Vietnam strengthens competition law with new amendments

Vietnam has adopted significant amendments to strengthen its Competition Law. The main amendments entered into force on 1 July 2019.

Vietnam has adopted significant amendments to its competition law, which will strengthen it considerably. The main amendments include:

1. Clear expansion of scope: Entities engaging in activities inside or outside of Vietnam will need to take into account the extraterritorial reach of the new law.

2. Changes to approach on anti-competitive agreements via new per se prohibitions introduced for:

• customer allocation;

• output restriction;

• bid-rigging; and

• vertical exclusionary arrangements.

Other agreements are prohibited if they have a "significant anti-competitive effect."

3. Changes to approach on economic concentrations:

• This shift in focus towards an economic concertation's anti-competitive effects is in line with anti-trust laws in other major jurisdictions.

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Guidance on implementation of new antitrust law yet to be issued

Though the competition law came into effect earlier this year, the Government has yet to announce further guidance on the application of the law, including the relevant merger notification thresholds.

In the latest draft, lawmakers have suggested a notifiable threshold of:

• VND 2,000 billion (USD 86 million) in total assets for either party;

• VND 2,000 billion (USD 86 million) in total revenues for either party;

• VND 1,000 billion (USD 43 million) in total value of the transaction; or

• combined market share of 20% or more in the relevant market.

Meeting any of the above criteria would trigger the filing requirement.

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New penalty rules for antitrust violations take effect 1 December 2019

New penalty regulations on sanctioning standards and the penalties for each infringement are now in effect.

Issued by the Vietnam Government on 26 September 2019, notable changes in the new penalty rules include:

• creation of a distinction between administrative fines for violations of horizontal and vertical agreements;

• lowering of fines for merger control infringements; and

• narrowing of fines to the entity's total turnover within the relevant market (as opposed to general total turnover).

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