4.3 Anti-monopoly provisions in the Competition Law 2004
4.3.4 The state bodies in charge of anti-monopoly matters
Before the adoption of the Law, a Board for Competition Management within the Ministry of Trade was established to participate in the drafting process and to be involved in the handling of cases of trade remedies initiated by foreign trade agencies against Vietnamese exports.231 In early 2004 it was re-organized to be in charge of all issues related to competition and all drafts of the implementation guidelines for the competition law.232 This agency was again built into the Competition Administration Department after the law was passed. The competition authority is named Vietnam‟s Competition
226 See, eg, Tuoitre (Online), „Chi Cam Tap trung Kinh te Khi chiem tren 50 per cent Thi phan‟ [Only Economic Concentration account for over 50 per cent of Market Share is Prohibited]
<http://www.tuoitre.com.vn/Tianyon/Index.aspx?ArticleID=44189&ChannelID=11>; VN Express, „Cam Tap trung Kinh te chiem tren 50 per cent Thi phan‟ [Prohibiting Only Economic Concentration Case account for over 50 per cent of Market Share] < http://vnexpress.net/GL/Kinh-
doanh/2004/03/3B9D07DA/>.
227 VN Express, above n 226.
228 Standing Committee of the National Assembly, above n 90.
229 Competition Law 2004 art 20(1).
230 The two cases are provided in Article 18 are: (i) cases specified in Article 19 or (ii) a case where enterprises, after implementing economic concentration, are still of small or medium size as prescribed by law. In relation to exemptions, a confirmation must be provided in writing of VCAD to inform how the proposed economic concentration may proceed under the Law and whether such proposed economic concentration can proceed without exemption or whether it requires prior exemption. See USVTC, above n 132.
231 OECD, „The Relationship between Competition Authorities and Sectoral Regulators‟, above n 129, 2.
232 USVTC, Catalog Legal Update on Vietnam Trade Regime (2006), 4
<http://www.usvtc.org/updates/legal/Catalog/CatalogSep06.pdf>.
154 Administration Department (VCAD).233 The tasks and powers of VCAD are provided in Article 49(2).234
4.3.4.2 Vietnam Competition Council
The Vietnam Competition Council (VCC) was then established according to Article 53, composed of between eleven and fifteen members appointed or dismissed by the Prime Minister at the proposal of the Trade Minister. The Competition Council shall organize the handling and settlement of complaints about competition cases involving competition restricting acts under the provisions of this Law.235
Conclusion
The Competition Law 2004 has covered all aspects of a standard competition law in regulating both restrictive business practices and unfair trade practices. It sets up a mechanism for the settlement of competition cases as well as the operation of competition authorities. It confirms the role of competition and competition law in the market. It is important to ensure economic efficiency and customer welfare by restricting unnecessary interventions or abuses caused by the state and private sector enterprises in the marketplace. It enables the state to supervise the concentration of economic power and rent-seeking behaviour. It facilitates conditions to entry to the market for all enterprises, strengthening economic democracy and social cohesion through the prevention of anti- competitive practices conducted by dominant firms.236
233 In March 2004, Vietnam Competition Administration Department (VCAD) was established as a statutory body directly under Ministry of Trade of Vietnam, pursuant to the Decree No. 29/2004/ND-CP of the Government on defining the functions, tasks, powers and organisational structure of the Ministry of Trade.
234 The competition administration authority (titled the competition-managing agency in the law) shall have the following powers:
- To control the process of economic concentration according to the provisions of this Law;
- Accepting exemption application dossiers; putting forward opinions to the Trade Minister for decision or submission to the Prime Minister for decision;
- Investigating competition cases related to competition-restricting acts and unfair competition acts;
- Handling and sanctioning unfair competition acts;
- Other tasks prescribed by law.
235 Competition Law 2004 art 53(2).
236 Pham, above n 3, 548; OECD, A Framework, above n 162, 141.
155 It appears that the Law has comprehensively dealt with unfair competition practices.
However, the control of monopoly activities and abuse of dominant and monopoly positions seems not to be as clear and comprehensive as expected. Monopolies and the control of monopolies are closely linked to the definition of the role of the state in the economy and this has a strong impact on how the state intervenes in the economy.237 Hence, anti-monopoly law in Vietnam has become an even greater concern.
237 Thai, Hong and Hoa, above n 8, 140.
156 Chapter 5
FUNDAMENTALS FOR THE APPLICATION OF COMPETITION RULES TO STATE MONOPOLIES
This chapter links the first part of the thesis, focusing on Vietnam‟s specific issues regarding state monopolies, with the second part concerning the application of competition rules to state monopoly behaviour in particular fields. It is structured into 3 sections:
The first section reviews the theoretical underpinning of anti-competitive behaviour of state monopolies under different economics approaches and focuses particularly on the Structure–Conduct–Performance (SCP) paradigm. Then it establishes how the behaviour of state monopolies is explained in the competition context. The second section discusses the fundamental principles that are applied to regulate their market behaviour. It reviews approaches to the application of competition rules to state monopolies and the experiences of selected countries. The last section examines the implications of the application of competition rules to state monopoly behaviour, focusing on the public choice and public interest theories and their influence on the application process.