REGULATION PROHIBITING AGREEMENTS TO RESTRICT COMPETITION IN VIETNAM

I. Legal basis

– Competition Law 2018

II. Regulation prohibiting agreements to restrict competition in Vietnam

Agreements to restrict competition are one of the prohibited acts in the field of competition to protect a healthy, transparent and fair business environment. These behaviors not only harm other businesses but also negatively affect consumers and the sustainable development of the economy. In Vietnam, competition law, especially the Competition Law 2018, has provided specific regulations to prevent and handle anti-competitive agreements to protect the legitimate interests of related parties. and promote fair competition in the market.

1. Definition of anti-competitive agreement

An agreement to restrict competition is an agreement between parties in any form that affects or has the potential to affect competition. Accordingly, anti-competitive effects are effects that eliminate, reduce, distort or hinder competition in the market.

2. Agreements that restrict competition are prohibited:

a) Agreements to limit competition between businesses in the same related market include:

• Agreement to fix prices of goods and services directly or indirectly.
• Agreement to divide customers, divide consumer markets, source of goods, and provide services.
• Agreement to limit or control the quantity and volume of production, purchase, sale of goods or provision of services.

b) Agreements to limit competition between businesses include:

• Agreement for one or more parties participating in the agreement to win the bid when participating in bidding to provide goods or provide services.
• Agreement to prevent, restrain or prevent other businesses from entering the market or developing their business.
• The agreement eliminates from the market businesses that are not parties to the agreement.

c) Agreements to restrict competition between enterprises in the same relevant market when that agreement causes or is likely to cause a significant anti-competitive effect on the market include:

• Agreement to limit technical and technological development and limit investment.
• Agreement to impose or fix conditions for signing a contract to buy or sell goods or provide services to another enterprise or agreement to force another enterprise to accept obligations not directly related to the subject of the contract .
• Agreement not to trade with parties not participating in the agreement.
• The agreement limits the product consumption market, goods supply, and service provision of parties not participating in the agreement.
• Other agreements that cause or are likely to cause anti-competitive effects.

d) Agreements to limit competition between businesses doing business at different stages in the same production, distribution, or supply chain for a certain type of goods or services when that agreement has an impact or has The ability to significantly restrict competition in the market includes:

• Agreement to fix prices of goods and services directly or indirectly.
• Agreement to divide customers, divide consumer markets, source of goods, and provide services.
• Agreement to limit or control the quantity and volume of production, purchase, sale of goods or provision of services.
• Agreement to limit technical and technological development and limit investment.
• Agreement to impose or fix conditions for signing a contract to buy or sell goods or provide services to another enterprise or agreement to force another enterprise to accept obligations not directly related to the subject of the contract .
• Agreement not to trade with parties not participating in the agreement.
• The agreement limits the product consumption market, goods supply, and service provision of parties not participating in the agreement.
• Other agreements that cause or are likely to cause anti-competitive effects.

3. Exemption from prohibited anti-competitive agreements

Agreements to restrict competition specified in Clauses 1, 2, 3, 7, 8, 9, 10 and 11 of Article 11 are prohibited according to the provisions of Article 12 of the Competition Law 2018 and are exempted for a limited time if beneficial to the customer. consumer and meets 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.

Labor agreements and cooperation agreements in specific industries and fields that are implemented according to the provisions of another law shall comply with the provisions of that law.

4. The meaning of prohibiting anti-competitive agreements

Banning anti-competitive agreements brings many important implications for the economy, businesses, consumers, and the sustainable development of society. Specifically: 

• Prohibition of price fixing agreements: To limit businesses from agreeing to fix or adjust prices of goods and services, causing damage to consumers.
• Prohibition of market division agreements: To limit the parties’ agreement to divide customers, supplies, or business territories for exclusive exploitation.
• Prohibition of agreements to limit or control the quantity of production and distribution: To limit situations that cause scarcity or excess supply.
• Prohibit agreements that hinder or restrict technical or technological development: to limit and reduce innovation and competition in the market.
• Prohibition of non-transaction agreements with outside parties: To prevent businesses from restricting the choices of customers or business partners.
• Prohibition of agreements to eliminate competitors from the market: To limit the purpose of monopoly or increasing unfair advantage.

5. Conclude

Anti-competitive agreements are strictly prohibited in all developed economies to ensure fairness and sustainability in the market. The strict regulations of the Competition Law 2018 not only create a solid legal framework to handle violations but also play an important role in building a transparent and healthy business environment. Therefore, complying with the law and raising awareness of fair competition not only protects the interests of businesses but also contributes to promoting the long-term economic development of the country.

III. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

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