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Economic concentration is carried out to create market power for enterprises, the market structure changes leading to the number and size of enterprises also change. When falling within the threshold of economic concentration notification as prescribed by law, enterprises need to carry out procedures for notifying state agencies that have better control over enterprises and the market. The following is the order and procedures for implementing the Notice of Economic Concentration in accordance with the provisions of the competition law.
Procedure to carry out Notification of economic concentration under competition law
Dossier of notification of economic concentration
Pursuant to Article 34 Competition Law 2019, the dossier is as follows:
- A notification of economic concentration issued by the National Competition Commission;
- Agreed contents of the economic concentration or draft contracts, memorandum of understanding regarding economic concentration between/among enterprises;
- Valid copies of the business registration certificates of similar documents of all enterprises engaging in economic concentration;
- Financial statements of all enterprises engaging in economic concentration in two consecutive years before the notification year or, in case of newly-established enterprises, from the establishment time to the notification time as per the law;
- The list of parent companies, subsidiaries, associate companies, branches, representative offices and other affiliated entities of every enterprise engaging in economic concentration (if any);
- The list of goods, services dealt in by each enterprise engaging in economic concentration;
- Information about market shares in the sector where economic concentration will take place held by every enterprise engaging in economic concentration in 2 consecutive years before the notification year;
- Proposed remedies for possible anti-competitive effects of the economic concentration;
- Report on assessment of positive effects of economic concentration and measures to enhance the positive effects of economic concentration.
Note:
- Enterprises submitting dossiers for notification of economic concentration shall be responsible for the truthfulness of their dossiers.
- Documents in the application file in a foreign language must be accompanied by a Vietnamese translation.
Procedure to carry out
Step 1: Submit your application
Enterprises participating in economic concentration shall submit dossiers of notification of economic concentration at the National Competition Commission (Ministry of Industry and Trade).
- Within 7 working days from receipt of an exemption application, the National Competitive Commission shall notify the applicant in writing whether the application is complete and valid.
- If the application is incomplete or invalid, the National Competition Commission shall notify the applicant in writing of deficiencies needing amendments and allow them 30 days to make amendments from the date of notice.
Step 2: Preliminary assessment
The receiving agency is responsible for preliminarily assessing the economic concentration within 30 days from the date of receiving the dossier with the following appraisal contents:
- Combined market share of enterprises engaging in the economic concentration on the relevant market;
- The degree of concentration on the relevant market before and after the economic concentration;
- The relationship of the parties engaging in the economic concentration in the production, distribution or supply chain for a certain kind of goods/service or the business lines of the parties engaging in the economic concentration which are inputs of or complementary to one another;At the end of the 30-day time limit, if the receiving agency has not yet issued a notice of preliminary assessment results, the economic concentration will be implemented and the receiving agency must not issue a notice of the economic concentration must officially appraise it.
Step 3: Formal Appraisal
The agency receiving the official appraisal of the economic concentration within 90 days from the date of issuing the notice of preliminary appraisal results is “The economic concentration must be officially appraised”.
For complicated cases, the National Competition Commission may extend the official appraisal for no more than 60 days and notify in writing the enterprise submitting the economic concentration notice.
Matters to be officially assessed in economic concentration:
- Assessment of substantial anti-competitive effects caused or probably caused by economic concentration as prescribed in Article 31 of this Law and remedial measures for anti-competitive effects;
- Assessment of positive effects of economic concentration as and measures to enhance the positive effects of economic concentration;
- Consolidated assessment of anti-competitive effects and positive anti-competitive effects of economic concentration forming the basis for consideration of economic concentration.
Step 4: Announce the result
After finishing the official appraisal of the economic concentration, based on the official appraisal contents, the National Competition Commission shall issue a decision on one of the following contents:
- Economic concentration is carried out;
- Conditional economic concentration: means an economic concentration that is realized but must satisfy one or several of the following conditions:
- Divide, split or resell a part of contributed capital and assets of enterprises participating in the economic concentration;
- Controlling contents related to purchase and sale prices of goods and services or other transaction conditions in contracts of enterprises formed after the economic concentration;
- Other measures to overcome the possibility of the impact of restricting competition in the market;
- Another measure is to enhance the positive impact of economic concentration.
- Economic concentration is prohibited.
(Legal basis: Articles 35 to 42 of the Competition Law 2019; Articles 14, 15, 16 of Decree 35/2020/ND-CP )