An enterprise’s anti-competitive agreement causes a lot of damage to competitors in the market. Therefore, the Vietnam State has issued the Competition Law, Decree 35/2020/ND-CP guiding the Competition Law and Decree 75/2019/ND-CP regulating sanctions for administrative violations in the field of competition.
1. What is the anti-competitive agreement?
According to the Competition Law 2018, an agreement to restrict competition is one of the acts that restrict competition, defined as an agreement between parties in any form that causes or has the potential to cause anti-competitive effects.
2. Anti-competitive agreements are prohibited
Prohibited anti-competitive agreements specified in the Competition Law 2018 include:
(1) The following anti-competitive agreements between enterprises in the same relevant market:
- Agreements on directly or indirectly fixing goods or service prices.
- Agreements on distributing customers, consumption market, sources of supply of goods, provision of services.
- Agreements on limiting or controlling the quantity, volume of produced, purchased, sold goods or provided services.
(2) The following anti-competitive agreements between businesses:
- Agreements for one of more parties to the agreements to win tenders when participating in tenders for the supply of goods or services.
- Agreements on preventing, restraining, disallowing other enterprises from entering the market or developing business.
- Agreements on abolishing from the market enterprises other than the parties to the agreements.
(3) Agreements to restrict competition between enterprises in the same relevant market when that agreement causes or is likely to have a significant effect of restricting competition in the market:
- Agreements on restricting technical or technological development and investments.
- Agreement on imposing on other enterprises conditions for signing of goods or services purchase or sale contracts or forcing other enterprises to accept obligations which have no direct connection with the subject of such contracts.
- Agreements on not trading with enterprises other than the parties to the agreements.
- Agreements on restricting consumption market, sources of supply of goods and services from enterprises other than the parties to the agreements.
- Other agreements that cause or may cause anti-competitive effects.
(4) Agreements to limit competition between businesses doing business at different stages in the same production, distribution, and supply chain for a certain type of goods or services, when such agreements cause impacts or has the potential to significantly restrict competition in the market:
- Agreements on directly or indirectly fixing goods or service prices.
- Agreements on distributing customers, consumption market, sources of supply of goods, and provision of services.
- Agreements on limiting or controlling the quantity, and volume of produced, purchased, and sold goods or provided services.
- Agreements on restricting technical or technological development and investments.
- Agreement on imposing on other enterprises conditions for signing of goods or services purchase or sale contracts or forcing other enterprises to accept obligations which have no direct connection with the subject of such contracts.
- Agreements on not trading with enterprises other than the parties to the agreements.
- Agreements on restricting consumption market, sources of supply of goods and services from enterprises other than the parties to the agreements.
- Other agreements that cause or may cause anti-competitive effects.
However, there are still limited exemptions from prohibited anti-competitive agreements if they are beneficial to consumers and meet one of the following conditions:
- Impact of promoting technical and technological progress, improving the quality of goods and services;
- Enhance the competitiveness of Vietnamese enterprises in the international market;
- Promote the uniform application of quality standards and technical norms of product categories;
- Agree on conditions for contract performance, delivery, and payment, but not related to price and price factors.
3. Forms of handling violations of regulations on anti-competitive agreements
Based on consideration of factors such as the level of competition restriction caused by the violation, the level of damage caused by the violation, and the ability of the violators to cause competition restriction, time of committing the violation, profit earned from committing the violation and mitigating and aggravating circumstances (Decree 75/2019/ND-CP), enterprises violate regulations on anti-competitive agreements may be subject to the following forms of violation handling:
- A fine with a maximum fine of 10% of the total revenue of the enterprise that committed the violation on the relevant market in the fiscal year immediately preceding the year of the violation, but lower than the lowest fine for Organizations and individuals commit violations specified in the Criminal Code.
- Additional penalties: such as confiscation of profits earned from committing violations.
- Remedial measures such as forcing the removal of illegal terms from contracts or business transactions.
Therefore, it should be noted that the implementation of activities related to anti-competitive agreements should not be taken lightly and must comply with specific legal regulations. This ensures that they are not misused to restrict freedom of competition or harm vulnerable parties in the contract.
