Prohibited anti-competitive agreements are one of the three types of competition-restricting behaviors that impacts or potentially impacts market competition and consumer rights.
I. Current states of anti-competitive agreements
In recent years, the states regarding anti-competitive agreements in Vietnam have raised concerns. According to statistics from the Competition and Consumer Protection Authority (Ministry of Industry and Trade), between 2018 and 2022, the Authority handled 12 cases involving anti-competitive agreements, of which 4 cases resulted in administrative fines totaling more than 100 billion VND.
II. Legal issues related to anti-competitive agreements
1. What is an Anti-Competitive Agreement?
Pursuant to Clause 4, Article 3 of the Competition Law 2018, an anti-competitive agreement is an agreement between parties in any form that has or may have the effect of restricting competition.
Based on Article 11 of the Competition Law 2018 sets out the following types of anti-competitive agreements:
- Agreements on directly or indirectly fixing prices of goods and services.
- Agreements on allocating customers, or dividing markets for consumption and sources of supply of goods and services.
- Agreements on restricting or controlling the quantity and quality of production, purchase and sale of goods, or provision of services.
- Agreements on ensuring that one or more parties to the agreement obtain tenders when participating in bidding for the supply of goods or services.
- Agreements on preventing, restraining, or excluding other enterprises from entering the market or expanding their business.
- Agreements on eliminating non-participating enterprises from the market.
- Agreements on limiting technological development, and restricting investment.
- Agreements on imposing or determining conditions for entering into contracts for the purchase and sale of goods, or provisions of services with other enterprises, or agreements that force other enterprises to accept obligations not directly related to the subject matter of the contract.
- Agreements on not conducting transactions with non-participating parties.
- Agreements on restricting the product consumption markets, sources of supply of goods, or provisions of services by non-participating parties.
- Other agreements that have or may have the effect of restricting competition.
2. What types of anti-competitive agreements are prohibited?
Prohibited anti-competitive agreements are specified under Article 12 of the Competition Law 2018 and include:
- Anti-competitive agreements between enterprises operating in the same relevant market:
+ Agreements on directly or indirectly fixing the prices of goods and services.
+ Agreements on allocating customers, or dividing markets for consumption and sources of supply of goods and services.
+ Agreements on restricting or controlling the quantity and quality of production, purchase and sale of goods, or provision of services.
- Anti-competitive agreements between enterprises:
+ Agreements on ensuring that one or more parties to the agreement obtain tenders when participating in bidding for the supply of goods or services.
+ Agreements on preventing, restraining, or excluding other enterprises from entering the market or expanding their business.
+ Agreements on eliminating non-participating enterprises from the market.
- Anti-competitive agreements between enterprises operating in the same relevant market, when such agreements have or may have a significant restrictive impact on market competition:
+ Agreements on limiting technological development and restricting investment.
+ Agreements on imposing or determining conditions for entering into goods purchase and sale contracts, or provision contracts of services with other enterprises, or agreements forcing other enterprises to accept obligations not directly related to the subject matter of the contract.
+ Agreements on not conducting transactions with non-participating parties.
+ Agreements on restricting the product consumption market, sources of supply of goods, or provision of services by non-participating parties.
+ Other agreements that have or may have a restrictive impact on competition.
- Anti-competitive agreements between enterprises operating at different stages of the same production, distribution, or provision for a specific type of goods or services, when such agreements have or may have a significant restrictive impact on market competition:
+ Agreements on directly or indirectly fixing the prices of goods and services.
+ Agreements on allocating customers, or dividing markets for consumption and sources of supply of goods and services.
+ Agreements on restricting or controlling the quantity and quality of production, purchase and sale of goods, or provision of services.
+ Agreements on limiting technological development and restricting investment.
+ Agreements on imposing or determining conditions for entering into goods purchase and sale contracts, or provision contracts of services with other enterprises, or agreements forcing other enterprises to accept obligations not directly related to the subject matter of the contract.
+ Agreements on not conducting transactions with non-participating parties.
+ Agreements on restricting the product consumption market, sources of supply of goods, or provision of services by non-participating parties.
+ Other agreements that have or may have a restrictive impact on competition.
III. Questions related to anti-competitive agreements
1. How is the leniency policy applied to anti-competitive agreements?
To facilitate investigations, competition law applies a conditional leniency policy for entities that voluntarily report anti-competitive agreements, as stipulated in Article 112 of the Competition Law 2018, as follows:
+ Enterprises that voluntarily report and assist the National Competition Commission in detecting, investigating, and handling prohibited anti-competitive agreements under Article 12 of this Law shall be exempted from or have their fines reduced under the leniency policy.
+ The Chairperson of the National Competition Commission shall decide on the exemption or reduction of fines under the leniency policy.
+ The exemption or reduction of fines under Clause 1 of this Article is applied based on the fulfillment of all the following conditions:
a) The enterprise has participated or is currently participating as a party to an anti-competitive agreement as stipulated in Article 11 of this Law;
b) The enterprise voluntarily reports the violation before the competent authority issues an investigation decision;
c) The enterprise truthfully reports and provides all available information and evidence regarding the violation, which is of significant value in detecting, investigating, and handling the violation;
d) The enterprise fully cooperates with the competent authority throughout the investigation and handling process.
+ The provision in Clause 1 of this Article does not apply to enterprises that have coerced or organized other enterprises to participate in the agreement.
+ The leniency policy applies to no more than three enterprises that are the first to submit a leniency application to the National Competition Commission and meet all the conditions stipulated in Clause 3 of this Article.
+ The criteria for determining which enterprises qualify for the leniency include:
a) Order of reporting;
b) Time of the report;
c) Accuracy and value of the information and evidence provided.
+ The exemption or reduction of financial fines shall be implemented as follows:
a) The first enterprise to apply for the leniency and meet all the conditions stipulated in Clause 3 of this Article shall be exempt from 100% of the financial fine;
b) The second and third enterprises to apply for the leniency and meet all the conditions stipulated in Clause 3 of this Article shall receive fine reductions of 60% and 40%, respectively.
2. Can disputes regarding the content of an anti-competitive agreement be resolved by arbitration? .
Disputes between parties may be resolved through arbitration if they have an arbitration agreement. An arbitration agreement is an agreement between the parties in which they consent to resolve one or more disputes that have arisen or may arise between them through arbitration.
For disputes regarding the content of an anti-competitive agreement, if the parties have an arbitration agreement, the dispute may be referred to arbitration for resolution. However, the arbitration agreement must meet the following conditions:
+ The arbitration agreement must be in writing.
+ The arbitration agreement must be signed by the parties involved.
+ The arbitration agreement must be entered into voluntarily.
+ The arbitration agreement must not violate any prohibitions under the law.
If the arbitration agreement violates any legal prohibitions, it will be deemed invalid, and the dispute cannot be resolved through arbitration.
Additionally, it is important to note that an arbitration agreement concerning a dispute over the content of an anti-competitive agreement is only valid if the anti-competitive agreement itself is not prohibited by law. If the anti-competitive agreement is prohibited, then the arbitration agreement related to disputes over its content will also be deemed invalid.
3. What is the time frame for issuing an exemption decision for a prohibited anti-competitive agreement?
According to Clauses 2 and 3 of Article 20 of the Competition Law 2018, the authority and time frame for issuing an exemption decision for a prohibited anti-competitive agreement are stipulated as follows: The time frame for issuing an exemption decision for a prohibited anti-competitive agreement is 60 days from the date of acceptance of the application.
For complex cases, the time frame specified in Clause 2 of this Article may be extended by the National Competition Commission but must not exceed 30 additional days.
Any extension must be notified in writing to the applicant at least three working days before the expiration of the original decision deadline.
4. If an enterprise submits documents in a foreign language for an exemption request regarding a prohibited anti-competitive agreement, is a translation required?
According to Clause 3, Article 15 of the Competition Law 2018, when submitting an application for an exemption regarding a prohibited anti-competitive agreement, enterprises that submit documents in a foreign language must provide a Vietnamese translation.
5. Can an enterprise engaged in a prohibited anti-competitive agreement be granted an exemption if it benefits consumers?
According to Article 14 of the Competition Law 2018, exemptions for prohibited anti-competitive agreements may be granted under the following conditions:
Enterprises engaged in a prohibited anti-competitive agreement, as stipulated in Clauses 1, 2, 3, 7, 8, 9, 10, and 11 of Article 11 of the Competition Law, may be eligible for an exemption if they meet at least one of the following conditions:
+ The agreement promotes technological or technical progress and enhances the quality of goods and services.
+ The agreement improves the competitiveness of Vietnamese enterprises in international markets.
+ The agreement facilitates the uniform application of quality standards and technical norms for a specific type of product.
+ The agreement standardizes contract execution conditions, delivery, and payment terms, provided that it does not involve price-fixing or price-related elements.
6. How can an enterprise qualify for leniency after engaging in a prohibited anti-competitive agreement?
According to Clause 1, Article 112 of the Competition Law 2018, the leniency policy allows enterprises that voluntarily report their involvement in a prohibited anti-competitive agreement to the National Competition Commission to receive full or partial immunity from penalties.
Thus, enterprises that engage in prohibited anti-competitive agreements may qualify for leniency under the law if they voluntarily report their violations.
The above information provides an overview of anti-competitive agreements. For further legal support and in-depth consultation on relevant laws and regulations, please contact NPLaw, where our team of experienced lawyers and legal professionals is available to assist you.
