enforcement of unfair competition laws that should primarily be commercial
disputes between businesses;
- Decree 116 binds the VCCA hands so tightly that many cases that are
harmful to competition cannot be appropriately investigated and in other cases
investigators must undertake challenging tasks that are a distraction from the central
harm at issue;
- It is not apparent that private parties can necessarily use Article 584 of the
Civil Code (that stipulates grounds giving rise to liability to compensate for loss and
damage) in the way its equivalent in other civil law countries can be used for the
private enforcement of competition law and the ancillary provisions such as a right
to discovery appear to be lacking. (OECD, 2018, p.67)
1.2.3 The promulgation of the Competition Law 2018
Therefore, to overcome the shortcomings of the Competition Law 2004, to
improve the effectiveness and efficiency of competition policies and laws, to meet
the requirements of economic integration and to be consistent with Vietnam's
international commitments; in order to improve the competition law in accordance
with the newly amended, supplemented or newly promulgated relevant laws; in
response to meet the government's reform of administrative procedures, a revision
of the Competition Law 2004 was needed.
On June 12th
, 2018, at the 5th
Session, the 14th
National Assembly passed the
Competition Law No. 23/2018/QH14, effective from July 1st
, 2019. The Competition
Law 2018 includes 10 chapters with 118 articles, specifically as follows:

29
- Chapter I: General provisions, including 8 articles (from Article 1 to Article
8), provide scope of regulation, object of application, explain the words and how to
apply competition law, stipulate rights and principles of business competition,
provide state policies on competition, state management responsibilities on
competition and prohibited acts related to competition.
- Chapter II: Relevant markets and market share, including 2 articles (Articles
9 and 10), define relevant markets, market share and combined market share.
- Chapter III: Anti-competitive agreements, including 13 articles (from Article
11 to Article 23), regulate anti-competitive agreements; prohibited competition
restriction agreements; assess the impact or the ability to cause significant anti-
competitive effects of the anti-competitive agreement; provide exemption for some
kinds of prohibited anti-competitive agreements; submit exemption application
dossier for prohibited competition restriction agreement; accept exemption
application dossiers for prohibited competition restriction agreements; request to
supplement information, documents to request exemption for prohibited
competition restriction agreement; consult in the process of reviewing applications
for exemption for prohibited competition restriction agreements; withdraw the
application for exemption for prohibited competition restriction agreements; provide
competence and time limit for making decisions on exemption; make decisions on
exemption for prohibited competition restriction agreements; implement anti-
competitive agreements for cases of exemption; annul the decision on exemption for
prohibited anti-competitive agreements.
- Chapter IV: Abuse of market dominant position, abuse of monopoly
position, including 5 articles (from Article 24 to Article 28), regulate enterprises,
groups of enterprises having dominant market position and enterprises having
monopoly positions; identify significant market power, prohibited acts for abuse of
dominant market position, abuse of monopoly position; control enterprises
operating in state monopolies.
- Chapter V: Economic concentration, including 16 articles (from Article 29 to
Article 44), provide forms of economic concentration, prohibited economic
concentration acts; assess the impact or the ability to have significant anti-

30
competitive effects of economic concentration acts; assess the positive effects of
economic concentration; regulate economic concentration notice, economic
concentration notification dossier, receiving dossiers of notices of economic
concentration, preliminary assessment and official assessment of economic
concentration; require additional information on economic concentration,
consultations in the process of appraising economic concentration; provide
responsibility of related agencies, organizations and individuals for providing
information and documents; stipulate how to make decisions on economic
concentration, to determine conditional economic concentration, to implement
economic concentration regulations; and list acts of violating regulations on
economic concentration.
- Chapter VI: Unfair competition acts, with one article (Article 45), regulates
prohibited unfair competition acts.
- Chapter VII: The National Competition Commission, consisting 8 articles
(from Article 46 to Article 53), provide provisions about the National Competition
Commission; President of National Competition Commission; members of National
Competition Commission; qualifications of members of the National Competition
Commission; Competition Investigation Agency; Head of Competition
Investigation Agency; investigators of competition cases and their qualifications.
- Chapter VIII: Competition legal proceedings, this chapter has 7 sections, 56
articles, including:
Section 1: General provisions, including 4 articles (from Article 54 to Article
57), provide rules of competition legal proceedings; the language and script used in
competition legal proceedings; evidence; responsibility for collaborating with and
supporting the National Competition Commission.
Section 2: Competition presiding agencies and competition presiding officers,
including 8 articles (from Article 58 to Article 65), provide regulations on
competition presiding agencies, competition presiding officers; duties and powers of
the President of the National Competition Commission; duties and powers of anti-
competitive settlement council and its chairperson and members, of the Head of

31
Competition Investigation Agency, of investigators when conducting competition
legal proceedings; duties and powers of hearing clerks and replacement of
competition presiding officers.
Section 3: Participants in competition legal proceedings, including 9 articles
(from Article 66 to Article 74), provide regulations on participants of competition
legal proceedings; rights and obligations of complainants, respondents and
investigated parties; protectors of legitimate rights and interests of the complainant,
respondent, investigated party, persons with related interests and obligations;
witnesses; expert witnesses; interpreters; persons with relevant rights and
obligations; provide provisions on refusing expertise, interpretation or requesting
replacement of expert witnesses or interpreters and on deciding replacement of
expert witnesses or interpreters.
Section 4: Procedures for investigation and settlement of competition cases,
including 21 articles (from Article 75 to Article 95), stipulate provisions on
providing information about violations; receipt, verification and evaluation of these
information; complaints against competition cases; receipt and verification of
complaint dossiers; return of complaint dossiers; competition investigation
decisions; competition investigation time limit; application of measures to prevent
and guarantee imposition of sanctions against administrative violations in
investigation and settlement of competition cases; provisions on taking testimonies,
summoning witnesses during investigation, transferring competition dossiers
showing criminal signs, suspending, re-establishing, reporting investigations;
regulate settlement of economic concentration violations; settlement of an unfair
competition case, of an anti-competitive case; suspension of competition case
settlement; hearings; settlement decision and effect of settlement decision.
Section 5: Handling of complaints against settlement decisions, including 8
articles (from Article 96 to Article 103), provide provisions on complaints against
settlement decisions; complaint letter against settlement decisions; process of
complaints against settlement decisions; consequences of complaints against

32
settlement decisions; handling of complaints against settlement decisions; decisions
of complaints against settlement decisions; validity of complaint handling decisions;
initiation of a lawsuit against complaint handling decisions.
Section 6: Announcement of decisions of the National Competition
Commission, including 4 articles (from Article 104 to Article 107), stipulate
decisions to be announced; contents not to be disclosed; posting of contents to be
announced; announcement and publication of annual performance reports of the
National Competition Commission.
Section 7: International cooperation in the competition legal proceedings,
including 2 articles (Article 108 and Article 109), provide regulations on
international cooperation and principles of international cooperation in competition
legal proceedings.
- Chapter IX. Sanctions against violations of competition law, including 6
articles (from Article 110 to Article 115), provide regulations on rules and forms of
sanctions against violations and remedial measures for violations of competition
law; fines imposed on violations of competition law; leniency policy; power and
forms of sanctions against violations of competition law; enforcement of settlement
decisions and of complaint handling decisions.
- Chapter X. Implementing provisions, including 3 articles (from Article 116
to Article 118), stipulate amendment and annulment of provisions of other laws;
entry in force of the competition law and transitional regulations.
On March 24th
, 2020, the according subordinate legal document – the Decree
No. 35/2020/NĐ-CP (Decree 35) is promulgated and will entry into force on May
15th
, 2020. The Decree includes 7 chapters with 30 articles, clarifying some
provisions on relevant market and market share; significant competition restraining
impact of anti-competitive agreements; significant market power; economic
concentration and competition legal proceedings.
In comparison to the Competition Law 2004, there are some key changes in
the Competition Law 2018 as follows:

33
(1) Broader scope of application
The Competition Law 2018 now governs many activities whether by domestic
or foreign entity, enterprises, business associations, organizations or individuals
which have or may have the “competition restraining impact” to the Vietnam
market. Competition restraining impact means all impacts which exclude, reduce,
distort or hinder competition in the market. The law provides for the addition of
"relevant domestic and foreign agencies, organizations and individuals" to the
objects of application to cover all subjects that may commit violations of
competition law. Under the Competition Law 2018, the competition authority of
Vietnam now has clear authority to deal with offshore activities and transactions
which has impact on the Vietnam market.
(2) Modifying and supplementing prohibited acts towards state agencies
On the basis of provisions of the Competition Law 2004, the new law
continues to stipulate, amend and supplement prohibited acts that hinder
competition in the market. Under the new Competition Law, a state agency is
prohibited not only from forcing but also from “requesting or recommending”
enterprises or individuals or organizations to do or not to produce and sell specific
goods, provide and use specific service, or to produce and sell goods to, provide and
use services of specific enterprises.
(3) Completing regulations on controlling anti-competitive agreements
With the new Competition Law 2018, regulations on controlling anti-
competitive agreements are amended and supplemented to complete in the direction
of expanding and changing the way of prohibitions for anti-competitive agreements.
The new Law has provided new types of prohibited anti-competitive agreements,
including agreements to share customers, agreements to not have transactions with
enterprises not being parties to the agreement, agreements to limit the product
consumer market, source of goods and service of enterprises not being parties to the
agreement, and “other agreements” which have or may have significant competition
restraining impact (Article 11). Under the old Competition Law, agreements in
restraint of competition are usually prohibited if the combined market share of

34
parties to the agreement is 30% or more. However, under the new Competition Law
2018, when determining whether an agreement should be prohibited or not, the
competition authority will apply several criteria on assessment of whether such
agreement has or may have significant competition restraining impact to the market.
Such criteria include (1) market shares, (2) market entry barrier, and (3) access to
critical infrastructure facility. The agreements in restraint of competition could be a
horizontal agreement between parties in the same industry or vertical agreement
between parties in different industries but in the same supply chain.
(4) Providing leniency policy
For the first time, the new Competition Law 2018 introduces a leniency policy.
In particular, enterprises entering into agreement in restraint of competition may
have its penalty reduced or exempted if such enterprises voluntarily report its
violation to the competition authority before an investigation decision is issued.
This leniency policy is unavailable for enterprise forcing or organizing for other
enterprises to participate in the agreement. This policy applies to first three
successful applicants. The first applicant can receive an exemption of up to 100% of
penalty. The second and the third applicants can receive a reduction of 60% and
40% of penalty respectively.
(5) Completing criteria to determine dominant market position
Under the Competition Law 2018, five enterprises with total market share of
85% or more in the relevant market are also considered as a group of enterprises
with dominant market position. However, enterprises with market share of less than
10% in the relevant market are not counted in the group of enterprises with
dominant market position.
In addition to market share, the Competition Law 2018 adds criteria of
“significant market power” to determine whether an enterprise or a group of
enterprises may have dominant market position. Under Article 26 of the new law,
significant market power of an enterprise or a group of enterprises can be assessed
based on (i) market share between enterprises in the relevant market, (ii) financial

35
strength and size of enterprise, (iii) barriers to entry and expansion of the market for
other enterprises; (iv) possibility of holding, accessing and controlling the market
for distribution and sale of goods or services or the supply of goods and services;
(v) technological advantages, technical infrastructure; (vi) ownership, holding,
access to infrastructure; (vii) the right to own or use intellectual property right
objects; (viii) the ability to move to supply or demand for other goods and services;
and (ix) particular factors in the branch or domain in which the enterprise is
operating. These elements are clarified in Article 12, Decree No. 35/2020/NĐ-CP
that details some provisions of competition law.
The new Competition Law prohibits activities of abusing dominant market
position regardless of actual consequence happening or not. That means activities
which may cause damage to customers, may eliminate competitors, or may hinder
other enterprises from participating in or may expand the market are also prohibited.
(6) Merger control
Previously, an economic concentration transaction (e.g., a merger,
consolidation or buy-out) is only prohibited if the combined market share of
enterprises in economic concentration is more than 50% of the relevant market.
However, under the Competition Law 2018, this condition is replaced by factors as
to whether an economic concentration has or may have significant competition
restraining impact. The new Law provides several criteria to determine significant
competition restraining impact of economic concentration (Article 31), including
(1) combined market share in the relevant market; (2) the level of concentration in
the relevant market before and after the economic concentration; (3) the relationship
of enterprises participating in economic concentration in the chain of production,
distribution and supply of a certain kind of goods or services or lines of business of
enterprises in economic concentration being inputs or complementary to one
another; (4) competitive advantage due to economic concentration in the relevant
market; (5) the possibility of enterprises after the economic concentration to
increase price or the rate of profit on

36
turnover significantly; (6) ability of enterprises after economic concentration to
remove or prevent other enterprises from joining or expanding the market; and
(7) particular factors in the branches and domains where enterprises participate in
economic concentration.
Similarly, under the Competition Law 2004, an economic concentration
transaction needs to be reported to the competition authority, if the combined
market share of enterprises in economic concentration is 30% or more of the
relevant market. However, under Article 33 of the new Competition Law, parties
planning to carry out the economic concentration must inform NCC if they are
subject to notification thresholds which are based on (1) total assets and total
turnover of such enterprise in Vietnamese market, (2) transaction value, or (3)
combined market share in relevant market. These criteria are detailed in Article 13
of the subordinate document – Decree 35/2020/NĐ-CP.
The Competition Law 2018 introduces a two-phase review process for
economic concentration case including preliminary review and official review. This
regulation replaces the single-phase review process under the old Competition Law.
After the two-phase review process, instead of outright rejection, the competition
authority may now decide to allow a transaction to go forward with certain
conditions attached (e.g., dividing or selling part of capital or assets of enterprises
participating in economic concentration; or controlling contents related to purchase
prices, sale prices of goods or services or other transaction conditions in contracts
made by enterprises formed after economic concentration).
Monetary penalty for violation of regulations relating to economic
concentration is also reduced from 10% to 5% of total turnover of the violating
enterprise in the relevant market in the preceding fiscal year.
(7) Completing regulations on controlling unfair competition acts
In order to eliminate overlapping, conflicts regulations between competition
law and specialized laws, to ensure consistency in the legal system and in
accordance with commitments in international institutions to which Vietnam is a
member, Article 4, the Competition Law 2018 mentions: If there is any discrepancy

37
between this law and other laws in terms of anti-competitive practices, economic
concentration, unfair competition practices and handling of unfair competition
practices, the latter shall prevail.
(8) Competition Authority
The new Law reorganizes the competition authority to enhance enforcement
effectiveness towards strengthening the position and independence of the
competition authority to conduct smoothly the proceedings from discovery,
investigation to handling of violations of competition law and settlement of
complaints about decisions on handling of competition cases.
(9) Completing regulations on competition legal proceedings
The steps in the process of handling competition cases are clearly delineated in
the Competition Law 2018, from discovery, investigation to handling and
settlement, associated with the specific responsibilities of legal proceeding agencies
and competition presiding officers, ensuring that the competition legal activities are
clear and transparent.
The impact of these changes will be analyzed in the next section of this
research - chapter 2.

38
CHAPTER 2: ISSUES INVOLVED IN ENFORCEMENT OF
COMPETITION LAW OF VIETNAM 2018
2.1 Contributions of the Competition Law 2018
The Competition Law 2018 was issued as a result in a process of reviewing,
researching, summarizing the over 12 year implementation process of the
Competition Law 2004 and consulting the opinions of many stakeholders.
Therefore, the new Law has made remarkable innovations and improvements in line
with the actual development of the economy.
2.1.1 Regulations on anti-competitive agreements
The Competition Law 2004 did not specifically stipulate agreements on
restricting competition. The regulations only refer to the form of external
appearance rigidly, but have not approached the anti-competitive nature of the acts.
For example, an agreement sets a price floor, a price ceiling; agreements to increase
prices or reduce prices (not only at specific levels) or agreements to maintain resale
prices to third parties, etc. are agreements having restrictive competition nature, but
have not been specified. While business behaviors, business strategies of
enterprises, including anti-competitive agreements become more and more complex
in many ways, approaching such a "hard and strict" rule will cause difficulties for
enforcement agencies during the investigations and handling of specific cases. In
fact, some anti-competition agreement cases that have been handled and settled by
the competition authority show that the associations are organizations behind these
agreements, play a role of getting up, motivating business entities to join in
agreements and monitoring the implementation of agreements between them. In
many cases, the associations even issue "decisions", "resolutions" on prices,
production, etc. in the market for enterprise members to implement. However, these
acts of the association have not been regulated in the current regulations.
The Law 2018 has completed the regulations on controlling the anti-
competitive agreement and added the provisions on leniency policy to enhance the
implementation efficiency. Regulations on controlling anti-competitive agreements
are amended and supplemented to complete in the direction of expanding and

39
changing the way to regulate prohibited anti-competitive agreements. The new Law
stipulates criteria to assess the impact or the ability to cause significant anti-
competitive effects as a basis for prohibiting competition restriction agreements in
the direction of clearly distinguishing the “per se” prohibitions (by default) on
group of serious anti-competitive agreements and prohibitions based on principles
of impact assessments on group of other anti-competitive agreements including
vertical agreements (Article 12, the Competition Law 2018).
The NCC whereby assesses the impact or the ability to cause significantly
competition restriction effects of anti-competition agreements based on some
factors such as (Article 13, the Competition Law 2018): (a) Market share of the
enterprises engaging in the agreement; (b) Barriers to market entry and expansion;
(c) Limitations to technological research, development, renovation or technological
capacity limitation; (d) Reduction in accessibility or ownership to essential
infrastructure; (đ) Increase of customers‟ costs and time for buying goods and
services of the enterprises engaging in the agreement or customers‟ switching to
other related products; (e) Obstruction of competition in the market through control
of other specific factors in the sectors and domains related to the parties engaging in
the agreement. These factors are clarified in Clause 2, Article 11 of the Decree 35.
Based on these criteria, the competition authority can clearly and accurately
assess substantial anti-competitive effects caused or potentially caused by anti-
competitive agreements, thereby introducing appropriate sanctions.
2.1.2 Regulations on abuse of dominant position and monopoly position
As in Article 24 of the Competition Law 2018, an enterprise with a dominant
market position is an enterprise having a significant market power determined under
Article 26 of this Law or having a market share of 30% or more in the related
market. So, in comparison to the Competition Law 2004, beside market share, the
new Law has added criteria “significant market power” to define dominant market
position of an enterprise. Significant market power is determined based on market
share; financial strength and size of the enterprise; barriers to entry to market and to
expand business of other enterprises; ability to obtain, assess, control the goods

40
distribution/consumption market or sources of supply; advantages in technology and
technical infrastructure; right to own, obtain and assess infrastructure; right to own
or to exploit intellectual property rights; ability to transfer to other sources of supply
or demand associated with other goods and related services (Article 26, the
Competition Law 2018). These elements are detailed in Article 12 of the Decree 35
and have made the way to clearer identify dominant market position of an enterprise
or a group of enterprises.
The new Law also adds a dominant market position of a group of five
enterprises when they own a total market share of 85% or more in the relevant
market and supplements the clause to exclude an enterprise holding market share of
less than 10% in the relevant market (Clause 2 and 3, Article 24).
On the other hand, the wording in the regulation on prohibited abuse of a
dominant position and of monopoly position (Article 27) is also amended to be
more logical, strict and tight. Such behaviors are prohibited not only when have
caused damage to customers or driven competitors out of market as regulated in the
2004 Law but also prohibited when such behaviors probably lead to these
consequences.
2.1.3 Regulations on economic concentration
The amended Competition Law separates the contents of the regulations on
economic concentration from the contents of anti-competitive behaviors, in order to
accurately re-evaluate the nature and impact of each group to a competitive
environment. Indeed, economic concentration should be construed as the right of a
business owner to self-operate. Enterprises participating in economic concentration
will proactively accumulate economic resources such as capital, labor, management
capacity, business organization, science and technology, in order to form a unified
enterprise, a corporation. The economy is growing to be able to compete better in
the domestic and international markets.
Accordingly, instead of incorporating economic concentration into anti-
competitive behavior, the revised Law separates this economic concentration into an
independent group for more specific and effective control rules. In addition, the

COMPETITION LAW OF VIETNAM 2018 AND ISSUES INVOLVED IN ENFORCEMENT

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COMPETITION LAW OF VIETNAM 2018 AND ISSUES INVOLVED IN ENFORCEMENT