On May 15, 2020, Decree no. 35/2020/ND-CP detailing the Competition Law 2018 officially takes effect.
Decree No. 35/2020 /ND-CP was issued to guide the Competition Law 2018, specifically:
- Determination of relevant market and market share;
- Assessment of substantial anticompetitive effects caused or probably caused by anti-competitive agreements;
- Determination of substantial market power;
- Economic concentration;
- Legal proceedings for competition.
Notably, the Decree also stipulates the assessment of economic concentration through enterprise acquisition. An act of controlling or dominating an enterprise or businesses of other enterprises is identified if:
- The acquiring enterprises acquire ownership of over 50% of charter capital or more than 50% of voting shares of acquired enterprises;
- The acquiring enterprise acquires the ownership or right to use more than 50% of the assets in all or one of the businesses of that acquired enterprise.
At the same time, the Decree sets forth that the acquiring enterprise has one of the following rights:
- Appoint, dismiss or remove the majority or all of the members of the board of directors, the chairman of the board of members, director or general director of the acquired enterprise;
- Amend and supplement the charter of the acquired enterprise;
- Deciding important issues in the business operation of the acquired enterprise.
Moreover, the Decree prescribes on barriers to market entry and expansion in the assessment of substantial anticompetitive effects caused by anti-competitive agreements and determination of substantial market power, as follow:
- Legal barriers created by the laws and policies of the state;
- Financial barriers;
- Initial market entry costs which enterprises cannot recover after market withdrawal;
- Consumption habit.
Decree no. 35/2020/ND-CP has detailed comprehensive guidance on the Competition law 2018, thereby, facilitating law enforcement and application. In order to ensure strict compliance with competition law, enterprises may carry out diligent research on Decree no. 35/2020/ND-CP.