Economic Concentration and Competition Law
Competition law intervenes at two very different moments: when a business carries out an acquisition or merger large enough to trigger economic concentration notification, and when its market conduct is viewed as a competition-restricting agreement, abuse of dominance, or unfair competition. Each industry also has its own sector-specific layer of rules on operating conditions, advertising, pricing, promotions, and consumer protection.
Quick summary: economic concentration notification
| Suited for | Businesses undertaking large-scale M&A, businesses with significant market share, and businesses in conditional industries. |
|---|---|
| Key documents | Financial statements, revenue and asset figures in Vietnam, group structure, and distribution contracts. |
| Checkpoints | Economic concentration notification thresholds, pricing and distribution policies, exclusivity clauses, advertising and promotion content. |
Work scope: competition and economic concentration
- Assessing economic concentration notification obligations before signing M&A, asset purchase, or joint venture deals.
- Preparing and filing economic concentration notifications, working with the competition authority during review.
- Reviewing distribution, agency, and franchise contracts for competition-restricting clause risks.
- Building competition compliance programs and conduct guidance for sales teams.
- Advising on advertising, promotions, product comparisons, and consumer rights protection.
- Supporting businesses facing complaints, investigations, or acting as complainants against unfair competition.
How FLAT LAW FIRM Helps
- Calculating and assessing notification threshold risks at the letter-of-intent stage, before the deal structure is locked.
- Designing deal timelines that account for the competition authority’s review period, avoiding unfeasible closing-date commitments.
- Reviewing territorial exclusivity, resale price maintenance, tying, and discount mechanism clauses.
- Assessing sector-specific business conditions applicable to the business’s products and services.
- Preparing explanatory dossiers and coordinating with competent state agencies.
Common risks
- Signing and closing before fulfilling economic concentration notification obligations.
- Counting only the target’s size while ignoring the whole related group of companies.
- Resale price maintenance clauses inserted into contracts as commercial custom.
- Promotion programs exceeding limits or lacking required notification/registration procedures.
- Comparative advertising directly against competitors or using unprovable information.
- Operating in conditional business lines without meeting conditions throughout operations, not just at licensing.
Documents to prepare
- Financial statements and revenue and total asset figures in the Vietnamese market for all deal parties.
- Group structure chart, list of affiliates, and companies under common control.
- Description of the planned transaction, deal value, and desired timeline.
- Distribution and agency contracts, pricing and discount policies currently applied.
- Advertising materials, promotion content, and existing sector-specific licenses.
Three questions to answer early in a deal
First question: is this transaction an economic concentration under competition law? Not only mergers and consolidations, but also acquisitions gaining control, asset purchases, or joint ventures may fall within scope. What the contract calls the deal does not decide this.
Second question: which scale is measured against the thresholds. Vietnamese law sets notification thresholds on multiple criteria, including total assets in the Vietnamese market, total revenue in the Vietnamese market, deal value, and combined market share. Scale is measured by group of companies, not just the directly participating entity, so a small deal inside a large group may still require notification. Specific thresholds are set by the Government and may be adjusted, so check the instruments in force at the transaction time.
Third question: what are the consequences of getting it wrong. Closing without fulfilling notification obligations can lead to penalties and remediation orders, plus a legal defect the next investor will find in later due diligence. That is why this should be handled at the letter-of-intent stage rather than before signing.
Reference legal framework
Competition matters in Vietnam are governed by the 2018 Competition Law and guiding decrees, including Decree 35/2020/NĐ-CP detailing provisions of the Competition Law. The authority receiving economic concentration notifications and handling competition cases is the National Competition Commission.
Businesses are also governed by consumer rights protection, advertising, commercial laws, and sector-specific regulations. Notification thresholds, penalty levels, and business conditions may be amended, so check the instruments in force before deciding.
The full text of the 2018 Competition Law and Decree 35/2020/NĐ-CP can be found at the Government’s legal normative documents system; information on economic concentration notification procedures is published by the National Competition Commission.
Frequently Asked Questions
Must a transaction between two foreign companies be notified in Vietnam?
Possibly, if the parties have activities, revenue, or assets in the Vietnamese market reaching the thresholds. The signing location is not decisive.
Is buying more shares in an already-owned company an economic concentration?
It depends on whether the additional purchase changes control. If so, the transaction may still be subject to review.
Do small-market-share businesses need to care about competition law?
Yes. Rules on competition-restricting agreements and unfair competition do not depend entirely on market share.
May distribution contracts fix retail prices?
This is sensitive. Resale price maintenance may be viewed as a competition-restricting agreement and should be designed carefully rather than copied from foreign templates.
How long does economic concentration notification take?
The 2018 Competition Law provides 30 days of preliminary review from the date the National Competition Commission receives a complete, valid dossier (Article 36). If official review is required, the period is 90 days from the preliminary review result notice, extendable by no more than 60 days for complex cases (Article 37). In practice, dossier preparation and supplementation at the authority’s request usually take longer than the statutory frame, so deal timelines should be built on cautious assumptions.
Useful Links
Talk to FLAT LAW FIRM
You may send a transaction description, revenue and asset figures in Vietnam, and the expected timeline so our team can assess the next step.
Talk to counsel when:
- an M&A deal is of significant scale and it is unclear whether it exceeds economic concentration notification thresholds;
- distribution or agency contracts contain exclusivity, resale price maintenance, or tying clauses;
- the business is preparing broad promotion programs or comparative advertising;
- the business receives complaints or working requests related to competitive conduct.