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4 SIGNIFICATION POINTS OF COMPETITION BILL

Friday 25, 05 2018
On May 24, Economic Committee of the National Assembly will present the explanation report, receive ideas to adjust the Law on Business Competition (revised). After discussing and collecting comments, there are four new points highlighted as followed
4 SIGNIFICATION POINTS OF COMPETITION BILL
On May 24, Economic Committee of the National Assembly will present the explanation report, receive ideas to adjust the Law on Business Competition (revised). After discussing and collecting comments, there are four new points highlighted as followed.

The first is expanding in Scope and objects. In detail, the law will adjust foreign companies even they do not have any offices in Vietnam. Thereby, all unfair competition actions having negative impact on Vietnam market would be sanctioned.

The next new point is that the law on competition do not regulate clearly about percentage of combined market share among co-operated companies. You can easily know through the case of Uber and Grab M&A activity in recent. If total market share is over 50%, company has to notice to appropriate authorities. However, in new law, allowable market share would be decided by government and changed to suitable for each period of development.

Besides, there is a chapter to regulate detailing the abuse of dominant or monopoly positions in the market. An enterprise is considered to have a dominant position if it occupies 30% of the market share; 50% market share (2 companies); 65% market share (3 companies) or 75% market share (4 companies). These groups co – operating to obstruct other companies entering the market or controlling demand and supply, and prices in the market  are punishable by law.

Another change that is a government authority violating business competition law is also treated. We have heard too much about that, province A suggested enterprises using only beer produced in this province, province B requires state agencies using only services of this bank without using the ones of the others. 

These changes are expected to create a more fair competitive environment for businesses. But from a business perspective, what do they expect?

"Recently, we we did a good job on removing market entry. However, the law regulated in business activities is not strict to cause to unfair competition "- Mr. Dau Anh Tuan - Head of Legal Department, Vietnam Chamber of Commerce and Industry (VCCI)

"At present, there are large enterprises and groups in the world entering to Vietnam market through M&A. Then they purchase retail systems in Vietnam to bring easily their country’s products to Vietnam Market. It is also a matter that business competition law should mention "- Mr. Dao Ngoc Nam - Chairman of An Viet Food


 
Categories:
Business

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