Competition in A Toolkit Competition Law in Vietnam A Toolkit

Published by: CUTS Centre for Competition, and Investment & Economic Regulation

Hanoi Resource Centre D-217, Bhaskar Marg, Bani Park, 81, Chua Lang, Dong Da Jaipur 302 016, India, Hanoi, Vietnam Ph: +91.141.228 2821 Ph: +84.4.6411003 Fx: +91.141.228 2485 E-mail: [email protected] E-mail: [email protected], Website: www.cuts-international.org/ Website: www.cuts-ccier.org HRC/index.htm

Researched and written by: Pham, Thi Que Anh (Alice Pham)*

Cover Photo: Courtesy: www.images.com

Citation: Pham, Alice (2007), Competition Law in Vietnam: A Toolkit, CUTS HRC, Hanoi

Printed by: Jaipur Printers P. Ltd., Jaipur 302 001

ISBN 978-81-8257-096-2

© CUTS, 2007 The material in this publication may be reproduced in whole or in part and in any form for education or non-profit uses, without special permission from the copyright holders, provided acknowledgment of the source is made. The publishers would appreciate receiving a copy of any publication, which uses this publication as a source. No use of this publication may be made for resale or other commercial purposes without prior written permission of CUTS.

*Director, Hanoi Resource Centre

#0718 SUGGESTED CONTRIBUTION INR200/US$30/VND200,000 CONTENTS

Foreword ...... i Preface ...... iii Acronyms ...... vii 1. Introduction ...... 1 An Overview of the Competition Law 2004 of Vietnam ...... 2

2. About the Market Economy ...... 5 2.1 Market and Prices – How they Work? ...... 5 2.2 Governments and the Rule of Law vs Free Markets ...... 6

3. Market and Competition ...... 8 3.1 Competition ...... 8 3.2 Relevant Market ...... 9 3.3 Market Share & Structure ...... 11 3.4 Competition Law & Policy ...... 13

4. Restrictive Business Practices ...... 15 4.1 Market Power ...... 15 4.2 Per se or Rule of Reason? ...... 17 4.3 Anticompetitive Agreements ...... 18 4.4 Horizontal Agreements among Competitors ...... 19 4.5 Vertical Agreements in the Distribution/Sale of Products...... 28 4.6 Abuse of Dominant Position ...... 36

5. Enforcement of the Competition Law Against RBPs ...... 45 5.1 Detection of Violations ...... 45 5.2 Obtaining Proof of Violations ...... 48 5.3 Preserving Proof of Violations ...... 51

6. Mergers & Acquisitions ...... 53 6.1 Distinction between M&As ...... 53 6.2 Varieties of M&As ...... 54 6.3 Concerns about M&As...... 54 6.4 Merger Review ...... 55 6.5 Information in Merger Review ...... 56 6.6 Merger Remedies ...... 58 6.7 Joint Ventures ...... 61 7. Unfair Trade Practices: Competition & Consumer Protection ...... 63 7.1 Unfair Trade Practices ...... 64 7.2 Misleading Advertising ...... 66 7.3 Pyramid Schemes ...... 67

8. Cross-Border Issues ...... 70 8.1 Market Power in Global or Export Markets...... 70 8.2 Barriers to Import Competition ...... 72 8.3 Foreign Investment-related Competition Issues ...... 72 8.4 IPRs-related Competition Issues ...... 73 8.5 Dealing with Cross-border Issues under the Vietnamese Competition Law ...... 74

9. Competition Law vs Intellectual Property ...... 77 9.1 IPRs Standards as Competition Regulation ...... 78 9.2 Regulation of the Exercise of IPRs though Competition Law .... 78 9.3 Competition Concerns in Licensing Agreements ...... 79 9.4 IPRs and the Abuse of a Dominant Position ...... 81 9.5 Refusal to Deal ...... 82 9.6 Compulsory Licensing ...... 82 9.7 Parallel Import ...... 83

10. Essential Elements for Success...... 86 10.1 Sequencing the Competition Law Implementation ...... 86 10.2 Building a Healthy Competition Culture ...... 87

11. The Desired Framework for Vietnam ...... 95 11.1 Appropriate Revision of Certain Provisions of the Law ...... 95 11.2 Clear Differentiation between Horizontal and Vertical Competition Restraints ...... 96 11.3 Publication of Reader-friendly Implementation Guidelines ...... 96 11.4 More Comprehensive C