On 01 July 2019, Vietnam’s Competition Law No. 23/2018/QH14 (the “New Competition Law” or “new Law”) came into effect, replacing its 14-year-old predecessor and related guiding instruments. The new Law is expected to have a significant impact on how enterprises conduct their day-to-day business. In an attempt to ease the transition, this article will highlight the notable changes introduced by the new Law of which enterprises should be aware.
Drastic Change of Approach
The New Competition Law will introduce changes in several areas such as scope of governance, anti-competitive conduct and economic concentration (e.g., M&A transactions) regulation, as well as introducing for the first time a leniency policy (all of which are further addressed in the full article).
The most drastic change is arguably the shift in the general regulatory approach towards an effect-based mindset. The key issue is no longer whether a given conduct falls within a statutorily prescribed list of prohibited conducts, but whether it has or may have a competition-restraining impact on the market; that is, whether it (potentially) has an impact which removes, reduces, distorts or otherwise hinders market competition. The effect-based approach will require the competition authority to take into account a range of factors other than, as under prior law, the combined market share of the relevant parties when assessing whether an anti-competitive conduct or an M&A transaction should be prohibited.
It is expected that given the new approach, enforcement of competition law will be more vigorous and all business individuals, organisations and any other relevant entities must adhere more strictly to the new Law.
To learn more about the new Law, including analyses of the widened scope of governance, cartel and merger control regimes, leniency programme, abuse of market power, unfair competitive practices, sanctions, transparency and confidentiality, an international cooperation, click here to read the full blogpost by Ally Law member firm LNT & Partners.