I. Legal basis

– Competition Law 2018

II. Concept of monopoly position of an enterprise

A monopoly position of a business is a state in which one business has control and domination of the market for a certain type of good or service, with little or no competition from other businesses. . The monopoly position of an enterprise (monopoly market) is often characterized by three main factors, reflecting the control and domination of one or a few sellers over the entire market, accordingly:

• First, a monopoly position is often completely dominated by one or a few large enterprises, creating high consumer dependence on these enterprises. This leads to them having the right to decide the price, quality of products or services without having to worry about competition from other competitors.
• Second, a manufacturer’s product or service in an oligopolistic market is often unique. These products have no similar alternatives in the market, leaving consumers with no other choice but to buy from the monopoly. For example, a company that produces a product with a special patent, which cannot be copied or replaced, will hold a monopoly position in that market.
• Finally, barriers to market entry play an important role in protecting a monopoly position. These barriers may include high investment costs, technological requirements, legal requirements or control of significant resources. This makes it difficult or impossible for new businesses to enter, ensuring that monopolies do not face new competition.

A business is considered to have a monopoly position when there is no other business directly competing in the supply of goods or services in the relevant market. According to Clause 7, Article 3 of the Competition Law 2018, the relevant market is defined as the market of goods or services that can be substituted for each other based on characteristics, purpose of use and price. This is limited to a specific geographical area with similar competitive conditions, while at the same time clearly different from neighboring geographical areas.

Businesses with a monopoly position often have a superior competitive advantage compared to other businesses in the market. However, to protect healthy competition and ensure fairness, Vietnam’s Competition Law has established regulations to prevent abuses of monopoly positions. These practices include imposing unreasonable selling or purchasing prices, restricting production or distribution, or preventing the entry of potential competitors. These regulations not only protect the rights of consumers but also promote the sustainable development of the market.

III. Abuse of monopoly position is prohibited

The following are prohibited abuses of monopoly position:

• Imposing unreasonable purchase or selling prices of goods or services or setting minimum resale prices that causes or is likely to cause damage to customers;
• Restrict production and distribution of goods and services, limit markets, and hinder technical and technological development that causes or is likely to cause damage to customers;
• Applying different commercial conditions in similar transactions leads or is likely to lead to preventing other enterprises from participating, expanding the market or eliminating other enterprises;
• Imposing conditions on other businesses in signing contracts to buy or sell goods or services or requiring other businesses or customers to accept obligations not directly related to the subject of the contract leads to or has consequences. the possibility of preventing other businesses from participating, expanding the market or eliminating other businesses;
• Prevent other businesses from entering or expanding their markets;
• Imposing unfavorable conditions on customers;
• Taking advantage of a monopoly position to unilaterally change or cancel a signed contract without a legitimate reason.

IV. Penalties for abusing an enterprise’s monopoly position

Penalties for abuse of position corporate monopoly Dspecified in as follows: “Fine from 01% to 10% of total revenue on the relevant market in the fiscal year immediately preceding the year in which the violation is committed by an enterprise with a monopoly position for one of the acts of abusing regulations in section 2.”

Note: The above fine level applies to organizations. The fine for individuals is equal to half the fine for organizations. (Clause 7, Article 4 Decree 75/2019/ND-CP)

In addition, violating businesses will have profits earned from abusing their monopoly position confiscated.

In addition, businesses that violate and abuse their monopoly position must also apply remedial measures:

• Forced restructuring of businesses to abuse monopoly position;
• Force the removal of illegal terms from contracts, agreements or business transactions;
• Forced restoration of technical and technological development conditions that businesses have hindered;
• Force the removal of adverse conditions imposed on customers;
• Forced restoration of contract terms, contracts that have been changed or canceled without a legitimate reason. (Clause 2, 3, Article 9 Decree 75/2019/ND-CP)

V. Measures to control abuse of an enterprise’s monopoly position

Measures to control position abuse corporate monopoly can be implemented as follows:

• Administrative – economic measures include: controlling the process of establishing, merging and splitting businesses.
• Control business operations and growth through tax policy.
• Regulations on environmental protection, labor safety, human resource development and consumer rights protection.
• Price controls on monopoly goods and services. Enterprises must publicly disclose their pricing methods for State approval. Some goods and services may have ceiling prices set by the State, for example gasoline.
• Nationalize monopoly enterprises, impose State ownership on a number of enterprises in important fields related to national interests and people’s lives.
• Enact laws against unfair competition, control dominant practices and abuse of monopoly in the market.

VI. About Us, Hankuk Law Firm

■ Hankuk Law Firm – Introduction

The goal of the legal services provided by HANKUK LAW FIRM is to support businesses, investors, and people. Our organization employs skilled Korean lawyers, partners, and professionals to provide legal services to businesses related to corporations and litigation.

To support the startup process, our lawyers and staff provide a wide range of services, including business law consulting, tax and immigration law consulting, real estate services, business consulting, marketing and communications, human resources, product distribution, franchise options, etc. We provide expert advice on every aspect of your business needs.

To protect the legitimate rights and interests of our clients and achieve the best results, we provide legal advice and participate in civil lawsuits related to business, labor, marriage, family, and inheritance.

■ Contact us now

For reliable and effective legal advice, please contact HANKUK LAW FIRM now. We are committed to providing you with the best possible answers and our team of experienced lawyers has extensive knowledge in many legal fields. We are always here to provide the most competent and dedicated support, whether you are dealing with contractual issues, commercial disputes or need guidance on foreign investment. HANKUK LAW FIRM is honored to have assisted hundreds of domestic and international clients in skillfully resolving complex legal issues as their trusted legal partner. Do not let legal issues hinder your success. Let us accompany you towards legal achievement and comfort. For prompt guidance and support to ensure your rights are always maintained at the highest standards, contact HANKUK LAW FIRM now.

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