Antitrust and anti-competitive practices not only limit the market‘s expansion but also cause serious harm to consumer rights and hinder the sustainable development of the economy. Recognizing such importance, Vietnam has promulgated and continuously improved its legal system to control and prevent such antitrust practices. In this article, we will explore the current legal regulations relating to competition law (antitrust law) in Vietnam.

I. Current situation of competition law (antitrust law) in Vietnam

In recent years, along with the rapid development of the socialist-oriented market economy, Vietnam has made certain progress in establishing and enforcing competition law, particularly antitrust. 

However, in practice, anti-competitive conduct, abuse of market dominance, and corporate takeovers still occur in various sophisticated forms. Although the Competition Law 2018 introduced significant amendments and supplements compared to the former law, its practical implementation still faces numerous challenges, such as regulatory authorities lack sufficient resources and experience, detection and handling of violations are not deterrent enough, and corporate awareness of competition law (antitrust law) remains limited.

II. What is competition law (antitrust law) in Vietnam?

1. The importance of competition law (antitrust law) in Vietnam

The competition law (antitrust law) in Vietnam is not only a tool to control the economic power of large corporations but also contributes to fostering a fair competitive environment, thereby:

  • Protecting consumer rights by preventing unreasonable price increases or restricting product choices.

  • Encouraging innovation, as enterprises are forced to compete fairly rather than abusing market power.

  • Creating favorable conditions for small and medium-sized enterprises to grow.

  • Enhancing national competitiveness in the process of global economic integration.

2. Main points of competition law (antitrust law) in Vietnam 

On December 3, 2004, the National Assembly passed the first Competition Law, which came into force on July 1, 2005. The Competition Law 2004 was considered an important legal framework contributing to establishing and maintaining a fair and healthy competitive environment, thereby fostering national economic development and mobilizing resources effectively to best protect consumer rights.

Despite notable achievements, the results after years of implementation fell short of expectations due to inherent shortcomings, difficulties, and obstacles. To address such limitations, on June 12, 2018, the National Assembly adopted the Competition Law 2018, which amended and supplemented, and took effect on July 1, 2019.

When understanding or applying competition law (antitrust law), several important aspects must be noted:

  • The concepts of “market dominance” and “competitive position” are determined based on market share percentage and market control capacity.
  • Prohibited acts include forcing customers to buy unwanted products, obstructing market entry of other enterprises, predatory pricing to eliminate competitors, etc.
  • Control of economic concentration consists of mergers and acquisitions exceeding certain thresholds that must be reported to competent authorities.
  • In addition to administrative fines, enterprises may be required to remedy consequences or even have their licenses revoked in serious cases.

III. Legal regulations on competition law (antitrust law) in Vietnam

1. Important regulations related to competition law (antitrust law) in Vietnam

Vietnam currently regulates anti-competitive (antitrust) practices mainly through the Competition Law 2018 and its implementing regulations such as Decree No. 35/2020/NĐ-CP. The objective is to control acts that may distort the market, hinder fair competition, and harm consumers.

Main provisions must pay close attention to include:

  • Articles 24 and 25 of the Competition Law 2018 on determination of dominant and ainti-competitvie positions.
  • Article 27 on prohibited acts of abuse of market dominance and competition.
  • Article 28 on control of enterprises operating in State monopolies.
  • Articles from 29 to 44 on control of economic concentration (mergers, consolidations, acquisitions, joint ventures, etc.), requiring notification if exceeding thresholds relating to revenue, assets, or market share.

2. Sanctions for enterprises violating competition law (antitrust law) 

Enterprises abusing a competitive position to obstruct other enterprises from market participation are subject to sanctions under Clauses 1, 2 and 3, Article 9 of Decree No. 75/2019/NĐ-CP. Accordingly, fines range from 1% to 10% of the total turnover in the relevant market in the financial year preceding the year of violation.

In addition, such enterprises may be subject to one or more remedial measures under Clause 4, Article 110 of the Competition Law 2018, including:

  • Restructuring enterprises that abuse market dominance or competition;
  • Eliminating illegal clauses from contracts, agreements, or business transactions;
  • Subjecting post-merger entities to State supervision on purchase price, sale price, or other contractual terms;
  • Issuing public corrections;
  • Other necessary measures to remedy the consequences of violations.

The maximum fine for violations relating to anti-competitive (antitrust) agreements, abuse of dominance, or abuse of competition is 10% of the violating enterprise’s total turnover in the relevant market in the financial year preceding the violation, but not lower than the minimum fine prescribed for criminal offenses under the Penal Code.

For individuals committing administrative violations in competition, the maximum fine is half of the maximum fine applicable to organizations.

IV. Questions on competition law (antitrust law) in Vietnam

1. Does competition law (antitrust law) apply to all sectors in Vietnam?

The Competition Law applies to most business sectors in Vietnam, with some exceptions:

  • Sectors under State monopoly management, such as national defense, security, or certain essential public services, may not be directly regulated or may have special mechanisms.
  • Enterprises assigned public service obligations may be exempt from certain provisions if anti-competitive practices are necessary to fulfill such obligations and are approved by the State.

In principle, however, all enterprises engaged in goods and services business within Vietnam, including foreign-invested enterprises fall within the scope of the Competition Law if they engage in anti-competitive conduct.

2. Must enterprises disclose information about anti-competitive (antitrust) conduct to avoid violations?

No disclosure of anti-competitive practices is required, but reporting or approval is mandatory in certain circumstances:

  • Enterprises are not obliged to publicly disclose business strategies, even if they may affect competitors.
  • However, in cases of economic concentration (mergers, acquisitions, etc.), if thresholds under the Competition Law and Decree No. 35/2020/NĐ-CP are exceeded, enterprises must notify the National Competition Commission in advance.
  • Failure to notify before executing the transaction constitutes a violation and may lead to sanctions.
  • Moreover, even if undisclosed, anti-competitive practices will still be investigated if signs of violations exist, regardless of secrecy or implicit conduct.

3. Does Vietnam’s competition law (antitrust law) apply to foreign enterprises operating here?

Article 2 of the Competition Law 2018 stipulates its application to both domestic and foreign enterprises if their activities relate to the Vietnamese market. Accordingly, if a foreign enterprise conducts acts that restrict or are capable of restricting competition in the Vietnamese market, even without a presence in Vietnam, it still falls under the scope of Vietnam’s competition law.

V. Should enterprises consult a lawyer regarding anti-competitive (antitrust) issues in Vietnam?

Consulting a lawyer is essential when enterprises or individuals encounter issues relating to competition law (antitrust law). A lawyer can assess legal risks, provide compliance guidance, assist in dealings with regulators, and protect rights in case of disputes or investigations.

For further advice on Vietnam’s anti-monopoly law, please contact NPLaw for direct consultation and guidance.