The new Competition Law comes into force as of July 1, 2019
15:53 14/08/2018
On June 12, 2018, the National Assembly promulgates the Competition Law. This Law sets forth anti-competitive practices, economic concentration that causes or may cause anti-competitive effects on the market of Vietnam; unfair competition practices; competition legal proceedings; sanctions against violations of competition law; state management of competition.
The entities regulated by this Law are business organizations and individuals including enterprises that produce and provide public-utility products and services, enterprises that operate in state-monopolized sectors/domains, public sector entities and foreign enterprises that operate in Vietnam; Industry associations operating in Vietnam and relevant domestic and foreign agencies, organizations and individuals.
The Law lists prohibited unfair competition practices as follow:
1. Trade secret infringement in the following forms: Assessing and acquiring trade secrets by going against security measures of the owner of such trade secrets; Disclosing or using trade secrets without consent of the owner.
2. Forcing customers or business partners of other enterprises through threatening or coercion so that they do not enter in transaction or stop transaction with such enterprises.
3. Discrediting competitors through directly or indirectly providing untruthful information about such competitors which negatively impacts their goodwill, financial status or business operation.
4. Disrupting competitors’ business through directly or indirectly interrupting or disrupting their legitimate business operation.
5. Illegally luring customers through: Providing false or misleading information to customers about the enterprise or products, services, sale promotion programs, transaction conditions related to the products or services provided by the enterprise to attract customers of competitors; Comparing products, services of the enterprise with those of the same kinds of competitors without evidence to prove the comparison.
6. Sale of goods and services below cost that drives or probably drives competitors out of the market.
7. Other prohibited unfair competition practices prescribed in other laws.
According the Law, the National Competition Commission is a body affiliated to the Ministry of Industry and Trade, composed of President, Deputy Presidents, and members. The Competition Investigation Agency and other units form an assisting apparatus of the National Competition Commission. The Competition Investigation Agency is an authority under the National Competition Commission and in charge of investigating violations against this Law. The Competition Investigation Agency has the duties and powers to: Gather and receive information for detecting signs of violations against this Law; Organize the investigation of competition cases; Propose the application, change or cancellation of measures to prevent and guarantee imposition of sanctions against administrative violations in investigation and settlement of competition cases; Carry out investigation measures in the course of investigating competition cases as per the law; Other duties as assigned by the Chairperson of the National Competition Commission.
Regarding the procedures for investigation and settlement of competition cases, an entity when having doubt or detecting signs of violation of the provisions of this Law will have to notify and provide information and evidence for the National Competition Commission. Organizations and individuals shall be responsible for the truthfulness of the information and evidence provided to the National Competition Commission. When required, the National Competition Commission take necessary measures to ensure the confidentiality of information and identity of the organizations or individuals providing information or evidence. The National Competition Commission will be responsible for receiving, verifying and evaluating information and evidence on violations provided by organizations and individuals. The National Competition Commission has the right to request the organizations and individuals to provide further information, documents and evidence to clarify signs of violation.
Organizations and individuals assuming that their rights and interests are breached due to violations of this Law have the right to lodge complaints against competition cases to the National Competition Commission. The time limit for making such a complaint is 3 years since the performance of the acts with signs of violation of competition law.
Any entity committing violation of competition law shall, depending on the nature and seriousness of their violations, be disciplined, incur penalties for administrative violations or face a criminal prosecution; in case of damage to the interests of the State, legitimate rights and interests of organizations and individuals, compensation must be paid according to the provisions of law.
The maximum fine for violations of regulations on anti-competitive agreements, abuse of the dominant position on the market, abuse of the monopoly position shall be equal to 10% of the total turnover of violating enterprises on the relevant market in the fiscal year preceding the year of violation, but not less than the minimum fine imposed on violations prescribed by the Penal Code. The maximum fine for violations of economic concentration regulations shall be 5% of the total turnover of violating enterprises on the relevant market in the fiscal year preceding the year of violation. The maximum fine for violations of regulations on unfair competition shall be VND 2 billion. The maximum fine for other violations of this Law shall be VND 200 million.
This Law comes into force as of July 1, 2019. The Competition Law No. 27/2004/QH11 ceases to be effective from effective date of this Law.
From effective date of this Law, violations against competition law prescribed in the Competition Law No. 27/2004/QH11 shall be considered further as follows: If a violation is determined not contravening this Law during investigation, the investigation will be suspended; If a violation is determined contravening this Law during the investigation and handling of complaint, the investigation or handling of complaint shall keep being carried out as prescribed in this Law. If the penalties or amounts of fines imposed on violations prescribed in this Law are higher than those prescribed in Competition Law No. 27/2004/QH11, Competition Law No. 27/2004/QH11 shall prevail.
The Law lists prohibited unfair competition practices as follow:
1. Trade secret infringement in the following forms: Assessing and acquiring trade secrets by going against security measures of the owner of such trade secrets; Disclosing or using trade secrets without consent of the owner.
2. Forcing customers or business partners of other enterprises through threatening or coercion so that they do not enter in transaction or stop transaction with such enterprises.
3. Discrediting competitors through directly or indirectly providing untruthful information about such competitors which negatively impacts their goodwill, financial status or business operation.
4. Disrupting competitors’ business through directly or indirectly interrupting or disrupting their legitimate business operation.
5. Illegally luring customers through: Providing false or misleading information to customers about the enterprise or products, services, sale promotion programs, transaction conditions related to the products or services provided by the enterprise to attract customers of competitors; Comparing products, services of the enterprise with those of the same kinds of competitors without evidence to prove the comparison.
6. Sale of goods and services below cost that drives or probably drives competitors out of the market.
7. Other prohibited unfair competition practices prescribed in other laws.
According the Law, the National Competition Commission is a body affiliated to the Ministry of Industry and Trade, composed of President, Deputy Presidents, and members. The Competition Investigation Agency and other units form an assisting apparatus of the National Competition Commission. The Competition Investigation Agency is an authority under the National Competition Commission and in charge of investigating violations against this Law. The Competition Investigation Agency has the duties and powers to: Gather and receive information for detecting signs of violations against this Law; Organize the investigation of competition cases; Propose the application, change or cancellation of measures to prevent and guarantee imposition of sanctions against administrative violations in investigation and settlement of competition cases; Carry out investigation measures in the course of investigating competition cases as per the law; Other duties as assigned by the Chairperson of the National Competition Commission.
Regarding the procedures for investigation and settlement of competition cases, an entity when having doubt or detecting signs of violation of the provisions of this Law will have to notify and provide information and evidence for the National Competition Commission. Organizations and individuals shall be responsible for the truthfulness of the information and evidence provided to the National Competition Commission. When required, the National Competition Commission take necessary measures to ensure the confidentiality of information and identity of the organizations or individuals providing information or evidence. The National Competition Commission will be responsible for receiving, verifying and evaluating information and evidence on violations provided by organizations and individuals. The National Competition Commission has the right to request the organizations and individuals to provide further information, documents and evidence to clarify signs of violation.
Organizations and individuals assuming that their rights and interests are breached due to violations of this Law have the right to lodge complaints against competition cases to the National Competition Commission. The time limit for making such a complaint is 3 years since the performance of the acts with signs of violation of competition law.
Any entity committing violation of competition law shall, depending on the nature and seriousness of their violations, be disciplined, incur penalties for administrative violations or face a criminal prosecution; in case of damage to the interests of the State, legitimate rights and interests of organizations and individuals, compensation must be paid according to the provisions of law.
The maximum fine for violations of regulations on anti-competitive agreements, abuse of the dominant position on the market, abuse of the monopoly position shall be equal to 10% of the total turnover of violating enterprises on the relevant market in the fiscal year preceding the year of violation, but not less than the minimum fine imposed on violations prescribed by the Penal Code. The maximum fine for violations of economic concentration regulations shall be 5% of the total turnover of violating enterprises on the relevant market in the fiscal year preceding the year of violation. The maximum fine for violations of regulations on unfair competition shall be VND 2 billion. The maximum fine for other violations of this Law shall be VND 200 million.
This Law comes into force as of July 1, 2019. The Competition Law No. 27/2004/QH11 ceases to be effective from effective date of this Law.
From effective date of this Law, violations against competition law prescribed in the Competition Law No. 27/2004/QH11 shall be considered further as follows: If a violation is determined not contravening this Law during investigation, the investigation will be suspended; If a violation is determined contravening this Law during the investigation and handling of complaint, the investigation or handling of complaint shall keep being carried out as prescribed in this Law. If the penalties or amounts of fines imposed on violations prescribed in this Law are higher than those prescribed in Competition Law No. 27/2004/QH11, Competition Law No. 27/2004/QH11 shall prevail.