Categories of economic concentration under the Competition Law in Vietnam

Categories of economic concentration under the Competition Law in Vietnam (Internet image)

1. Categories of economic concentration under the Competition Law in Vietnam

Categories of economic concentration under the Competition Law 2018 include:

- Merger of enterprises means an act whereby one or several enterprises transfer all of its/their property, rights, obligations and legitimate interests to another enterprise, and at the same time terminate the existence of the merged enterprises.

- Consolidation of enterprises means an act whereby two or more enterprises transfer all of their property, rights, obligations and legitimate interests to form a new enterprise and, at the same time, terminate the existence of the consolidating enterprises.

- Acquisition of enterprises means an act whereby an enterprise acquires the whole or part of property or shares of another enterprise sufficient to control or dominate all or one of the trades of the acquired enterprise.

- Joint venture between enterprises means an act whereby two or more enterprises jointly contribute part of their property, rights, obligations and legitimate interests to the establishment of a new enterprise.

- Other categories of economic concentration as per the law.

2. Prohibited economic concentration in Vietnam

Economic concentration shall be prohibited if it causes or probably cause substantial anti-competitive effects on the Vietnamese market.

3. Assessment of substantial anti-competitive effects caused or probably caused by economic concentration in Vietnam

The National Competition Commission shall assess substantial anti-competitive effects cause or probably caused by economic concentration based on the following factors:

- Combined market share of enterprises engaging in the economic concentration on the relevant market;

- The degree of concentration on the relevant market before and after the economic concentration;

- The relationship of the parties engaging in the economic concentration in the production, distribution or supply chain for a certain kind of goods/service or the business lines of the parties engaging in the economic concentration which are inputs of or complementary to one another;

- Competitive advantage brought about by economic concentration in the relevant market;

- The ability of enterprises after the economic concentration for increasing significantly their prices or return on sales;

- The ability of enterprises after the economic concentration for removing or preventing other enterprises from market entry or expansion;

- Particular factors in the sectors and domains where enterprises are engaging in economic concentration.

(Article 31 of Competition Law 2018)

4. Assessment of positive effects of economic concentration in Vietnam

The National Competition Commission shall assess positive effects of economic concentration based on one of the following factors or a combination of factors:

- Positive effects on the development of the sector, domain, science and technology in accordance with the state’s strategies and planning;

- Positive effects on the development of small and medium-sized enterprises;

- Increase of the competitiveness of Vietnamese enterprises on the international market.

(Article 32 of Competition Law 2018)

5. Notification of economic concentration in Vietnam

- The enterprises engaging in economic concentration must file a dossier of economic concentration notification (hereinafter referred to as notification dossier) to the National Competition Commission as prescribed in Article 34 of this Law before initiating economic concentration if they reach the notification threshold.

- The notification threshold shall be determined based on one of the following criteria:

+ Total assets of the enterprises engaging in the economic concentration on the Vietnamese market;

+ Total turnover of enterprises engaging in the economic concentration on the Vietnamese market;

+ The transaction value of the economic concentration;

+ Combined market share of enterprises engaging in the economic concentration on the relevant market.

(Article 33 of Competition Law 2018)

Diem My

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