Corporate Legal Services

Exclusivity Clauses in Distribution Deals Under Scrutiny: Review

Scenario: When does exclusivity break the law? — the opening question on “Exclusivity Clauses in Distribution Deals Under Scrutiny: Review”, with a reference situation of around 46,250 USD, under the law on 20 October 2026.

1. The current legal basis for EXP-6067

The directly governing framework is Competition Law 23/2018/QH14, Decree 35/2020/ND-CP guiding its implementation and Decree 75/2019/ND-CP on administrative penalties in competition.

Distribution exclusivity is a vertical agreement: under the 2018 Competition Law it is prohibited only where the parties reach the relevant-market share threshold and the agreement causes or may cause a significant anti-competitive effect; territorial exclusivity for a small distributor usually sits outside the prohibited zone.

2. Applying the rules to the concrete situation

Reviewing an exclusivity clause means answering four questions: the combined market share, the exclusivity duration, whether passive sales into other territories are banned, and whether price maintenance or a rival-product ban is attached — exclusivity beyond 5 years plus a passive-sales ban is the most scrutinised combination The least painful fix keeps exclusivity but adds safety valves: shorten the exclusivity term and renew it on sales performance, allow passive sales, separate exclusivity from every pricing clause, and add a termination right where the distributor misses minimum targets two periods running.

The client’s questions on this topic — When does exclusivity break the law?; What market share is safe?; How should the contract be fixed?; How large is the fine? — form a single decision chain: a wrong answer at the first link distorts every later link, so this article keeps the chain’s order and always returns to the file, a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold, to prove its conclusions.

3. Working through the questions companies actually ask

When does exclusivity break the law?

Distribution exclusivity is a vertical agreement: under the 2018 Competition Law it is prohibited only where the parties reach the relevant-market share threshold and the agreement causes or may cause a significant anti-competitive effect; territorial exclusivity for a small distributor usually sits outside the prohibited zone. Applied to the file, a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold shows this conclusion holds against the framework set out above.

What market share is safe?

Reviewing an exclusivity clause means answering four questions: the combined market share, the exclusivity duration, whether passive sales into other territories are banned, and whether price maintenance or a rival-product ban is attached — exclusivity beyond 5 years plus a passive-sales ban is the most scrutinised combination The least painful fix keeps exclusivity but adds safety valves: shorten the exclusivity term and renew it on sales performance, allow passive sales, separate exclusivity from every pricing clause, and add a termination right where the distributor misses minimum targets two periods running. The test of this conclusion sits in a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold and the that framework framework.

How should the contract be fixed?

Reviewing an exclusivity clause means answering four questions: the combined market share, the exclusivity duration, whether passive sales into other territories are banned, and whether price maintenance or a rival-product ban is attached — exclusivity beyond 5 years plus a passive-sales ban is the most scrutinised combination The least painful fix keeps exclusivity but adds safety valves: shorten the exclusivity term and renew it on sales performance, allow passive sales, separate exclusivity from every pricing clause, and add a termination right where the distributor misses minimum targets two periods running. To rely on this conclusion, the company needs a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold matching the framework above.

How large is the fine?

Reviewing an exclusivity clause means answering four questions: the combined market share, the exclusivity duration, whether passive sales into other territories are banned, and whether price maintenance or a rival-product ban is attached — exclusivity beyond 5 years plus a passive-sales ban is the most scrutinised combination The least painful fix keeps exclusivity but adds safety valves: shorten the exclusivity term and renew it on sales performance, allow passive sales, separate exclusivity from every pricing clause, and add a termination right where the distributor misses minimum targets two periods running. The risk on this point falls only when a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold is completed under the framework above.

4. Handling process and the file to prepare

  • Hold the situation up against that framework and record matches and divergences in an internal minute.
  • Assemble a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold into one indexed set with a named owner.
  • Follow the order approved in the minutes exactly, with no retroactive paperwork to legitimise completed acts.
  • Keep the EXP-6067 file as its own set, ready to produce when an authority or partner asks.

5. A worked figure and the action conclusion

Take 46,250 USD as the sample: 5% of it is 2,312 USD. If the classification is wrong, the entire 2,312 USD faces reassessment.

Conclusion: the point to remember on EXP-6067 is: Distribution exclusivity is a vertical agreement: under the 2018 Competition Law it is prohibited only where the parties reach the relevant-market share threshold and the agreement causes or may cause a significant anti-competitive effect; territorial exclusivity for a small distributor usually sits outside the prohibited zone.

Frequently asked questions

1. When does exclusivity break the law?

Distribution exclusivity is a vertical agreement: under the 2018 Competition Law it is prohibited only where the parties reach the relevant-market share threshold and the agreement causes or may cause a significant anti-competitive effect; territorial exclusivity for a small distributor usually sits outside the prohibited zone. The accompanying file for this question alone: a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold.

2. What market share is safe?

Reviewing an exclusivity clause means answering four questions: the combined market share, the exclusivity duration, whether passive sales into other territories are banned, and whether price maintenance or a rival-product ban is attached — exclusivity beyond 5 years plus a passive-sales ban is the most scrutinised combination The least painful fix keeps exclusivity but adds safety valves: shorten the exclusivity term and renew it on sales performance, allow passive sales, separate exclusivity from every pricing clause, and add a termination right where the distributor misses minimum targets two periods running. The accompanying file for this question alone: a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold.

3. How should the contract be fixed?

Distribution exclusivity is a vertical agreement: under the 2018 Competition Law it is prohibited only where the parties reach the relevant-market share threshold and the agreement causes or may cause a significant anti-competitive effect; territorial exclusivity for a small distributor usually sits outside the prohibited zone. The accompanying file for this question alone: a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold.

4. How large is the fine?

Reviewing an exclusivity clause means answering four questions: the combined market share, the exclusivity duration, whether passive sales into other territories are banned, and whether price maintenance or a rival-product ban is attached — exclusivity beyond 5 years plus a passive-sales ban is the most scrutinised combination The least painful fix keeps exclusivity but adds safety valves: shorten the exclusivity term and renew it on sales performance, allow passive sales, separate exclusivity from every pricing clause, and add a termination right where the distributor misses minimum targets two periods running. The accompanying file for this question alone: a contract-review table covering share, duration, passive sales and pricing, an amendment annex to live contracts, and sourced market-share data proving the safe threshold.

This article has been quality-reviewed by the FLAW AI Legal Council