MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS NEW FEATURES OF 2018 COMPETITION LAW ON ANTI-COMPETITIVE PRACTICES AND ENFORCEMENT SOLUTIONS Specialization: International Trade Policy and Law FULL NAME: Phan Thi Thu Huong Hanoi –2020 MINISTRY OF EDUCATION AND TRAINING FOREIGN TRADE UNIVERSITY MASTER THESIS NEW FEATURES OF 2018 COMPETITION LAW ON ANTI-COMPETITIVE PRACTICES AND ENFORCEMENT SOLUTIONS Major: Economics Specialization: International Trade Policy and Law Code: 8310106 Full name: Phan Thi Thu Huong Supervisor: Assoc. Nguyen Minh Hang Hanoi –2020 STATEMENT OF ORIGINAL AUTHORSHIP I declare that this thesis was composed by myself, that the work contained herein is my own and under the direction and supervision of Assoc. Nguyen Minh Hang, except where explicitly stated otherwise in the text, and that this work has not been submitted for any other degree or processional qualification except as specified. I am fully responsible for the content of this master thesis as well as this declaration.
Hanoi, 25 January 2019 Author Phan Thi Thu Huong ACKNOWLEDGEMENT During the completion of this master thesis, I received the guidance and valuable help from the lecturers, family and friends. With great respect and deep gratitude, I would like to express sincere thanks to: Assoc. Nguyen Minh Hang, Head of the Law Department of Foreign Trade University (FTU) who wholeheartedly helped, supported and encouraged me from the initial to the final level of this dissertation. She provided me with comprehensive guide from choosing the topic, outlining the thesis and editing this research.
Professors and lecturers from FTU as well as World Trade Institute in the Master of International Trade Policy and Law Intake Four, who not only spread profound knowledge and information in the fields of economy and law but also generated strong motivation for me while I was taking this course as well. Last but not least, I would like to express my sincere thanks to my family, my colleagues and my friends, who have always by my side encouraging, supporting, contributing valuable ideas and giving me favourable conditions for me to complete this scientific research. TABLE OF CONTENTS STATEMENT OF ORIGINAL AUTHORSHIP ACKNOWLEDGEMENT. TABLE OF CONTENTS.
LIST OF FIGURES & TABLES. LIST OF ABBREVIATIONS. SUMMARY OF THESIS RESEARCH RESULTS .5 SCOPE OF RESEARCH. 6 CHAPTER 2: THE PRINCIPLE OF COMPETITION AND COMPETITION LAW .1 THE CONCEPT OF COMPETITION .2 FUNDAMENTALS OF COMPETITION LAW .1 INTRODUCTION OF COMPETITION LAW.2 OBJECTIVES OF COMPETITION LAW .3 BENEFITS OF COMPETITION LAW .3 DEFINITION OF ANTI-COMPETITIVE PRACTICES.
17 CHAPTER 3: NEW FEATURES OF 2018 COMPETITION LAW ON ANTI- COMPETITIVE PRACTICES .1 THE EVOLVEMENT OF VIETNAM’S COMPETITION LAW .1 VIETNAM ECONOMY REVIEW PRIOR TO THE INTRODUCTION OF COMPETITION LAW .2 OVERVIEW OF VIETNAM’S COMPETITION LAW .3 PROBLEMS EMERGING FROM THE 2004 COMPETITION LAW IN VIETNAM .2 NEW FEATURES OF 2018 COMPETITION LAW ON ANTI-COMPETITIVE PRACTICES .1 NEW FEATURES ON ANTI-COMPETITIVE AGREEMENTS .2 NEW FEATURES ON ABUSE OF DOMINANT POSITION, ABUSE OF MONOPOLY POSITION .3 NEW FEATURES ON ECONOMIC CONCENTRATION .55 CHAPTER 4: ENFORCEMENT SOLUTIONS AND RECOMMENDATION FOR NEW FEATURES OF 2018 COMPETITION LAW ON ANTI- COMPETITIVE PRACTICES .1 ENFORCEMENT SOLUTIONS FOR NEW FEATURES OF 2018 COMPETITION LAW ON ANTI-COMPETITIVE PRACTICES.1 AIMS AND REQUIREMENTS. 86 LIST OF FIGURES & TABLES FIGURES Figure 3.1: Anti-competitive practices .2: Challenges and shortcomings implementing 2004 competition law .3: Market shares of telecommunications companies in 2011 .4: 2004 versus 2008 exemption review timelines .5: 2004 versus 2018 review timelines .1: Objectives in competition laws of selected east asian and asean countries .1: The economic freedom index of vietnam between 1995 and 2003 .2: 2004 versus 2008 competition law on provisions of the acts .3: 2004 versus 2008 competition law on restrictive agreements .4: 2004 versus 2018 competition law on scope of exemptions .5: 2004 versus 2008 defining dominance .6: 2004 versus 2018 prohibited acts of abuse .7: 2004 versus 2018 criteria for notification .8: 2004 versus 2018 prohibitions against economic concentration .1: Assignment of tasks on implementing competition law. 69 LIST OF ABBREVIATIONS AEC ASEAN Economic Community CPV Communist Party of Vietnam MIC Ministry of Information and Communications MOF Ministry of Finance MOIT Ministry of Industry and Trade MOJ Ministry of Justice NCC National Competition Commission OECD Organization for Economic Cooperation and Development R&D Research and Development SOE State-owned enterprise UNCTAD United Nations Conference on Trade and Development UNDP United Nations Development Programme VASEP Vietnam Association of Seafood Exporters and Producers VCA Vietnam Competition Authority VCC Vietnam Competition Council VCCA Vietnam Competition and Consumer Authority VCCI Vietnam Chamber of Commerce and Industry VIAC Vietnam International Arbitration Center VOV Voice of Viet Nam VTV Viet Nam Television WTO World Trade Organization SUMMARY OF THESIS RESEARCH RESULTS The thesis “New features of 2018 Competition Law on Anti-competitive practices and enforcement solutions” focuses on identifying new features on anti- competitive agreements, abuse of dominant or monopoly position and economic concentration as compared to the 2004 Competition Law. In general, Vietnam enacted the first Competition Law to keep up with the trend of global economy.
In spite of the advantages that Competition Law has initially brought to Vietnam competitive market, it posed some limitations and shortcomings regarding scope of application, approaches to anti-competitive practices and unfair competition and regulatory body structure. Therefore, 2018 Competition Law was enacted to address the issues emerged. It supplemented, removed and introduced new concepts and provisions to correct from the experiences and to match the current situation. The thesis concludes with some enforcement solutions that require the coordination from various parts in the market to make the Competition Law effective.1 Research Rationale The transformation of the mechanism of economic management and international integration requires not only a complete and suitable legislation system for new economic activities, but also a basic knowledge on respective law areas.
The introduction of Competition Law has led to essential demand on equipping knowledge and raising awareness on Competition Law and Policy for people in relevant field. As being a new area of law, it is necessary to study carefully the knowledge of Competition Law and develop it to match the Vietnamese economy. As competition, ownership and freewill are three key elements in the market economy, the law that regulates the competitive activities is an indispensable condition to run that system. Law on Competition, which sets up principle rules for economic activities, has become the standard of the market economy.
If there is no Competition Law, there is no appropriate competition and the market cannot function properly. Besides, the risks of unfair competition acts without legal basis to prevent will damage the important objectives of the economic policy. Competition Law makes businesses aware of competitive behaviours and facilities, thereby building a suitable competitive strategy without violating the law. Understanding the need for this new area of law, on December 3rd 2004, the Competition Law was passed by the National Assembly of the Socialist Republic of Vietnam at its 6th session with the goal of meeting the requirements of regulating economic competition activities in Vietnam.
The promulgation of Competition Law is an important milestone in improving the legal documents, regulating the market economy in a new era of globalization and international economic integration. The improvement of the legal documents reflects the process of standardization and harmonization of Vietnamese law with the laws of developed countries. It is also one of the conditions for Vietnam to join and exercise our commitments in World Trade Organization (WTO). The introduction of the 2004 Competition Law is an important milestone in the process of creating a unified legal system for competitive activities of 1 enterprises in the market.
However, after more than 12 years of implementation, with the changes of the socio-economic context, the trend of international integration, as well as the occurrence of limitations, the 2004 Competition Law needs to be amended and supplemented to enhance performance, to meet the requirements and demands of practice in the new situation. Therefore, in June 2018, Vietnam passed a new Competition Law, replacing the 2004 version. This 2018 Competition Law is to (i) meet the requirements in the trend of economic integration and in accordance with international commitments; (ii) ensure the adaptation to the business environment and (iii) overcome the limitations of the Competition Law 2004. From the above reasons, the topic “New features of 2018 Competition Law on Anti-competitive practices and the enforcement solutions” is selected.
This thesis shall give information about general theory of Competition Law and further analyses the new features of 2018 Competition Law in Vietnam focusing on Anti-competitive practices. Finally, the thesis shall give information about the solutions for its enforcement.2 Literature Review In recent years, a number of researches including books, newspapers and reports have approached the topics related to Competition Law in general and in Vietnam, in particular. However, there are not many studies on 2018 Competition Law as this revised area of law was issued last year. Therefore, previous researches mostly covered 2004 Competition Law or proposed new law.
This section is to review some notable researches. Firstly, some books have focused primarily on the theory of Competition Law and mentioned some practical cases, namely Giao Trinh Phap Luat Canh Tranh by Tang Van Nghia (2013) and Giao Trinh Luat Canh Tranh by Le Danh Vinh, Hoang Xuan Bac and Nguyen Ngoc Son (2010). These books are must-have materials for studies on Competition Law. They provided fundamental concepts on all subjects of Competition Law so that readers can have an overall picture of what it is and how it works nationally and internationally.
Another book written by Massimo Motta (2009) titled Competition Policy: Theory and Practice, however, drew on important issues that were Anti-competitive practices and stated 2 out policy implications demanded for these issues. This book integrated theory and practice from case studies giving a clear and thorough way for anyone who desires to understand competition issues. Other sources such as ASEAN Regional Guidelines on Competition Policy published by ASEAN (2010), Study on Competition Laws for Developing Economies by Asia-Pacific Economic Cooperation (1999) or The Objectives of Competition Law written by Cassey Lee (2015) delivered detailed theory on objectives and benefits of Competition Law as reasons to why it is crucial to introduce this area of law worldwide. While the Guidelines released by ASEAN went on with information about scope of application and role and responsibilities of Competition regulatory body and enforcement powers, the Study done by Asia- Pacific Economic Cooperation discussed how the introduction of Competition Law would affect the world as well as the impact it would have on society and on developing countries with Competition Law in place.
It also illustrated some limits and risks when enacting Competition Law. Apart from some materials, which merely emphasize theories of Competition Law, there are some other papers apply those concepts on international scale and on Vietnam thereof. Competition Law Enforcement of Vietnam and the Necessity of a Transparent Regional Competition Policy by Phan Cong Thanh (2015), discussed the enforcement of Vietnam’s Competition Law and recommended a competition policy to Vietnam’s government and competition authorities. After the Competition Law in Vietnam is put in place, some recent materials approached by illustrating and analysing the problems and argued for a need for a new Competition Law.
Annual Report 2014 by Vietnam Competition Authority (VCA) (2014) provided details of investigation and settlement on competition cases which violated existing Competition Law. Another paper titled OECD Peer Reviews of Competition Law and Policy by OECD (2018) offered overall review of current Competition Law Framework and its existing problems then proposed new Competition Law. 3 As various problems, during enforcement, occurred in 2004 Competition Law, a new version of the law is demanded to promulgate. Several recent publications have then examined new key features of the 2018 Competition Law including scope of application, regulatory bodies restructure, competition restraining agreements, market dominance, economic concentration, and unfair practices.