Vietnam: Which products and services will be regarded as interchangeable for each other from May 15, 2020?

According to Article 4 of Decree No. 35/2020/ND-CP of Vietnam’s Government, the relevant product market is the market where products and services that are regarded as interchangeable or substitutable in terms of their characteristics, uses and prices are sold. Specifically, the determination of the relevant product market shall be carried out as follows:

1. Products and services will be regarded as interchangeable or substitutable if they are identical or homogeneous in terms of one or several elements as follows:

- Their characteristics;

- Their composition;

- Their physical and chemical properties;

- Their technical functions;

- Their side effects on users;

- User’s absorbability;

- Other specific attributes and qualities.

2. Products and services will be regarded as interchangeable or substitutable in terms of their uses if their main uses are identical.

3. Products and services will be regarded as interchangeable or substitutable in terms of their prices if the percent difference in these prices is not over 5% under similar transactional conditions. If the percent difference is more than 5%, the National Competition Commission may identify products and services regarded as interchangeable or substitutable in terms of their prices by taking into consideration several additional elements referred to in clause 5, or by employing determination methods specified in clause 6 of this Article.

However, Decree No. 35/2020/ND-CP stipulates that in case where determining whether products and services have properties and attributes that prove their interchangeability or substitutability as provided in clause 2, 3 and 4 of this Article gives insufficient evidence for the conclusion about the relevant product market, National Competition Commission shall additionally take into consideration one or several elements as follows:   

- Rate of demand-side substitution of a product or service in case of any change in price of another product or service that takes place;

- Required costs and time that a consumer spends on buying or using another substitute product or service;  

- Useful lifespan of products or services;

- Consumption habits;

- Law affecting substitutability of products and services;

- Distinguishability in terms of buying and selling prices between different consumer groups;

- Supply-side substitutability of a product or service prescribed under Article 5 herein.

View more details at Decree No. 35/2020/ND-CP of Vietnam’s Government effective from May 15, 2020.

Le Hai

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