Assessment of substantial anti-competitive effects caused or probably caused by economic concentration is one of the matters of Official assessment of economic concentration (Article 37 of Competition law).

According to the provisions of Article 31 of the Competition Law, The National Competition Commission shall assess substantial anti-competitive effects cause or probably caused by economic concentration based on the following factors:

a) Combined market share of enterprises engaging in the economic concentration on the relevant market;

b) The degree of concentration on the relevant market before and after the economic concentration;

c) 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;

d) Competitive advantage brought about by economic concentration in the relevant market;

dd) The ability of enterprises after the economic concentration for increasing significantly their prices or return on sales;

e) The ability of enterprises after the economic concentration for removing or preventing other enterprises from market entry or expansion;

g) Particular factors in the sectors and domains where enterprises are engaging in economic concentration.

According to the provisions of Article 15 of Decree 35/2020, Subject matters of the assessment of anti-competitive effects or likelihood of causing significant anti-competitive effects of economic concentration regimes

1. Joint market share of enterprises participating in the economic concentration program in the relevant market before and after economic concentration.

2.   Level of concentration in the relevant market before and after the economic concentration which is assessed for the purpose of determining the threat of creating or reinforcing the market power of an enterprise, the ability to increase coordination and collusion among enterprises in the relevant market.

3.d) Relationship between enterprises participating in the economic concentration program in the same chain of production, distribution and supply of a certain product or service, or business sectors or industries of enterprises engaging in the economic concentration program that are providing input or supporting products or services for each other. This shall be assessed for the purpose of proving that, after completion of the economic concentration program, participating enterprises will have capabilities of creating more competitive advantages than their competitors in order to impede or rule out market entry competition.

4. Competitive advantages brought about by enterprises’ economic concentration in the relevant market. This shall be overall assessed by considering advantages in terms of their product characteristics, chains of production and distribution, financial capacity, brands, technologies, intellectual property rights and other advantages of these enterprises after economic concentration in the context of relationship with their competitors in the relevant market, which leads to the threat of creating or reinforcing the significant market power of enterprises incorporated after economic concentration.

5. Likelihood of appreciation or increase in the profit margin of an enterprise after economic concentration. This shall be evaluated based on one or some of the following factors:

a) Projected changes on the demand side which shall be assessed in anticipation of the fact that, after completion of the economic concentration program, the participating enterprise may appreciate and change their production or conditions for transaction of their products and services in the relevant market;

b) Projected changes on the supply side of enterprises which shall be assessed in anticipation of the fact that, after completion of the economic concentration program, their competitors in the relevant market may appreciate and change their production or conditions for transaction of their products and services;

c) Projected changes in prices, production output and conditions for transaction of suppliers of products or services that are input factors of enterprises participating in the economic concentration program;

d) Competitor’s conditions for and threats from increases in cooperation or agreement between them for the purpose of elevating their selling prices or profit margins;

dd) Other factors causing effects on likelihood of appreciation or increase in the profit margin of an enterprise after economic concentration.

6. Likelihood of a post-economic concentration enterprise’s elimination of or impediment to other enterprises’ entry into or expansion of their market. This shall be determined based on one or some of the following factors:

a) Degree of control of production and business input factors before and after the economic concentration;

b) Intra-sector or industry competitive characteristics and competitive behaviors of enterprises participating in the economic concentration program during the period before economic concentration;

c) Barriers to market entry and expansion stated in Article 8 herein;

d) Other factors that lead to the likelihood of a post-economic concentration enterprise’s elimination of or impediment to other enterprises’ entry into or expansion of their market.

7. Specific factors in the sectors or industries that enterprises engaging in the economic concentration program may take into consideration if those factors directly affect or significantly change the results of the evaluation of anti-competitive effects of the economic concentration regime prescribed in regulations of this Article.

Above is our consultancy about this issue. If you need more detailed advice and answers as well as how to access this service, please contact directly the Deputy Director of Sales: Lawyer Nguyen Duc Trong via hotline: 0912.35.65.75, 0912.35.53.53 or call the free legal consultation hotline 1900.6575 or send a service request via email: info@hongbanglawfirm.com hoặc lienheluathongbang@gmail.com

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