VIETNAM Law and Practice Contributed by: Minh Duong, Phong Nguyen and Justin Gisz, Asia Counsel Vietnam Law Company Limited
Official Assessment If the preliminary assessment raises competition concerns, the VCC conducts an official assessment, which involves a more in-depth investigation of the transaction’s impact on the Vietnamese market. The official assessment focuses on the following aspects. • Restraint effect on competition – the VCC assesses whether the transaction is likely to raise barriers to entry or expansion, or to allow the merging parties to engage in anti-competitive practices. • Positive effects of the economic concentration – the VCC also considers the potential positive effects of the transaction, such as economies of scale or increased innovation. • Combined assessment of both restraint and posi - tive effects – the VCC weighs the potential negative and positive effects of the transaction to deter - mine whether it is likely to harm overall consumer welfare. • Applicable conditions to the economic concentra - tion – if the VCC finds that the transaction is likely to harm competition, it may impose conditions on the merging parties to mitigate the harm. These conditions could include requirements to divest assets, to grant access to essential facilities, or to engage in certain types of behaviour. In summary, the Vietnamese merger control regime aims to protect competition and consumer welfare by ensuring that mergers and other economic con - centrations do not lead to significant anti-competi - tive effects. The VCC’s two-step assessment pro - cess helps ensure that transactions are thoroughly reviewed before they are allowed to proceed. 6.3 Remedies and Commitments In addition to the two-step assessment process, the VCC has the authority to issue economic concentra - tion clearance with conditions attached. These con - ditions are designed to address any potential anti- competitive effects of the economic concentration and ensure that overall competition in the market is not harmed. The VCC may impose various conditions, including: • division, separation or divestment – the VCC may require the parties to the concentration to divest or
raises any competition concerns before proceeding with the official assessment. The key criteria for the preliminary assessment include the following. • Verification of participating enterprises and their relationships – the VCC verifies the identities of the parties and the nature of their relationship with each other. This ensures that the transaction is accurately classified and that the relevant market is correctly defined. • Determination of the form of economic concen - tration – the VCC categorises the transaction as a merger, consolidation, acquisition of shares or assets, or joint venture. This helps to identify which specific provisions of the Competition Law apply to the transaction. • Identification of the relevant market – the VCC defines the relevant market for the transaction, which comprises products or services that are considered substitutable from the consumer’s perspective. This is a critical step in assessing the competitive impact of the transaction. • Assessment of the combined market share – the VCC considers the combined market share of the parties to the economic concentration in the rel - evant market, which provides an indication of the potential for the transaction to reduce competition. A reportable economic concentration may proceed after the preliminary assessment if the combined market share in the relevant market of the parties to such economic concentration is: • less than 20%; • 20% or more in the relevant market but the total sum of market share squares in the relevant market post-merger will be less than 1,800; or • 20% or more in the relevant market but the total sum of market share squares in the relevant market post-merger will be above 1,800 and the increase in their total market share squares in the relevant market both before and after the economic con - centration is less than 100.Assessment of the degree of economic concentration – the VCC com - pares the degree of economic concentration in the relevant market before and after the transaction. This helps to determine whether the transaction will lead to an increase in market concentration.
725 CHAMBERS.COM
Powered by FlippingBook