DECREE Detailing a number of articles of the Competition Law Pursuant to the June 19, 2015 Law on Organization of the Government; Pursuant to the June 12, 2018 Competition Law; At the proposal of the Minister of Industry and Trade; The Government promulgates the Decree detailing a number of articles of the Competition Law. Chapter I GENERAL PROVISIONS Article 1. Scope of regulation This Decree details Articles 9, 10, 13, 26, 31, 32, 33, 36, 56 and 82 of the Competition Law. Article 2. Interpretation of terms 1. Controlling and dominating another enterprise or one of its business lines means one of the following cases where: a/ The acquiring enterprise acquires the right to own over 50% of charter capital or over 50% of voting shares of the acquired enterprise; b/ The acquiring enterprise acquires the right to own or use over 50% of assets of the acquired enterprise in all or one of the latter’s business lines; c/ The acquiring enterprise has one of the following rights: - To directly or indirectly decide on appointment, relief from duty or removal from office of majority or all of members of the Board of Directors, the chairperson of the Members’ Council, or the director or director general of the acquired enterprise; - To decide to modify and supplement the charter of the acquired enterprise; - To decide on important matters in business operations of the acquired enterprise, including selection of forms of business organization; selection of business lines, locations and forms; selection and adjustment of business scale and lines; and selection of forms and modes of raising, distribution and use of business capital of the acquired capital. 2. An organizationally and financially associated group of enterprises (below referred to as group of associated enterprises) means a group of enterprises controlled and dominated by one or more than one enterprise in the group or having a common administration section. 3. Market share threshold means a numerical value of market share of an enterprise in the relevant market identified under Article 10 of the Competition Law. For example, an enterprise has a market share of 30 percent (30%) in the relevant market means that its market share threshold is 30. 4. Total of squares of market share thresholds of enterprises in the relevant market shall be calculated by the following formula: Total of squares of market share thresholds = S 1 2 + S 2 2 + … S (n) 2 In which S 1 … S (n) mean market share thresholds of enterprises numbered 1 thru n. For example: In the same relevant market, there are 3 enterprises that have market shares of 30%, 30% and 40%, respectively. Total of squares of market share thresholds of these enterprises in the relevant market shall be 30 2 + 30 2 + 40 2 = 3,400. 5. Market entry and expansion barrier means an element that bars an enterprise from entering a market or expanding its market. Chapter II IDENTIFICATION OF RELEVANT MARKETS AND MARKET SHARES Section 1 IDENTIFICATION OF RELEVANT MARKETS Article 3. Relevant markets 1. A relevant market shall be identified on the basis of a relevant product market and relevant geographical market. 2. In the course of identification of relevant markets, the National Competition Commission may consult line agencies, enterprises, and organizations and individuals that have expert knowledge. Article 4. Identification of relevant product markets 1. Relevant product market means a market of goods or services that are substitutable in terms of characteristics, use purposes and prices. 2. Goods or services are considered substitutable in terms of characteristics if they are identical or similar in one or several of the following elements: a/ Substantial features; b/ Ingredients or composition; c/ Physical or chemical properties; d/ Technical functions; dd/ Side effects on users; e/ Consumability of users; g/ Other particular properties. 3. Goods or services are considered substitutable in terms of use purposes if they have identical main use purposes. 4. Goods or services are considered substitutable in terms of prices if their prices are different by no more than 5% in similar trading conditions. In case of a price difference of over 5%, the National Competition Commission shall identify goods or services that are substitutable in terms of prices based on several elements specified in Clause 5 or by the method provided in Clause 6 of this Article. 5. In case the identification of substitutable properties of goods or services under Clauses 2, 3 and 4 of this Article is not enough to conclude on a relevant product market, the National Competition Commission shall additionally consider one or several of the following elements: a/ A change in demand for a type of goods or services upon a fluctuation in price of another type of goods or service; b/ Expenses and time needed for customers to decide to buy or use another good or service; c/ Use duration of goods or services; d/ Consumption practices; dd/ Regulations that affect substitutability of goods or services; e/ Distinctiveness of buying or selling prices for different groups of customers; g/ Supply substitutability of a certain type of goods or services specified in Article 5 of this Decree. 6. When necessary, the National Competition Commission may identify price substitutability of goods or services by the following method: Goods or services are considered substitutable in terms of prices if at least 35% of a random sample quantity representing 1,000 consumers living in a relevant geographical area decide or intend to buy other goods or services with characteristics or use purposes identical to those of goods or services they are currently using or intend to use in case prices of such goods or services increase by over 10% and remain unchanged for 6 consecutive months. In case the number of consumers living in a relevant geographical area mentioned at this Point is smaller than 1,000, the random sample quantity must represent at least 50% of the total number of consumers in such area. Article 5. Identification of supply substitutability Supply substitutability means capability of enterprises currently producing or trading in a type of goods or services to increase the production output or sales turnover of such goods or service or possibility that other enterprises commence or shift to producing or trading in such goods or service for under 6 months without seeing any considerable increase in costs if the price of such goods or service increases by between 5% and 10%. Article 6. Identification of relevant product markets in special cases 1. A relevant product market in a special case may be identified as a market of a special good or service or a group of special goods or services based on characteristics of such good(s) or service(s), consumption practices or special trading methods, including information technology-based methods. 2. When identifying a relevant product market in the case specified in Clause 1 of this Article, markets of supplementary goods or services for relevant products may be additionally considered. 3. Supplementary products for relevant products mean goods or services to be used to improve utilities or effects or necessary for use of relevant products. Accordingly, when prices of supplementary products increase or decrease, the demand for relevant products is likely to decrease or increase correspondingly. Article 7. Identification of relevant geographical markets 1. Relevant geographical market means a specific geographical area where substitutable goods or services are provided under similar competition conditions and which is significantly different from neighboring geographical areas. 2. Boundaries of a geographical area mentioned in Clause 1 of this Article shall be identified based on the following elements: a/ Geographical areas where business establishments of enterprises distributing relevant products or services are located; b/ Business establishments of other enterprises located in neighboring geographical areas that are close enough to the geographical areas mentioned at Point a of this Clause for their goods and services to participate in competition with relevant products or services; c/ Cost of transportation of goods or provision of services; d/ Time of transportation of goods or provision of services; dd/ Market entry or expansion barriers; e/ Consumption practices; g/ Expenses and time for customers to buy goods or services; 3. A geographical area is considered having similar competition conditions and significantly different from neighboring geographical areas if satisfying one of the following conditions: a/ Transportation cost and time make prices of goods or services increase by no more than 10%; b/ There exists one of market entry or expansion barriers specified in Article 8 of this Decree. Article 8. Market entry or expansion barriers Market entry or expansion barriers include: 1. Legal barriers created by the State’s regulations and policies, including regulations on import duty and quotas; technical regulations; conditions and procedures for goods production and trading or service provision; regulations on use of goods or services; professional standards and other administrative decisions of state management agencies. 2. Financial barriers, including expenses for investment in goods production and trading or service provision, and accessibility to capital, loans and other financial sources of enterprises. 3. Initial expenses for market entry which enterprises cannot recover when withdrawing from markets. 4. Barriers to access to and possession of supply sources and essential infrastructure facilities for production and trading; networks for goods or service distribution and consumption in markets. 5. Consumption practices. 6. Business customs and practices. 7. Barriers related to the exercise of rights by organizations and individuals to intellectual assets, including copyright and related rights, industrial property rights and rights to plant varieties as provided by the law on intellectual property. 8. Other market entry or expansion barriers. Section 2 IDENTIFICATION OF MARKET SHARES Article 9. Principles of identification of market shares of enterprises in relevant markets 1. Market shares of enterprises in relevant markets shall be identified by one of the methods specified in Article 10 of the Competition Law. 2. In the course of identification of market shares, the National Competition Commission may consult line agencies, enterprises, and organizations and individuals that have expert knowledge. Article 10. Identification of market shares of groups of associated enterprises 1. Sales turnover, costs for purchase, and quantity of a type of goods or services sold and purchased of a group of associated enterprises shall be identified as follows: a/ Sales turnover, costs for purchase, and quantity of a type of goods or services sold and purchased for identification of the market share of a group of associated enterprises shall be calculated to be equal to the total of sales turnover, costs for purchase, and quantity of such type of goods or services sold and purchased of all enterprises in the group; b/ Sales turnover, costs for purchase, and quantity of a type of goods or services sold and purchased of a group of associated enterprises exclude sales turnover, costs for purchase, and quantity of goods or services sold and purchased from the sale of goods or provision of services among enterprises in the group. 2. Market shares of enterprises in a group of associated enterprises constitute the market share of such group. Chapter III ASSESSMENT OF SIGNIFICANT COMPETITION RESTRAINING IMPACTS OR POSSIBLE SIGNIFICANT COMPETITION RESTRAINING IMPACTS OF CARTELS Article 11. Contents of assessment of significant competition restraining impacts or possible significant competition restraining impacts of cartels 1. The National Competition Commission shall assess significant competition restraining impacts or possible significant competition restraining impacts of cartels in the cases specified in Clauses 3 and 4, Article 12 of the Competition Law. 2. The assessment of significant competition restraining impacts or possible significant competition restraining impacts of cartels shall be based on one or several of the following elements: a/ Developments and trend of change of market share thresholds of enterprises joining cartels, to be assessed in comparison with other enterprises being competitors not joining cartels; b/ Market entry or expansion barriers, to be assessed to identify competition restraining impacts or possible competition restraining impacts of cartels based on elements affecting decision making by enterprises when entering or expanding markets as specified in Article 8 of this Decree; c/ Restrictions on technology research, development or innovation or restrictions on technology capacity, to be assessed to identify competition restraining impacts or possible competition restraining impacts of cartels on objectives of technology research, development or innovation or improvement of technology capacity in relevant sectors; d/ Reduction of accessibility to or possession of essential infrastructure facilities, to be assessed based on essentiality of infrastructure facilities to production and business operations and costs and time for enterprises being competitors not joining cartels to access or possess such infrastructure facilities or similar infrastructure facilities; dd/ Increase of costs and time of customers in buying goods or services from enterprises joining the cartels or when shifting to buy other relevant goods or services, to be identified through comparing necessary costs and time of customers when buying goods or services of enterprises joining cartels or when shifting to buy goods or services of enterprises being competitors before and after cartels are established; e/ Obstruction to competition in the market through controlling particular elements in sectors related to enterprises joining cartels, to be identified based on dominance of such particular elements over competition activities of enterprises in the market. 3. A cartel is considered exerting no significant competition restraining impacts or unlikely to exert significant competition restraining impacts when: a/ The combined market share of enterprises joining the cartel is smaller than 5%, for cartels among enterprises in the same relevant market; or, b/ The market share of each enterprise joining the cartel is smaller than 15%, for cartels among enterprises engaged in different stages in the same production, distribution or supply chain for a certain type of goods or services. 4. In the course of assessment of competition restraining impacts and possible competition restraining impacts of cartels, the National Competition Commission may consult related agencies, organizations and individuals and request enterprises joining cartels to provide necessary information and documents. Chapter IV IDENTIFICATION OF SIGNIFICANT MARKET POWER Article 12. Contents of identification of significant market power of enterprises and groups of enterprises 1. The National Competition Commission shall identify significant market power of an enterprise or a group of enterprises under Article 26 of the Competition Law based on one or several of the following elements: a/ Shares of enterprises in a relevant market, to be assessed through comparing market shares of enterprises or groups of enterprises in the relevant market; b/ Financial capacity and size of the enterprise or group of enterprises, to be assessed based on financial capacity and accessibility to capital, loans and other financial sources, total capital sources, total assets, number of employees, production scale, and goods or service distribution and sale network of the enterprise or group of enterprises in comparison with other enterprises being competitors; c/ Market entry and expansion barriers to other enterprises, to be assessed based on elements affecting decision making by enterprises upon their market entry or expansion as specified in Article 8 of this Decree; d/ Ability to hold, access and control the market for distribution and sale of goods and services or supply sources of goods and services, to be assessed based on advantages of the enterprise or group of enterprises compared to competitors thanks to its/their holding or control of the network of distribution and sale of goods and services or supply sources of goods and services in the market; dd/ Advantages in technology and technical infrastructure facilities of the enterprise or group of enterprises, to be assessed based on advantages in technology and technical infrastructure facilities owned or used by the enterprise or group of enterprises for production and business compared to its/their competitors; e/ Rights to own, hold and access infrastructure facilities, to be assessed to identify advantages of the enterprise or group of enterprises compared to its/their competitors based on essentiality and accessibility of infrastructure facilities for goods production and service provision; g/ Rights to own and use subject matters of intellectual property rights, to be assessed to identify advantages of the enterprise or group of enterprises compared to its/their competitors based on essentiality and accessibility of subject matters of intellectual property rights of enterprises in goods production and service provision; h/ Possibility to shift to supply or demand sources of other related goods and services, to be identified based on expenses and time necessary for customers and enterprises to shift to buy or sell goods and services of other enterprises in the same relevant market; i/ Particular elements in sectors in which the enterprise or group of enterprises is/are doing business, to be assessed to identify advantages of the enterprise or group of enterprises compared to its/their competitors in specific conditions of such sectors. 2. In the course of identification of significant market power of enterprises or groups of enterprises, the National Competition Commission may consult related agencies, organizations and individuals and request enterprises to provide necessary information and documents. Chapter V ECONOMIC CONCENTRATION Article 13. Notification thresholds of economic concentration 1. An enterprise intending to participate in economic concentration, except those specified in Clause 2 of this Article, shall notify its intention to the National Competition Commission before performing economic concentration under Clause 1, Article 33 of the Competition Law if falling into one of the following cases: a/ Total assets in the Vietnamese market of such enterprise or a group of associated enterprises of which such enterprise is a member reach at least VND 3 trillion in the fiscal year preceding the planned year of economic concentration; b/ Total sales turnover or costs for purchase in the Vietnamese market of such enterprise or a group of associated enterprises of which such enterprise is a member reach(es) at least VND 3 trillion in the fiscal year preceding the planned year of economic concentration; c/ Traded value of economic concentration reaches at least VND 1 trillion; d/ Combined market share of enterprises intending to participate in economic concentration represents at least 20% in a relevant market in the fiscal year preceding the planned year of economic concentration. 2. An enterprise being a credit institution, an insurance enterprise or a securities company intending to participate in economic concentration under Clause 1, Article 33 of the Law on Competition shall notify its intention to the National Competition Commission before performing economic concentration if falling into one of the following cases: a/ Total assets in the Vietnamese market of such insurance enterprise or a group of associated insurance enterpr

Decree 35/2020/ND-CP