Competition law violation

The rapid development of industries has created competitive pressures on companies and led to competition law violations. In line with the reforms and openness policy, the Vietnamese economy has achieved impressive growth over the past several years. Long-term planning that helps to create competitive advantage is used by most companies to increase their market share.

However, instead of increasing their competitiveness, some companies use a variety of ways to eliminate their rivals to dominate the market or exclusively decide the price of goods. The above acts violate the Competition Law and negatively affect the Vietnamese economy. According to Competition Law 2004, the following actions violate the Competition Law:

COMPETITION RESTRICTION AGREEMENTS

In the Competition Law 2004, there is no article stipulating the concept of “competition restriction agreement”. Instead, it only stipulates acts violating the Competition Law by listing agreement acts in the Article 8 of the Competition Law.

• Agreements on directly or indirectly fixing goods or service prices;
• Agreements on distributing outlets, sources of supply of goods, provision of services;
• Agreements on restricting or controlling produced, purchased or sold quantities or volumes of goods or services;
• Agreements on restricting technical and technological development, restricting investments;
• Agreement on imposing on other enterprises conditions on signing of goods or services purchase or sale contracts or forcing other enterprises to accept obligations which have no direct connection with the subject of contracts;
• Agreements on preventing, restraining, disallowing other enterprises to enter the market or develop business;
• Agreements on abolishing from the market enterprises other than the parties of the agreements;
• Conniving to enable one or all of the parties of the agreement to win bids for supply of goods or provision of services.

The listing of violations of the Competition Law shows that Vietnamese law does not care whether the agreements are made publicly or implicitly, but the purposes of the agreements.

ABUSE OF DOMINANT POSITION ON THE MARKET, ABUSE OF MONOPOLY POSITION

Enterprises shall be considered to hold the dominant position on the market if they have market shares of 30% or more on the relevant market or are capable of restricting competition considerably. Prohibited acts for violating the Competition Law include:

• Selling goods, providing services at prices lower than the aggregate costs in order to eliminate competitors;
• Imposing irrational buying or selling prices of goods or services or fixing minimum re-selling prices causing damage to customers;
• Restricting production, distribution of goods, services, limiting markets, preventing technical and technological development, causing damage to customers;
• Imposing dissimilar commercial conditions in similar transactions in order to create inequality in competition;
• Imposing conditions on other enterprises to conclude goods or services purchase or sale contracts or forcing other enterprises to accept obligations which have no direct connection with the subject of such contracts;
• Preventing new competitors from entering the market;
• Imposing unfavorable conditions on customers;
• Abusing the monopoly position to unilaterally modify or cancel the contracts already signed without plausible reasons.

ECONOMIC CONCENTRATION

According to Article 16 of the Competition Law, economic concentration means acts of enterprises, including: Merger of enterprises; Consolidation of enterprises; Acquisition of enterprises; Joint venture between enterprises; and Other acts of economic concentration prescribed by law.

UNFAIR COMPETITION ACTS

According to Clause 4, Article 3 of the Competition Law 2004, “Unfair competition acts mean competition acts performed by enterprises in the process of doing business, which run counter to common standards of business ethics and cause damage or can cause damage to the State’s interests, legitimate rights and interests of other enterprises or consumers.” Unfair competition acts in this Law include:

• Misleading indications;
• Infringement upon business secrets;
• Constraint in business;
• Discrediting other enterprises;
• Disturbing business activities of other enterprises;
• Advertising for the purpose of unfair competition;
• Sale promotion for the purpose of unfair competition;
• Discrimination by associations;
• Illicit multi-level sale. 

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