Settling an anti-trust case under the laws of Vietnam

Competition Law (“VCL 2018”) will become effective on 1 July 2019. Until that time, the Competition Law 2004 (“VCL 2004”), which have took effect as of 1 July 2005, are still provided to governs practices in restraint of competition, unfair competitive practices, the order and procedures for resolution of competition cases, and measures for dealing with breaches of the laws on competition.

Anti-trust may fall within the scope of acts that restrain competition. Practices in restraint of competition mean practices of enterprises which reduce, distort or hinder competition in the market. Under the VCL 2004, competition restriction acts includes: (i) Acts of competition restriction agreement; (ii) Abusing the dominant position on the market, abusing the monopoly position and (iii) Economic concentration.

In detail:

(i) Acts of competition restriction agreement : According to Article 8 VCL 2004, agreements in restraint of competition agreements in restraint of competition shall comprise:/ 1. Agreements either directly or indirectly fixing the price of goods and services;/ 2. Agreements to share consumer markets or sources of supply of goods and services;/3. Agreements to restrain or control the quantity or volume of goods and services produced, purchased or sold;/ 4. Agreements to restrain technical or technological developments or to restrain investment;/ 5. Agreements to impose on other enterprises conditions for signing contracts for the purchase and sale of goods and services or to force other enterprises to accept obligations which are not related in a direct way to the subject matter of the contract;/ 6. Agreements which prevent, impede or do not allow other enterprises to participate in the market or to develop business;/ 7. Agreements which exclude from the market other enterprises which are not parties to the agreement;/ 8. Collusion in order for one or more parties to win a tender for supply of goods and services.

(ii) Abusing the dominant position on the market: Per article 11 VCL 2004, Enterprises and groups of enterprises in dominant market position/ 1. An enterprise shall be deemed to be in a dominant market position if such enterprise has a market share of thirty (30) per cent or more in the relevant market or is capable of substantially restraining competition./ 2. A group of enterprises shall be deemed to be in a dominant market position if they act together in order to restrain competition and fall into one of the following categories:/ (a) Two enterprises have a market share of fifty (50) per cent or more in the relevant market;/ (b) Three enterprises have a market share of sixty five (65) per cent or more in the relevant market;/ (c) Four enterprises have a market share of seventy five (75) per cent or more in the relevant market.

Abusing the monopoly position: Under Article 14 VCL 2004, Practices constituting abuse of monopoly position which are prohibited/ Any enterprise in a monopoly position shall be prohibited from carrying out the following practices:/ 1. Practices stipulated in article 13 of this Law;/ 2. Imposing disadvantageous conditions on customers;/ 3. Abuse of monopoly position in order to change or cancel unilaterally a signed contract without legitimate reason.

(iii) Economic concentration: Under Article 16 VCL 2004, Economic concentration/ Economic concentration means conduct of enterprises comprising:/ 1. Merger of enterprises;/ 2. Consolidation of enterprises;/ 3. Acquisition of an enterprise;/ 4. Joint venture between enterprises;/ 5. Other forms of economic concentration as stipulated by law.

The authority responsible for administering and enforcing competition laws is Vietnam Competition Authority (“VCA”), which investigates issues relating to competition restriction acts  and Vietnam Competition Council (“VCC”), which is responsible for the enforcement of the Competition Law in respect of competition restriction acts which have been investigated by the VCA.

However, after 01 July 2019 when the VCL 2018 comes into force, VCA and VCC will be consolidated into a new regulatory body, the National Competition Commission (“NCC“). The NCC will be tasked with assisting the Ministry of Industry and Trade in the administration of competition, organize investigations, handle competition cases, reviewing exemption requests and economic concentrations.

Competition restriction proceedings in Vietnam shall be divided into three main periods:

(i) Initiating the case

According to Vietnamese law, a competition restriction case may be initiated by the VCA after receiving complaints submitted by citizens or enterprises or if a finding of breaches of the competition law is established [Article 86, VCL 204: Article 86. Preliminary investigation: A preliminary investigation of a competition case shall be conducted pursuant to a decision of the head of the administrative body for competition in the following circumstances: 1. After the administrative body for competition has accepted jurisdiction over a complaint file of a competition case; 2. After the administrative body for competition discovers there is an indication of a breach of the provisions of this Law].

The time-limit for lodging a complaint shall be 02 years from the date on which the alleging conduct was carried out. [Article 58, VCL 204: Complaints about competition cases: 2. The time-limit for lodging a complaint shall be two years from the date on which the conduct indicating a breach of this Law was carried out]

A dossier of competition restriction case must contain the following main documents (a) complaint in the form issued by the administrative body for competition; (b) evidence of the offending practice [Article 58.3, VCL 2004: Complaints about competition cases: 3. A complaint file must contain the following main documents:/ (a) Complaint application in the form issued by the administrative body for competition;/(b) Evidence of the offending practice].

Within 07 working days from the date of receipt of a complaint file, the competition authority shall check the completeness and validity of the file documents and then notify the complainant to supplement the file within maximum 45 days [Article 46.1, Decree 116/2005/ND-CP.1. Within seven working days from the date of receipt of a dossier of complaint about a competition case, the competition-managing agency shall check the completeness and legal validity of the dossier. Where a dossier lacks documents stated in Clause 3, Article 58 of the competition Law, the competition-managing agency shall notify such to the complainant for supplementation within 30 days; in special cases, the competition-managing agency may, at the request of the complainant, give one extension of no more than 15 days].

After receipt of a complete and valid file, the VCA shall notify the complainant to make advance payment of fees for resolving the case unless such fee is exempt in certain cases. The VCA shall accept the case only after receiving a receipt for advance payment of such fees [Article 47, Decree 116/2005/ND-CP. Article 47. Acceptance of dossiers of complaint about competition cases/ 1. Upon receiving a complete and valid dossier of complaint about a competition case, the competition-managing agency must immediately notify the complainant of the payment of an advance on expenses for the handling of the case, except for cases of exemption there from as provided for in Article 56 of this Decree./ 2. Within 15 days as from the date of receipt of the notification of the competition-managing agency as stated Clause 1 of this Article, the complainant must pay an advance on expenses for the handling of the competition case./ 3. The competition-managing agency shall accept a dossier of complaint about a competition case only after it receives a receipt of an advance on expenses for the handling of the competition case, except for cases where the complainant is exempt from such payment as provided for in Article 56 of this Decree.].

In terms of burden of proof, the complainant must provide evidence to support their claims. A party opposing that complaint also has the right to provide evidence to support their argument. If the competition authority initiates the case by itself, they have to prove that such acts constitute competition restriction act [Article 74, Decree 116/2005/ND-CP. Article 74. The right and obligation to prove/ 1. The complainant or a person with related interests or obligations that has made an independent request must produce evidence to prove that his/her complaint or request is grounded and lawful./ 2. The party opposing another person complaint or request with respect to itself shall have the right to prove that its opposition is grounded and must produce evidence to prove such./ 3. The competition-managing agency shall have the obligation to prove acts of violation of the law on competition in the case specified in clause 2, Article 65 of the Competition Law.].

(ii) Investigation

After the VCA accepts the case based on the complaints or finds that there are indications of a breach of the competition law, the Director of VCA will issue a decision to initiate a preliminary investigation. The VCA will have maximum 30 days [Article 87.1, VCL 2004: 1. The time-limit for a preliminary investigation shall be thirty (30) days from the date of a decision to conduct a preliminary investigation.]

to do preliminary investigation. After that, the investigators have to make recommendations to the Director of VCA to issue a Decision to conduct an official investigation or to terminate the investigation [Article 87.2, VCL 2004. 2. Within the time-limit stipulated in clause 1 above, the investigator assigned to investigate the case must complete the preliminary investigation and make a recommendation to the head of the administrative body for competition to either issue a decision to conduct an official investigation or to stay the investigation.]

The time-limit for an official investigation shall be 180 days that can be extended if necessary, but not more than two times each of which may not exceed 60 days [ Article 90.2, VCL 2004. 2. The official time-limit for an investigation of an agreement in restraint of competition, an abuse of dominant market position or monopoly position, or a case of economic concentration shall be one hundred and eighty (180) days from the date of the decision to conduct an official investigation. In necessary cases, the head of the administrative body for competition may extend this time-limit, but on not more than two occasions and each extension may not exceed sixty (60) days.] Upon completion of an investigation, the Director of VCA must send an investigation report together with the case file to the VCC [Article 93, VCL 2004. Article 93. Report on investigation/ 1. Upon completion of an investigation, the head of the administrative body for competition must send a report on the investigation together with the whole of the file on the competition case to the Competition Council./ 2. A report on an investigation shall contain the following main particulars:/ (a) Summary of the case;/ (b) Features of the case and the evidence which was verified;/ (c) Suggestions on measures for dealing with the case.]

(iii) Hearing and decision making

Cases related to competition restriction acts (namely, acts of competition restriction agreement, abusing the dominant position on the market, abusing the monopoly position and economic concentration) shall be transferred to the VCC for final decision.

Upon receipt of the investigation report and the complete case file, the chairman of the VCC shall issue a Decision on establishment of a Council to deal with the case (“the Council”).

Within 30 days from the date of receipt of the case file, the Council must issue a decision to (i) conduct a hearing, or (ii) return the file for additional investigation, or (iii) terminate the resolution of the case [Article 99-101, VCL 2004. Article 99. Preparation for conducting investigative hearing/ 1. Upon receipt of the investigation report and the complete file of a competition case forwarded by the head of the administrative body for competition, the chairman of the Competition Council shall issue a decision on establishment of a council to deal with the competition case./ 2. Within a time-limit of thirty (30) days from the date of receipt of the file on the competition case, the council dealing with the competition case must issue one of the following decisions:/ (a) To conduct an investigative hearing;/ (b) To return the file for additional investigation;/ (c) To stay resolution of the competition case./ 3. Within a period of fifteen (15) days from the date of a decision to conduct an investigative hearing, the council dealing with the competition case must open the investigative hearing./ 4. Where the file has been returned for additional investigation, within fifteen (15) days from the date of receipt of the returned file5, the council dealing with the competition case shall issue one of the decisions stipulated in clause 2 of this article.

Article 100. Return of file for additional investigation/ If the council dealing with the competition case considers that the evidence collected is insufficient to determine whether or not there has been a practice in breach of the provisions of this Law, it shall issue a decision returning the file and requesting additional investigation.

Article 101. Stay of resolution of case within authority for resolution of Competition Council/ 1. The council dealing with the competition case shall issue a decision to stay resolution of a case within the authority for resolution of the Competition Council in the following circumstances:/ (a) Where the head of the administrative body for competition proposes a stay of resolution of a case because there is insufficient evidence to prove a practice in breach of the provisions of this Law and the council dealing with the competition case agrees that such proposal is legitimate;/ (b) The parties subject to investigation have terminated voluntarily the practice in breach, remedied the consequences caused, and the complainant has withdrawn voluntarily the complaint;/ (c) Where the investigation of the competition case is carried out in accordance with clause 2 of article 65 of this Law, the parties subject to investigation have terminated voluntarily the practice in breach and remedied the consequences caused, and the head of the administrative body for competition proposes a stay of resolution of the case./ 2. The decision to stay resolution of a competition case shall be sent to the party subject to investigation, the complainant (if any) and the administrative body for competition.]. A hearing shall be conducted in public except for cases concerning national security or business secrets.

The hearing is started with explanations presented by concerning parties, and then continued with the questioning and debating. Upon the conclusion of the debate, the Council members shall discuss to come up with a final decision by majority vote [Article 119-129, Decree 116/2005/ND-CP: Article 119. Hearing of explanations of the complainant, the investigated party, persons with related interests or obligations/ 1. To start the settlement of a competition case, the competition case-handing panel shall hear the explanations of the complainant, the investigated party, persons with related interests or obligations in the following order:/ a. The lawyer of the complainant of the complainant presents the complainant of the complainant and evidence to prove that such complainant is grounded and lawful. The complainant may add his/her opinion;/ b. The lawyer of the investigated party presents the opinion of the investigated party on the complaint of the complainant; the investigated partys proposal and evidence to prove that such proposal is grounded and lawful. The investigated party may add his/her opinions;/ c. The lawyer of the person with related interests or obligations presents the opinion of such person on the complaint of the complainant; opinions and proposal of the investigated party; the independent request and proposal of such person and evidence to prove that such request and proposal are grounded and lawful. The person with related interests or obligations may add his/her opinions./ 2. Where the complainant, the investigated party or a person with related interests or obligations has no lawyer, such complainant, investigated party or person may present by himself/herself his/her complaint, request and/or proposal and evidence to prove that such complaint, request and/or proposal are grounded and lawful./ 3. at the hearing, the complainant, the investigated party and persons with related interests or obligations and their lawyers may add evidence to prove their co plaint, request or proposal./ 4. For a competition case without a complainant and investigated by the competition-managing agency as provided for in clause 2, Article 65 of the Competition Law, the presentations by the persons specified at Point a, Clause 1 of this Article shall be replaced with the investigators report.

Article 120. Order of questioning at a hearing/ After hearing the presentations of the complainant or the report of the investigator in case of investigation by the competition-managing agency as provided for in Clause 2, Article 65 of the Competition Law, of the investigated party and persons with related interests or obligations, questions for each person on each matter shall be raised in the following order:/1. By the president of the hearing./ 2. By other members of the competition case-handling panel./ 3. By lawyers of the parties: the complainant, the investigated party and persons with related and persons with related interests or obligations./4. By other persons participating in the proceedings.

Article 121. Questioning of the complainant, the investigated party and persons with related interests or obligations/ 1. Where there are more than one complainant, the investigated party and person with related interests or obligations, they shall be questioned one after another./ 2. The parties stated in clause 1 of this Article shall be questioned only on matters which have not yet been clearly presented by them and their lawyers, which conflict to one another, conflict to their previous statements, conflict to the presentations of the other parties and their lawyers./ 3. The complainant, the investigated party and persons with related interests or obligations may give their replies or their lawyers may give replies and they add their opinions.

Article 122. Questioning of witnesses./ 1. Where there are more than one witness, they shall be questioned one after another./ 2. Before questioning a witness, the president of the hearing must ask questions, clarifying their relationship with the complainant, the investigated party and persons with related interests or obligations in the competition case./ 3. Where a witness is a minor, the president of the hearing may ask for the assistance of his/her parent, guardian or teacher in questioning such minor./ 4. The president of the hearing shall ask witness to clearly state details of the competition case which they know. After they finish their statements, they shall be questioned only on matters which have not yet been clearly presented by them, which are incomplete or conflict to one another, conflict to their previous statements, conflict to the explanations of other persons participating in the proceedings and their lawyers./5. After giving their statements, witnesses shall stay in the hearing hall and be possibly further questioned./6. In case of necessity to protect the safety of witnesses and their relatives, the competition case-handling panel shall decide not to disclose information on their relatives and prevent persons present in the hearing from seeing such witnesses.

Article 123. Questioning of experts/ 1. The president of the hearing shall request the expert to present his/her conclusions on the expertised matter. When presenting, the expert may give additional explanations on the expertise conclusions and grounds for reaching such expertise conclusions./ 2. Proceeding-participating persons who are present at the hearing may give comments on the expertise conclusions, raise questions concerning unclear or contradictory matters in the expertise conclusions or matters contradictory to other details of the competition case./ 3. Where an expert is not present at the hearing, the president of the hearing shall publicize the expertise conclusions./4. When a proceeding-participating person disagrees with the expertise conclusions publicized at a hearing and request additional expertise or re-expertise, the competition case-handling panel shall consider and make decision to accept or refuse to accept such request; in case of acceptance, the panel shall make decision to postpone the hearing.

Article 124. Termination of the questioning at a hearing/ 1. Before terminating the questioning at a hearing, the president of the hearing shall ask the complainant, the investigated party, persons with related interests or obligations, their lawyers and other proceeding-participating persons if they have any more questions; if there are any questions, the president of the hearing shall consider and make decision to continue the questioning./ 2. If there is no more questions, the president of the hearing shall make decision to move on to the argument session provided for in Article 125 of this Decree.

Article 125. Order of presentation of arguments./ 1. The order of presentation of arguments is as follow:/ a. The lawyer of the complainant makes a presentation. The complainant may add his/her opinion;/ b. The lawyers of the investigated party make a presentation. The investigated party may add his/her opinions;/ c. The lawyer of the person with related interests or obligations makes a presentation. The person with related interests or obligations may add his/her opinions./ 2. Where the complainant, the investigated party or a person with related interests or obligations has no lawyer, he/she may make a presentation./ 3. For a competition case involving no complainant and investigated by the competition-managing agency as provided for in Clause 2, article 65 of the Competition Law, the presentation by the complainants lawyer stated at Point a, Clause 1 of this article shall be replaced by the presentation by an investigator.

Article 126. Presentation of arguments/ 1. When giving their assessment of evidence and expressing their views on the settlement of the competition case, the arguers shall base themselves on the following grounds:/ a. documents and evidence already considered and examined at the hearing;/ b. The results of the questioning at the hearing;/ c. The president of the hearing must not limit the time for argument./ 2. The president of the hearing must not limit the time for argument.

Article 127. Return to questioning/ Through argument, if deeming that a detail of the co petition case has not been examined yet or thoroughly examined or additional evidence shall be examined, the competition case-handling panel shall decide to return to the questioning; after finishing the questioning, it shall resume the argument.

Article 128. The investigated parties final words/ When the arguers have finished their presentations, the president of the hearing shall declare to terminate the argument./ The investigated party shall be allowed to give his/her final words. No question shall be raised when the investigated party gives his/her final words. The competition case-handling panel may request the investigated party not to speak about matters irrelevant to the competition case but must not limit the speaking time of the investigated party./ If, in his/her final words, the investigated party discloses new circumstances of importance to the competition case, the competition case-handling panel shall make decision to return to the questioning.

Article 129. Deliberation before issuing decisions on handling competition cases/ 1. After terminating the argument, the competition case handling panel shall meet behind closed doors to deliberate and issue decisions on handling the competition case./2. During deliberation, members of the competition case-handling panel shall resolve all matters related to the competition case by majority vote. Holders of minority opinions may make written opinions to be filed into the competition case dossiers./ 3. The deliberation provided for in Clause 2 of this Article shall be based only on documents and evidence already considered and examined at the hearing, the results of the questioning at the hearing and comprehensive consideration of the opinions of the proceeding-participating persons./ 4. Opinions given during the deliberation and decisions of the competition case-handling panel on handling the competition case must be recorded I writing, such a record must be signed by all members of the competition case-handling panel before the decision on handling the competition case is publicized./ 5. For a competition case involving complicated circumstances, which requires a long deliberation before issuing s decision on handling the competition case, the competition case-handling panel may make decision on the deliberation time, which, however, must not exceed five working days as from the termination of arguments at the hearing./ The competition-case-handling panel must inform those who are present at the hearing and proceeding-participating persons who are not present at the hearing of the date and hour and place for publicizing the decision on handling the competition case; if the informed proceeding-participating persons are absent, the competition case-handling panel shall still declare the decision according to the provisions of Article 132 of this Decree.].

If the involved parties disagree with a part or the whole of the contents of the competition case-handling decision, they may lodge complaints to Competition Council (as for competition restriction cases). Within 30 days after receiving the complaint dossier, Competition Council shall have to settle the complaint in specially complicated cases, the time limit for settling complaints may be extended for another thirteen days at most.

Sanctions

The main penalties for a violation per the VCL 2004 include: (a) warnings; or (b) monetary fines of up to 10 percent of the enterprise’s total annual revenue.

Additional penalties for a violation per the VCL 2004 Law include: (a) Withdrawal of business registration certificate; revocation of the right to use a licence or practising certificate; (b) Confiscation of exhibits and facilities used to commit the breach of the VCL 2004.

In addition, violators may also be subject to the following remedial measures: (a) restructure of the enterprise that abuses its dominant position; (b) division or split of the enterprise that has merged or consolidated, or compulsory sale back of the acquired enterprise; (c) public rectification; (d) preclusion of terms in violation of the provisions of the Competition Law from the relevant contract or business transactions; and/or (e) other necessary measures in order to remedy the anti-competitive effects caused by the violating act.