Vietnam: What is a dominant market enterprise?

The capability of an enterprise to significantly restrict competition on a relevant market shall be determined on one or some of the following major grounds:

- Financial capability of the enterprise.

- Financial capability of the economic organization or individual that has established the enterprise.

- Financial capability of the organization or individual that has the right to control or dominate the operation of the enterprise according to the provisions of law or the enterprise's charter.

- Financial capability of the parent company.

- Technological capability.

- The right to own or use industrial property objects.

- The scope of the distribution network.

A group of enterprises shall be deemed to be in a dominant market position if they act together in order to restrain competition and fall into one of the following categories:

- Two enterprises have a market share of fifty (50) per cent or more in the relevant market;

- Three enterprises have a market share of sixty five (65) per cent or more in the relevant market;

- Four enterprises have a market share of seventy five (75) per cent or more in the relevant market.

However, it should also be noted that the State strictly prohibits businesses from abusing their dominant market position to commit competition violations. Violations may be subject to administrative fines of up to 10% of total revenue in the fiscal year preceding the year of the enterprise's violation.

Practices constituting abuse of dominant market position which are prohibited

- Selling goods or providing services below total prime cost of the goods aimed at excluding competitors;

- Fixing an unreasonable selling or purchasing price or fixing a minimum re-selling price goods or services, thereby causing loss to customers;

- Restraining production or distribution of goods or services, limiting the market, or impeding technical or technological development, thereby causing loss to customers;

- Applying different commercial conditions to the same transactions aimed at creating inequality in competition;

- Imposing conditions on other enterprises signing contracts for the purchase and sale of goods and services or forcing other enterprises to agree to obligations which are not related in a direct way to the subject matter of the contract;

- Preventing market participation by new competitors.

Legal basis: Law on Competition 2004 of Vietnam, Decree No. 116/2005/NĐ-CP of Vietnam’s Government

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