Draft Law on E-Transaction to regulate dominant digital platforms

The current draft Law on E-Transaction ("Draft Law") imposes certain obligations on digital platforms that are considered dominant.

On 04 May 2022, the Draft Law was released for public comment. From a competition law perspective, Article 74 of the Draft Law proposes to impose specific additional obligations for digital platforms that are considered dominants. Such "dominant digital platforms" are defined as large platforms with a dominant position that play an especially significant role in connecting goods and services providers with a large number of users in Vietnam. Further criteria to determine "dominant digital platform" will be provided by the Ministry of Information and Communication ("MIC"). The MIC must also publish and regularly update this list of "dominant digital platforms". Under the current Draft Law, such platforms must comply with additional obligations:

  • to provide users with options not customized to their personal characteristics, or an option to turn off algorithmic recommendations;
  • not to use any algorithmic recommendations that prevent users from making an accurate decision when buying goods/services, or making them over-consume;
  • to clearly and appropriately notify users with the use of algorithmic recommendations on the platform, their fundamental principle, purpose, intention and main operation mechanisms;
  • not to use data collected from the activities of sellers and service providers on the platform for the purposes of competing with the same sellers or service providers; and
  • to allow users to uninstall any application that is pre-installed on the dominant digital platform without affecting the basic technical functions of the platform.

VCCA publishes 2021 Annual Report

Notable developments in 2021 include:

  • Key sectors of focus included beer, fertilizer, aviation, motorcycles, compressed natural gas, steel, construction materials for the North-South expressway, marine logistics, and animal feed. VCCA confirmed three complaints of anti-competitive conduct, two of which concern alleged abuse of dominance with respect of distribution and direction by a local authority that allegedly forced enterprises to contract with a specific entity.
  • The VCCA processed 130 merger notifications, include 109 acquisitions, 12 mergers and 6 joint-ventures. 3 transactions were determined not notifiable under the competition law.
  • Enforcement activity involving unfair competition practices include a recommendation regarding alleged unlawful restriction of the distribution of publications in the beer market. The VCCA also reviewed advertisements of products with information about the prevention of the harmful effects of coronavirus, as well as medicinal products that may be exaggerating product use.
  • Various regulations regarding the establishment of the Viet Nam National Competition Commission, such as on its functions, duties, powers and organisational structure, are still under development. It is yet unclear when the new authority will be established.

VCCA releases study on competition law and IP rights

On 21 June 2022, VCCA published an abstract of the ministerial-level scientific study project titled "The current situation and proposed solutions to enforce competition law related to the protection of intellectual property rights". The study concluded that the interplay between competition law and IP law is complex. Current IP Law only addresses acts of unfair competition in enforcing IP rights, and refers to competition laws for regulation on anti-competitive conduct. The competition regime governs anti-competitive behaviours without any specific provisions concerning IP. This has meant a lack of a coordination mechanism between IP and competition authorities, and overall less efficient enforcement activities.

To that end, the study proposed regulations and precedents connecting the two areas of law (e.g., joint circulars between the Ministry of Trade and Industry and the Ministry of Science and Technology), as well as to establish a coordination mechanism between enforcement authorities. More information on the report can be found here.