On 15 September 2017, the fifth draft of the new Competition Law was published on Vietnam’s National Assembly Office portal for public review and comment. The fifth draft is being reviewed by the Standing Committee of the National Assembly and is expected to be passed in May 2018.
While retaining many notable clauses set out in the second draft, published in April 2017, the fifth draft also presents substantial changes.
Distinction between horizontal and vertical anti-competitive agreements. Article 12, regarding prohibited anti-competitive agreements, now distinguishes between horizontal and vertical anti-competitive agreements. Businesses in a vertical relationship are prohibited from entering into certain anti-competitive agreements if “such agreement creates, or can possibly create, a substantial anti-competitive effect to the market”. Article 13 provides further details on the criteria for the National Competition Authority (NCA) to assess this.
Merger control thresholds. The second draft provided that “an economic concentration shall be prohibited if it creates, or can possibly create, a substantial anti-competitive effect to the Vietnam market”. The fifth draft further adds that “economic concentration shall be prohibited if it creates, or may possibly create, a substantial anti-competitive effect to the Vietnam market, and there is no possible remedy to cure such effect”.
The threshold to notify an economic concentration is also more flexible. The fifth draft now tasks the government to provide and adjust the thresholds with regard to: (1) total assets in Vietnam of either of the enterprises participating in the transaction; (2) total revenues in Vietnam of either of the enterprises participating in the transaction; and (3) total value of the transaction. A transaction will be notifiable if any of these thresholds is met.
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