Threshold for notification of economic concentration under the law of vietnam and lessons from international experience

BẠCH NGỌC VÂN

MINISTRY OF EDUCATION AND TRAINING
HO CHI MINH CITY UNIVERSITY OF LAW
***
MANAGING CENTER OF SPECIAL
AND INTERNATIONAL PROGRAMS

BẠCH NGỌC VÂN
BACHELOR THESIS

THRESHOLD FOR
NOTIFICATION OF ECONOMIC
CONCENTRATION UNDER THE
LAW OF VIETNAM AND
LESSONS FROM
INTERNATIONAL EXPERIENCE
BACHELOR THESIS
Faculty: Commercial Law
School year: 2016 - 2021

YEAR 2021
HO CHI MINH CITY
YEAR 2021


MINISTRY OF EDUCATION AND TRAINING
HO CHI MINH CITY UNIVERSITY OF LAW
***
MANAGING CENTER OF SPECIAL
AND INTERNATIONAL PROGRAMS

BẠCH NGỌC VÂN

THRESHOLD FOR
NOTIFICATION OF ECONOMIC
CONCENTRATION UNDER THE
LAW OF VIETNAM AND
LESSONS FROM
INTERNATIONAL EXPERIENCE
BACHELOR THESIS
Faculty: Commercial Law
School year: 2016 - 2021

Supervisor: LLM Nguyen Thi Phuong Ha
Student: Bach Ngoc Van
Student ID: 1651101030163
Class: 74-CLCQTL4

HO CHI MINH CITY
YEAR 2021


DECLARATION
I declare that this thesis is the result of my research, which is implemented under the supervision of
LL.M Nguyen Thi Phuong Ha, ensures honesty, and complies with rules and regarding quotation, the note of
references. Therefore, I hereby take full responsibility for this declaration.


LIST OF ABBREVIATIONS
Decree 35/2020/ND-CP Decree 35/2020/NĐ-CP detailing and guiding the

implementation of a number of articles of the
Competition law 2018
EC

European Commission

EU

European Union

GDP

Gross Domestic Product

ICC

International Chamber of Commerce

ICN

International Competition Network

ICLG

International Comparative Legal Guides

LOC 2004

Law on Competition 2004

LOC 2018

Law on Competition 2018

M&A

Mergers and Acquisitions

MOIT

Ministry of Industry and Trade

NCC

National Competition Commission

OECD
UK

Organization for Economic Cooperation and
Development
The United Kingdom

US

The US United States

UNCTAD
VCA

United Nations Conference on Trade and
Development
Vietnam Competition Authority

VCCA

Vietnam Competition and Consumer Authority


TABLE OF CONTENTS
INTRODUCTION ...................................................................................................... 1
1. Problem statement............................................................................................... 1
2. Literature review ................................................................................................. 3
3. Purpose of the study ............................................................................................ 5
4. Objectives and Scope of the study ...................................................................... 6
4.1. Objectives of the study .................................................................................... 6
4.2. Scope of the study ........................................................................................... 6
5. Research methodologies ...................................................................................... 6
6. Thesis structure ................................................................................................... 7
CHAPTER 1. THRESHOLD FOR NOTIFICATION OF ECONOMIC
CONCENTRATION UNDER VIETNAMESE LAW .............................................. 8
1.1 Theoretical issues relating to economic concentration .................................... 8
1.1.1. Definition and nature of economic concentration ......................................... 8
1.1.2. Definition and meaning of notification threshold for economic
concentration .......................................................................................................
1.2. Threshold for notification of economic concentration under the Law on

13

Competition 2018 ..................................................................................................

1.2.1. Regulations on notification thresholds under the Law on Competition

15

2018.....................................................................................................................
1.2.2. The limitations of notification threshold regulations under the Law on

15

Competition 2018 ................................................................................................ 22
CONCLUSION OF CHAPTER 1............................................................................ 28
CHAPTER 2. ECONOMIC CONCENTRATION NOTIFICATION
THRESHOLD UNDER THE SELECTED LEGISLATIONS AND
RECOMMENDATIONS FOR VIETNAM............................................................. 29
2.1. Threshold for notification of economic concentration under the law of
other countries ....................................................................................................... 29
2.1.1. Periodical adjustment of notification threshold ........................................... 29
2.1.2. Control of transactions implemented outside the territory but having
impacts on the domestic market ........................................................................... 32
2.1.3. Combining criteria to determine notification threshold ............................... 33
2.1.4. Abolition of market share as a criterion for notification threshold .............. 36
2.2. Recommendations for Vietnam ..................................................................... 38
CONCLUSION OF CHAPTER 2............................................................................ 40
THESIS CONCLUSION..........................................................................................

41


INTRODUCTION
1. Problem statement

In the trend of globalization and economic integration, the wave of mergers
and acquisitions (M&A) in developed and developing countries is rising rapidly. In
the United Kingdom (the UK), between 1986 and 1989, approximately 5,200
industrial and commercial companies implemented M&A. 1 M&A activities in the
United States (the US) initiated in the early 20th century following with a prompt
expansion in the 1980s.2 In Vietnam, since the Law on Enterprise 1999 came into
effect, corresponding M&A activities have been concerned and become active in
recent years with immense growth in both quantity and value. 3 From 2009-2011,
there were around 750 M&A deals in Vietnam with an estimated total trading value
of 6.89 billion USD. Between 2012 and 2014, the total value of M&A cases
increased significantly up to 11.13 billion USD. 4 The Institute of Mergers,
Acquisitions, and Alliances (IMAA) statistics recorded that in 2015, Vietnam
executed 341 M&A cases with the total value up to 5.2 billion USD, followed by
more than 611 M&A deals accounted for 5.8 billion USD in 2016. 5 The market size
in 2017 increased nine times compared to 2008. In 2017 alone, the total value of
M&A in Vietnam reached 10.2 billion USD, the highest level recorded, and 175%
growth compared to 2016.6 Following the Vietnam M&A Forum research team, in
the past ten years, there have been nearly 4,000 deals, with a total value of about
48.8 billion USD.
Economic concentration transactions, especially M&A, have accelerated
enormously all over the world. Economic concentration is a form of capital
accumulation that contributes to growing enterprises’ value. In the open economy,
1Nguyen Thuong Lang, Nguyen Thi Quynh Nhu, “Một số vấn đề về sáp nhập, mua lại doanh nghiệp và tình
hình Việt Nam” (Some issues on mergers and acquisitions and the situation in Vietnam),
/>D283199.doc, Accessed on 25 March 2021
2Nguyen Thuong Lang, Nguyen Thi Quynh Nhu, supra note 1, p.1
3 Nguyen Thi Viet Nga (2019), “Triển vọng hoạt động mua bán và sáp nhập doanh nghiệp tại Việt Nam”
(Prospects of mergers and acquisitions in Vietnam), Financial Journal, , Accessed
on 25 March 2021
4 Vietnam Competition and Consumer Authority (VCCA) (2015), Tổng quan về tập trung kinh tế (Overview

of Economic concentration), Competition and Consumer News, No. (54)/2015,
Accessed on 25 March 2021
5Nguyen Hong Hiep (2018), “Thực trạng hoạt động mua bán, sáp nhập doanh nghiệp tại Việt Nam” (Actual
situation of mergers and acquisitions in Vietnam), Business and Finance Journal, p.85
6 Hien Minh (2018), “M&A tại Việt Nam vượt mốc 10 tỷ USD” (M&A in Vietnam surpasses 10 billion
USD), Government electronic newspaper of the Socialist Republic of Vietnam, Accessed on 25 March 2021

1


business reorganization under affiliate forms helps businesses deal with fierce
competition. This constitutes to establish highly competitive enterprises and
improve the competing capability of an economic branch. 7 In general, economic
concentration activities enhance the existing financial and operation power of one
company by hunting synergy gains.8 For instance, merging two companies’
cooperation into one big enterprise can enlarge their business scale, boost
competition ability, cut down on costs, and optimize financial capacity. However,
“as the economic concentration is a reality more and more well-defined in the
context of economic development, it increases the dimensions of the companies and
sets up the prerequisites premise for an abuse of dominant position on the market,
what is strongly against competition rules.”9 Therefore, it is necessary to develop a
solid and reasonable legal framework to assess and control the economic
concentration transactions which seriously affect the competition landscape. More
than 146 jurisdictions in the world currently have certain forms of economic
concentration control regime under their antitrust laws.10 One of the practical tools
for economic concentration control is a notification system. Without exception, the
Vietnamese competition law adopts a mandatory ex-ante notification system. 11
On 12 June 2018, the Vietnamese Government issued the new Law on
Competition 2018 (hereinafter referred to as LOC 2018), which replaced the old
version of Law on Competition 2004 (hereinafter referred to as LOC 2004), and

took effect on 1 July 2019. The LOC 2018 has brought new regulations that are
more suitable and applicable in Vietnam’s current competition environment, thereby
improving the old LOC 2004’s limitations, especially those related to economic
concentration12 and notification threshold. However, the new regulations on the
notification threshold in the LOC 2018 remain certain drawbacks that may cause
several challenges, especially in terms of applicability. Such deficiencies are
associated with not only competent authorities but also enterprises.
Firstly, in the context of developing countries like Vietnam, the new law
7 Ha Thi Thanh Binh (2019), “Thông báo tập trung kinh tế trong pháp luật cạnh tranh” (Economic
concentration notification under competition law), Vietnamese Journal of Legal Sciences, No.01(122)/2019
8 Hoang Le Uyen Phuong (2020), Evaluation of the criteria for effective economic concentration control
under the Competition Law 2018 of Vietnam and recommendation for improvement, Bachelor thesis, HCMC
University of Law, p.1
9 Berinde Mihai (2008), “Economic concentration in the context of the world economy globalization”,
Annals of the University of Oradea: Economic Science, Vol 1(207)/2008, p. 203
10
Daniel Sokol & William Blumenthal (2012), “Merger Control: Key International Norms and
Differences”,
International Research Handbook on Competition Law, Ariel Ezrachi, p.1
11
Hoang Le Uyen Phuong (2020), supra note 8, p.27
12Organization for Economic Cooperation and Development (OECD) (2018), “OECD Peer Reviews of
Competition Law and Policy: Viet Nam”, Accessed on 25 March 2021, p. 11

2


setting up several factors for economic concentration control can put lots of
pressure on the National Competition Commission (known as Vietnam’s principal
competition authority and hereinafter referred to as NCC) because there will be a

growing number of economic concentration cases that must be notified to the NCC.
However, the NCC was yet to be formally established. In other words, the
Vietnamese competition authority is considered “immature” and lacking experience.
Therefore, it is necessary to assess whether all the economic concentration
notification threshold criteria are applicable enough. Otherwise, the
unreasonableness is a potential burden on NCC and might negatively affect
economic development.
Secondly, in the current era of globalization, countries are making an effort to
control economic concentration cases implemented in foreign countries but have an
adverse impact on domestic competition. Hence, the criteria defining thresholds to
notify economic concentration cases need to ensure these transactions are
appropriately controlled.13 Yet, the regulations under the LOC 2018 do not control
such economic concentration cases executed overseas but having an adverse impact
on Vietnam’s market effectively.
Thus, this thesis with the topic “Threshold for notification of economic
concentration under the law of Vietnam and lessons from international
experience” aims to analyze the current Vietnamese regulations on notification
threshold and provide recommendations based on foreign countries’ experiences.
2. Literature review
As the LOC 2018 came into effect, many studies on the economic
concentration control regime have been recorded. However, the challenges and
limitations of the new regulations on the economic concentration notification
threshold have not been profoundly researched.
Ha Thi Thanh Binh (2019), “Thông báo tập trung kinh tế trong pháp luật
cạnh tranh” (Economic concentration notification under competition law),
Vietnamese Journal of Legal Sciences, No.01(122)/2019: The article focuses on the
importance of economic concentration notification in competition law and the
regulations of Vietnam. The author then expands researching other selected
countries on notification threshold and criteria to determine the anti-competitive
effects of economic concentration undertakings, thereby proposing some

recommendations for Vietnam’s legislation. However, this article was written based
on the Draft of the LOC 2018, and at that time, the Decree 35/2020/ND-CP was yet
13

See Ha Thi Thanh Binh (2019), supra note 7

3


to be issued.
Hoang Le Uyen Phuong (2020), Evaluation of the criteria for effective
economic concentration control under the competition law 2018 of Vietnam and
recommendations for improvement, Bachelor thesis, Ho Chi Minh City University
of Law: The thesis has a broad scope of study by evaluating the criteria for effective
economic concentration control, which comprises notification threshold, assessment
of substantial anti-competitive effects caused or potentially caused, assessment of
positive effects, preliminary assessment, and official assessment. By evaluating such
criteria, some recommendations for controlling economic concentration efficiently
were indicated. Thus, the thesis has not in-depth focused on notification threshold
and challenges in terms of applicability for both NCC and enterprises.
Le Van Thang (2020), “Pháp luật cạnh tranh Việt Nam về kiểm soát tập
trung kinh tế đối với hoạt động M&A trong giai đoạn hiện nay” (Vietnam’s Law on
Competition regarding economic concentration control for M&A activities in the
current period), Master Thesis, Ha Noi University of Law: This thesis analyzes and
compares the situation of M&A in Vietnam and the application of the LOC 2018 to
assess the regulations under the LOC 2018. Thereby the author provides general
recommendations based on the analysis to complete the economic concentration
control system. This thesis focuses on the actual situation and law applicability;
therefore, the notification threshold has not been in-depth researched.
Tran Linh Huan (2019), “Những điểm mới trong các quy đinh của luật cạnh

tranh năm 2018 về kiểm soát tập trung kinh tế” (New points in the provisions
regulating economic concentration control under the Law on Competition 2018),
State and Law Journal, No. 5(373)/2019: In this article, the author focuses on
analyzing, assessing, and commenting on some breakthroughs on the provisions of
the LOC 2018 by comparing with the provisions of the LOC 2004 to enlighten the
vitality of amendment. The author Tran Linh Huan appreciates the progressive
changes in Vietnam’s Competition Law. However, the study has not yet been deeply
researched on the notification threshold for economic concentration, the
application’s challenges, and the remaining shortcomings.
Hoang Minh Chien (2019), “Kiểm soát tập trung kinh tế theo Luật Cạnh
tranh năm 2018”, (Economic concentration control under the Law on Competition
2018), Journal of Democracy and Law, No. 3(324)/2019: This paper focuses on
analyzing identifying signs of economic concentration, which are (i) Economic
concentration subjects are enterprises operating independently in the market, (ii)
Economic concentration forms are consolidation, merger, acquisition or joint

4


venture between enterprises, (iii) The consequences of economic concentration lead
to the formation of more substantial businesses and changes in market structure as
well as correlation. In addition, the author points out some new provisions in the
LOC 2018, which overcome some limitations of the LOC 2004 and gain experience
of advanced countries’ legal control over economic concentration. Hence, the
notification threshold has not been researched in this paper.
Mai Nguyen Dung (2020), “Áp dụng chỉ số HHI trong pháp luật về tập trung
kinh tế tại Hoa Kỳ, Liên minh châu Âu – Một số đề xuất cho pháp luật canh tranh
Việt Nam” (Applying the HHI index to economic concentration regulations based
on the United States and European Union experiences and recommendations for
Vietnam’s competition law), State and Law Journal, No. 04/2020: The author Mai

Nguyen Dung provides an overview of the HHI index, analyzes the calculation
formulas, advantages and drawbacks of the HHI measure. The paper introduces the
relevant legislation concerning this index in the US and the EU, thereby proposing
some suggestions to improve the Vietnamese Competition Law relating to the HHI
index in evaluating economic concentration. However, this research is written
mainly based on the Draft of the LOC 2018, and at the time, the Decree
35/2020/ND-CP has not been issued.
This thesis will attempt to address the issues that have been left unsolved,
covered, or discussed from the previous studies.
3. Purpose of the study
This thesis aims to analyze the Vietnamese regulations on economic
concentration notification threshold under the LOC 2018 to point out noticeable
limitations of the current framework, thereby providing recommendations for
improvement based on the experience of the selected foreign countries.
To accomplish the above purpose, this thesis performs the following tasks:
First, analyze the ongoing Vietnamese regulations on notification threshold
to acknowledge the achievements of the LOC 2018, and draw out the inadequacies
as well as the challenges that the LOC 2018 and the Decree 35/2020/ND-CP 14 have
not addressed.
Second, analyze the selected foreign countries’ regulations on economic
concentration control regimes to find the solutions for the challenges and
inadequacies posed by the Vietnamese regulations.

14

Decree No. 35/2020/ND-CP detailing and guiding the implementation of a number of articles of the
Competition law 2018 (Decree 35/2020/ND-CP)

5

Third, offer problem-solving recommendations based on the experiences
learned from other legislations’ competition law regarding notification thresholds.
4. Objectives and Scope of the study
4.1. Objectives of the study

The regulations and provisions relating to the economic concentration
notification threshold under the LOC 2004, the LOC 2018, and the Decree
35/2020/ND-CP.
The regulations and provisions relating to economic concentration
notification threshold under the competition law of Canada, the US, the European
Union (EU), China, Turkey, Belgium, and Brazil.
4.2. Scope of the study
The thesis studies on the notification threshold for economic concentration
regulated in Vietnamese LOC 2018 and the Decree 35/2020/ND-CP as the existing
structure. Other related specialized laws will not be under the scope of this thesis.
Also, this thesis concentrates on researching foreign countries’ legislations on
economic concentration notification threshold, including Merger Regulation
No.139/2004 of the European Commission (EC); Competition Act of Canada; AntiMonopoly Law of the People’s Republic of China; Clayton Act, as added by the
Hart-Scott-Rodino Antitrust Improvement Act of the US; Code of Economic Law of
Belgium; Communiqué concerning the mergers and acquisitions calling for the
authorization of the Competition Board (Communiqué No: 2010/4) of Turkey;
Competition Act of Brazil.
In terms of this study’s limitation, this thesis will concentrate on the
notification threshold for economic concentration, the importance, the purpose of
notification threshold, the breakthroughs of the LOC 2018 on notification threshold
followed with the remaining drawbacks. Thus, this thesis will not discuss any issues
relating to the assessment of substantial anti-competitive effects caused or
potentially caused, assessment of positive effects, preliminary assessment, official
assessment, procedure, national competition authority, sanctions, and leniency

policy.
5. Research methodologies
Throughout the thesis, the author will utilize three main research methods:
analytical, comparative, and synthetic. These three research methods are determined
not to be set to isolation but in interweavement.
The analytical method is conducted primarily in Chapter 1 to record the
6


achievement of new regulations of the LOC 2018 on notification threshold and
point out the feasible limitations that could cause a burden on competent authorities
and economic development. However, the analytical method is also applied in
Chapter 2 for analyzing other countries’ legislations.
The comparative method is implemented for comparing the LOC 2004 and
the LOC 2018 (in Chapter 1), thereby emphasizing the significance and necessity of
the amendment included in the LOC 2018 to the matter of economic concentration
notification threshold. In Chapter 2, the comparative method is essential to be
applied in comparing the competition legislation of Vietnam and other countries to
propose recommendations.
The synthetic method is used to synthesize analyses and comparisons,
thereby clarifying problems to be solved from a legal perspective and offering
recommendations.
6. Thesis structure
This thesis comprises two chapters as follows:
Chapter 1. Threshold for notification of economic concentration under
Vietnamese law
Chapter 2. Economic concentration notification threshold under the
selected legislations and recommendations for Vietnam

7

CHAPTER 1. THRESHOLD FOR NOTIFICATION OF ECONOMIC
CONCENTRATION UNDER VIETNAMESE LAW
This chapter will introduce the notification threshold of economic
concentration under the Vietnamese Law by first clarifying the theoretical issues
relating to economic concentration and notification threshold. Subsequently, this
chapter will analyze the regulations on notification threshold under the LOC 2018
of Vietnam, thereby acknowledge the achievement and point out the limitations
under this framework.
1.1 Theoretical issues relating to economic concentration
1.1.1. Definition and nature of economic concentration
The concept of economic concentration is approached and defined by several
legal researchers and economists worldwide. According to the OECD Glossary of
15

Industrial Organization Economics and Competition Law, concentration “refers to the
extent to which a small number of firms or enterprises account for a large proportion of
economic activity such as total sales, assets or employment.” There are at least four
16

distinct concepts embodied within this term: (i) Aggregate concentration , (ii) Industry
or Market Concentration,
concentration.

19

17

(iii) Buyer concentration,

18

and (iv) Ownership

In the field of economics and legal science in Vietnam, the concept of
20

economic concentration is considered industry or market concentration. However, in
the book “A Framework for the Design and Implementation of Competition Law and
Policy”

21

issued by the OECD, a specific

15
Organization for Economic Cooperation and
Development (OECD) (1993), “Glossary of Industrial Organization Economics and Competition Law”,
Accessed on 21 April 2021
16
Aggregate concentration which measures the relative position of big companies in the economy. This
measure has economists, sociologists and political scientists mainly in the context of theories relating to
actual (and potential) economic-political power which big business may be able to exercise because of their
economic importance in a country/industrial sector/geographic region.
17
Industry or Market Concentration (also often referred to as seller concentration) which measures the
relative position of large enterprises in the provision of specific goods or services such as automobiles or
mortgage loans.
18

Buyer Concentration which measures the extent to which a large percentage of a given product is
purchased by relatively few buyers
19
Ownership Concentration which measures the extent to which shares of stock exchange listed
companies are widely or narrowly (closely) held. This concept is often extended to describe the wealth or
control of corporate assets among individual families or business entities.
20
Pham Tri Hung and Ha Ngoc Anh (2014), “Bản chất của tập trung kinh tế và kiểm soát tập trung
kinh tế”
(The nature of economic concentration and the control of economic concentration), Vietnamese Journal of
Legal Sciences, No. 05(84)/2014, p.20
21 OECD (1999), “A Framework for the Design and Implementation of Competition Law and Policy”,
/>cy.htm, Accessed on 22 May 2021

8


chapter22 refers to economic concentration under the name Mergers. According to
the chapter Mergers, companies can combine in several ways. One enterprise might
purchase from another enterprise all or part of its outstanding securities, all or part
of its operating assets. Alternatively, two enterprises can exchange securities to
establish one enterprise. “Such transactions may be the result of an agreement
between two firms, or the takeover may be unsolicited, unexpected, or even
“hostile”- that is, resisted by the target company. Established practice has been label
“any transaction in which two independent actors are combined into one” a merger,
resulting in the strengthening of one actor and elimination of the other.” 23 This
chapter demonstrates that the common approach to economic concentration is
through the activities of mergers and acquisitions that are associated with the
concept of centralized market power.
The Model Law on Competition of United Nations Conference on Trade and

Development (UNCTAD)24 does not introduce a specific definition of economic
concentration. Still, it utilizes the term “mergers and acquisitions,” which “are an
integral part of economic activities today. From an economic perspective, different
types of mergers can be distinguished according to their motivation”. This document
also states that the terms “concentration” and “merger” can be used interchangeably.
The term “concentration” can be used to (i) describe the acquisition of control over
another undertaking through merger and acquisition activity or otherwise, or (ii)
describe the number of players in a given market (the concentration is at a high level
when there are few players in the market the concentration is at a low level when
there are numerous market players). In comparison, the term “merger” is
approached from two legal perspectives, namely corporate law and competition law.
In corporate law, the term “merger” is generally defined as a fusion between two or
more independent enterprises, whereby the existence of one or more disappears and
the result is one single enterprise. In competition law, this term is more broadly
utilized than in corporate law. The term can comprise an acquisition or takeover, a
joint venture, or even other acquisitions of control.25
According to the author Kovalkova M.V in his Ph.D. thesis, economic
concentration is implemented through reorganization procedures or contracts for the
22
OECD (1999), supra note 21, p.41-68.
23
OECD (1999), supra note 21, p.41
24
United Nations Conference on Trade and Development (UNCTAD) (2018), “Model Law on
Competition: Revised chapter VI”,
, Accessed 25 April 2021.
25
UNCTAD (2018), supra note 24

9

process of concentrating physical resources and management to consolidate the
economic position of the existing business entities, which may have an impact on
the business activities of other entities or the relevant market. 26
The term “economic concentration” or “merger” under the legislation of
other countries is also variably defined and approached. For example:
The Merger Regulation No.139/2004 of the EC issued on 20 January 2004
defines that “a concentration shall be deemed to arise where a change of control on
a lasting basis results from: (i) the merger of two or more previously independent
undertakings or parts of undertaking, or (ii) the acquisition, by one or more persons
already controlling at least one undertaking, or by one or more undertakings,
whether by the purchase of securities or assets, by contract or by any other means,
of direct or indirect control of the whole or parts of one or more other
undertakings.27
The Competition Act of Canada Article 91 does not use the term “economic
concentration” but the term “merger” to demonstrate “the acquisition or
establishment, direct or indirect, by one or more persons, whether by purchase or
lease of shares or assets, by amalgamation or by combination or otherwise, of
control over or significant interest in the whole or a part of a business of a
competitor, supplier, customer or another person.”28
The Anti-Monopoly Law of the People’s Republic of China does not give a
specific definition of concentration but provides a list of situations where the
concentration of undertakings means (i) merger of undertakings; (ii) control over
other undertakings gained by undertaking through acquiring their shares or assets;
and (iii) control over other undertakings or the ability capable of exerting a decisive
influence on the same gained by an undertaking through signing contracts or other
means.29
Similar to the Anti-Monopoly Law of the People’s Republic of China, the
LOC 2018 of Vietnam does not provide such specific definition but provides a list

of operations which can be considered as economic concentration. According to the
LOC 2018, economic concentration includes the following categories:30
26
Ковалькова М.В. (2005), as cited in Pham Tri Hung and Ha Ngoc Anh (2014), supra note 20,
p.20-21.
27 Article 3, Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations

between undertakings (the EC Merger Regulation), />uri=CELEX%3A32004R0139, Accessed on 25 April 2021
28
Article 91, Canada Competition Act, Accessed
on 26 April 2021
29 Article 20, Anti-Monopoly Law of the People’s Republic of China (2007),
,
Accessed on 26 April 2021
30
Article 30, the LOC 2018

10


Merger of enterprises means an act whereby one or several enterprises
transfer all its/their property, rights, obligations, and legitimate interests to another
enterprise, and at the same time terminate the existence of the merged enterprises.
Consolidation of enterprises means an act whereby two or more enterprises
transfer all of their property, rights, obligations, and legitimate interests to form a
new enterprise and, at the same time, terminate the existence of the consolidating
enterprises.
Acquisition of enterprises means an act whereby an enterprise acquires the
whole or part of property or shares of another enterprise sufficient to control or
dominate all or one of the trades of the acquired enterprise.

Joint venture between enterprises means an act whereby two or more
enterprises jointly contribute part of their property, rights, obligations, and
legitimate interests to establishing a new enterprise.
Apart from the categories mentioned above of economic concentration, the
LOC 2018 also leaves open the possibility of other forms of economic
concentration prescribed by law.
This listing has clarified the forms of economic concentration. In practice,
the economic concentration can be performed by acquiring or dominating other
businesses through the activities of the stock market, the capital market. Thus, it is
not coincidental that enterprises or securities law regulates the issue of limiting the
percentage of capital contribution to a business or the rate of ownership that each
investor can acquire. So other forms of investment in companies, to a certain extent,
can be considered as another form of economic concentration. 31
To summarize, economists define economic concentration via M&A
activities of businesses, while some scientific researchers prefer the term “mergers”.
In some countries, there has not been a concrete definition, but discrepant
circumstances were listed relating to the concentration of undertakings. Despite
various approaches of defining, economic concentration could be considered as
enterprises’ activities, which may restrict or distort competition. Such activities are
business tools in order to overcome the market’s fierce competition and enable firms
to strengthen their market power, expand the scope of business, and develop new
product lines. The result of economic concentration is the formation and change in
the market structure.

31
Hanoi Law University (2006), Commercial Law Curriculum, Publisher. People’s Police, Ha Noi,
p.372 (as cited in Ha Ngoc Anh (2018), Pháp luật kiểm soát tập trung kinh tế ở Việt Nam (Legislation on
economic concentration control in Vietnam), Ph.D. thesis, Ho Chi Minh City University of Law, p.52)

11

From the above statement, there are several ways to approach and define the
term “concentration” or “merger”. Despite different perspectives and opinions under
various legislations, the nature of economic concentration can be described as
follows:
First, the subjects of economic concentration are the enterprises operating in the
market. The enterprises participating in economic concentration can be operating in the
32

same or not the same relevant market. However, depending on the legislation of each
country, there are certain requirements. For example, the LOC 2018 regulates that the
scope of enterprises includes organizations and individuals doing business activities
33

(hereinafter referred to as enterprises). However, it does not mean that not all
enterprises can participate in economic concentration. The limit on subjects
participating in economic concentration depends on the provisions of Law on
Enterprises.

34

For example, joint-stock companies, limited liability companies, and

partnerships are subjects of a merger or a consolidation.

35

Second, the typical forms of economic concentration include merger,
consolidation, acquisition, and joint venture between businesses. Enterprises can

accumulate capital to gain considerable market power but this process takes a long
period of time to obtain. Whereas the economic concentration, which also
demonstrates signs of accumulation, is not the result gained from business activities
but from business behaviors.36 This sign helps legal science to distinguish economic
concentration from capital accumulation in economics.37
Third, the result of economic concentration is the formation of a company
with a higher competitive capacity and enormous market power, or the association
into groups of businesses and economic groups, which leads to the change in market
structure and existing competitive correlation in the market. 38 Particularly, mergers
and consolidations will change the market structure by reducing the number of
existing enterprises. Acquisitions or joint ventures will form the connection between
independent companies under the ownership model to create a group-style
32
p.14

VCCA (2009), Economic concentration report in Vietnam: Current situation and forecast, Ha Noi,

33Article 2.1, the LOC 2018

34
Ministry of Industry and Trade (MOIT) (2018), Báo cáo kinh nghiệm quốc tế: Kinh nghiệm quốc
tế về các quy định kiểm soát tập trung kinh tế để xây dựng hướng dẫn chi tiết thi hành các quy định về tập
trung kinh tế trong luật cạnh tranh 2018 của Việt Nam (International experience report: International
experience on economic concentration control regulations to develop detailed guidance on the
implementation of provisions on economic concentration in the competition law 2018 of Vietnam),
ttp://st.aus4reform.org.vn/staticFile/Subject/2019/01/08/kinh-nghiem-quoc-te-ve-kiem-soat-tap-trung-kinhte_81540499.pdf, Accessed 27 April 2021
35
Article 199 and Article 200, Law on Enterprises 2020
36
Hoang Le Uyen Phuong (2020), supra note 8, p.11

37
VCCA (2009), supra note 32, p.15
38
Le Vu Quynh Trang (2014), Hoàn thiện pháp luật Việt Nam về kiểm soát tập trung kinh tế (Completing
Vietnam’s law on economic concentration control), Master Thesis, Hanoi Law University, p.7

12


business. Whether the concentration is implemented through the model of
accumulation or linking business competency will ultimately change the
competitive landscape in the market. Because at this time, the market suddenly
appears enterprises or groups of enterprises with tremendous business potential
without going through the capital accumulation process. As a result, the position of
the remaining enterprises will decrease.39
1.1.2. Definition and meaning of notification threshold for economic
concentration
One of the fundamental pillars of a competition system is the control of
economic concentration, together with the antitrust rules, which prohibit collusive
agreements and abuses of dominant position companies. 40 Since it is difficult and
complicated to determine the effects of concentration on the market’s competition, a
control policy is an essential and costly mission of the legal system in every country.
In order for the competition authorities to improve the economic concentration
operation assessment, it is vital to set up a notification system for such business
operations. “There are many existing designs; some are voluntary and others
mandatory, while some are a priori (based on a prospective analysis) and others,
fewer in number, are ex-post. There are also mixed regimes.”41
According to the Model Law on Competition of UNCTAD, the notification is
a “must” when the mergers, takeovers, joint ventures, or other acquisitions of
control, including interlocking directorships, whether it’s a horizontal, vertical, or

conglomerate nature meet the following criteria: (i) At least one of the enterprises is
set up within the nation, (ii) The resultant market share in the country, or any
substantial part in the nation, referring to any service or product, is likely to create
market power, especially in the high degree of market concentration industries,
where the entry barriers are high and lack substitutes.42
In terms of the threshold for notification of economic concentration, the
thresholds are utilized “to determine the scope of economic concentration control as
they identify transactions with economic significance that could potentially harm
competition.”43. On this issue, the competition control regimes need to be designed
39

Economics and Law University (2010), Competition Law Curriculum, Publisher. Ho Chi Minh city
National University, p.150
40
UNCTAD (2017), “Challenges in the design of a merger control regime for young and small
competition authorities”, Accessed on 27
April 2021
41
UNCTAD (2017), supra note 40, p.6
42
UNCTAD (2018), supra note 24, p.2
43 World Bank (2018), “Merger control: Policy guidance to strengthen the Indonesian competition
framework”, Accessed on 30 April 2021

13


to accurately identify several factors such as the applicable timeframe and the
practical measurement tool, which could be assets, sales, turnover, the geographic
scope to which the measurement tool is to be applied, for instance, national or

worldwide.44
In summary, the threshold for notification of an economic concentration is
the threshold at which enterprises participating in an economic concentration must
notify the national competition authority if their transactions reach or exceed the
threshold. Notification thresholds are often set by national competition authorities
based on the socio-economic situation of each country. In practice, there are several
categories of notification threshold: some are voluntary and others mandatory, while
some are a priori and others are ex-post, and there are also mixed regimes.
The notifications bring concentration to the national competition authorities’
attention and facilitate the economic concentration control enforcement. The
obligations to notify economic concentration transactions differ across the law on
competition regimes. These variations fall into three broad categories: (i) mandatory
ex-ante regimes that mandate notification before the implementation of a
transaction, (ii) mandatory ex-post regimes that permit parties taking part in a
transaction to notify the competent authority after the completion of an economic
concentration transaction, (iii) voluntary regimes that let the concerned parties
decide whether to notify or not. 45 Most countries have set up a mandatory ex ante
notification threshold.46 And Vietnam also has adopted this approach to control
economic concentration transactions.
The roles of setting up threshold for notification of economic concentration
are:
First, the notification threshold’s primary purpose is “to identify the most
anti-competitive effects, to have the possibility to correct problems and to allocate
resources efficiently.”47 However, unlike the market power abuses and anticompetitive agreements that are ex-post investigates, the concentration notification
threshold provides competition authorities chances to assess before any economic
concentration cases re-implemented. Thus, it helps the competent jurisdiction
prevent any ex-ante potential damage to the consumers and the market. 48
44
International Competition Network (ICN) (2017), “ICN Recommended Practices for Merger
Notification and Review Procedures”, />content/uploads/2018/09/MWG_NPRecPractices2018.pdf, Accessed on 30 April 2021

45
UNCTAD (2018), supra note 24, p.7
46
World Bank (2018), supra note 43
47
UNCTAD (2017), supra note 40, p.9
48MS Gal and EM Fox (2014), “Drafting competition law for developing jurisdictions: Learning from
experience”, New York University Law and Economics Working Paper No. 374

14


Second, the notification threshold helps to eliminate the economic
concentration cases that do not cause anti-competitive effects on the market, thereby
reducing procedural and transaction costs for the enterprises and cutting down on
resources. Setting the level of the notification threshold is crucial to wellfunctioning economic concentration control systems. If the competent authority sets
the notification thresholds too high, there is a number of anti-competitive
transactions evading economic concentration control scrutiny. But if the thresholds
are set too low, there might be an excessive number of notifications, which would
impose unnecessary costs on parties involving in economic concentration
transactions and the authorities.49
Third, the notification threshold helps to create a fair market, especially for
small and medium enterprises. But for the regulations on notification threshold,
large enterprises might conduct economic concentration in order to gain a dominant
position in the market, thereby raising higher entry barriers to eliminate small and
medium competitors. In other words, setting up the threshold for economic
concentration notification facilitates competition and protect consumers.
To conclude, the ultimate objective in setting notification thresholds is to
minimize the number of economic concentration notifications that raise no
competition concerns while simultaneously capturing the maximum number of

economic concentration cases that raise competition concerns. 50 Hence, it is
necessary to establish the notification threshold to be coherent, accessible and based
on objectively quantifiable criteria to allow enterprises to determine whether
economic concentration transactions must be notified.
1.2. Threshold for notification of economic concentration under the Law
on Competition 2018
1.2.1. Regulations on notification thresholds under the Law on
Competition 2018
On 1 July 2019, the LOC 2018 came into effect and replaced its 14-year-old
predecessor (the LOC 2004) as well as the related guiding instruments (Decree No.
116/2015/ND-CP). Unlike the LOC 2004, combined market share is no longer the
solely applicable notification threshold under the LOC 2018. Instead, the LOC 2018
has added the criteria for determining the notification threshold: total assets, total
49

OECD (2016), “Local Nexus and Jurisdictional Thresholds in Merger Control”,
/>nguage=En, Working Party No.3 on Cooperation and Enforcement, p.7
50
Gavin Roberts (2014), “Merger Control Procedure and Enforcement: An International
Comparison”, , European Competition Journal, No. (10)/2014, p.523-524.

15


turnover, transaction value, and combined market share. 51 In detail, the guiding
decree for the LOC 2018 (hereinafter referred to the Decree 35/2020/ND-CP)
introduces two sets of jurisdictional thresholds: (i) the threshold applicable to
transactions in virtually all sectors, and (ii) the other reserved for transactions
relating to insurance, securities, and credit.52
Contemplated economic concentration transactions, except for ones in the

fields of insurance, banking, or securities, must be notified to the competent
authorities if any of the following thresholds are met:53
(i) Total asset available in the Vietnamese market of a company or a group of
affiliated companies of which the company is an affiliate must be worth VND 3,000
billion or more in the fiscal year preceding the planned year of economic
concentration;
(ii) Total sales or purchase volume arising in the Vietnamese market of a
company or a group of affiliated companies of which the company is an affiliate
must be worth VND 3,000 billion or more in the fiscal year preceding the planned
year of economic concentration;
(iii) Value of all economic concentration transactions must be worth at least
VND 1,000 billion;
(iv) The joint market share of the enterprises intending to participate in the
economic concentration program must account for at least 20% of total share of the
relevant market in the fiscal year preceding the planned year of economic
concentration.
It is noted that in case economic concentration regimes are conducted outside
of Vietnam’s territory, only the third threshold (i.e. transaction value) can be
disregarded.54
Regarding sector-specific thresholds, contemplated transactions, including
credit institutions, insurance companies, and securities, have significant
discrepancies compared with general thresholds. Accordingly, the economic
concentration transactions, which are conducted by these certain entities must be
notified if they cross any of the following thresholds:55

51

Article 33.2, the LOC 2018

52Article 13, Decree 35/2020/ND-CP

53Article 13.1, Decree 35/2020/ND-CP
54Article 13.3, Decree 35/2020/ND-CP
55Article 13.2, Decree 35/2020/ND-CP

16


Criteria

Threshold value
Insurance
enterprises

Securities
enterprises

Credit institutions

Total assets of
either undertaking
in the transaction
or
group
of
affiliated
undertakings to
which it belongs

VND 15,000 billion or more in
the fiscal year preceding the

plannedyear
of
economic
concentration

at least 20% of total
asset of the
entire
system
of
credit
institutions
in
the
Vietnamese market in
the fiscal year preceding
the
planned year
of
economic concentration

Total
sales
or
purchase turnover of
either
undertaking
in the transaction or
group of affiliated
undertakings

to
which it belongs

VND
10,000
billion or more
in the
fiscal
year preceding
the
planned
year
of
economic
concentration

at least 20% of total
sales earned in the entire
system
of
credit
institutions in the fiscal
year
preceding
the
planned
year
of
economic concentration

VND
3,000
billion or more
in the fiscal year
preceding
the
planned year of
economic
concentration

Transaction value of at least VND 3,000 billion
the economic
concentration
transactions

at least 20% of total
charter capital in
the
entire system of credit
institutions calculated in
the fiscal year preceding
the
planned year
of
economic concentration

Combined
market at least 20% of the total share of the relevant market in the
share
on

the fiscal year preceding the planned year of economic
relevant market of concentration.
the parties to the
transaction in the
fiscal year before
the year of filing

17


In addition, there are other relevant regulations for economic concentration in
specific sectors. For example, the Law on Insurance Business 2000 (amended in
2010), Law on Credit Institutions 2010, and Telecommunications Law 2009
comprise certain regulations on economic concentration transactions in the sectors,
namely insurance, telecommunications, as well as finance, respectively. These
provisions do not override the economic concentration control regime under the
LOC but rather exist in tandem with the latter. In particular, regarding insurance
services, the Law on Insurance Business regulates that it is the requirement to obtain
written approval from the Ministry of Finance when an insurer: (i) transfers shares
of contributed capital amounting to at least 10% of its charter capital; (ii)
restructures by way of merger, division, consolidation, dissolution or conversion of
legal form or (iii) makes an offshore investment. 56 Similarly, in terms of financial
services, the Law on Credit Institutions states that when a credit institution is
restructured via division, demerger, consolidation, merger, acquisition, or
conversion of legal form, the State Bank of Vietnam’s written approval is required. 57
The regulations on notification thresholds are one of the important ways to
control economic concentration effectively. Threshold for notification of economic
concentration could help to prevent consumer harm from anti-competitive
transactions what likely would reduce competition among rival firms and/or
foreclose competitors.

In comparison with the LOC 2004, the new LOC 2018 has demonstrated a
potent combination between economic and legal mindsets. The LOC 2018 has
addressed some limitations of its predecessor, especially in economic concentration
control. Among various amendments and additions, the LOC 2018 renewed the
approach and control of economic concentration behaviors. This new approach is
the result of applying many methods of economic analysis following the worldwide
trend. Therefore, it has made an outstanding contribution to building a healthy and
sustainable business environment.58 Generally, the new provisions regarding the
notification thresholds under the LOC 2018 are considered in line with the
international practices as well as developed countries’ economic concentration

56

Art.69.1.e, 69.1.h, the Law on Insurance Business 2000 (as amended)

57Art.153.1, the Law on Credit Institutions 2010 (as amended)
58
Tran Linh Huan (2019), “Những điểm mới trong các quy định của luật cạnh tranh năm 2018 về kiểm
soát tập trung kinh tế” (New points in the provisions regulating economic concentration control under the Law on

Competition 2018), State and Law Journal, No. 5(373)/2019

18


control regimes. According to the OECD, 59 the main categories of criteria identified
are (i) sales or turnover, (ii) market shares, (iii) assets, and (iv) transaction value. 60
Here are what the LOC 2018 has addressed by adding more criteria to determine
notification thresholds:
First, the LOC 2018 has changed the criteria for determining economic

concentration notification threshold from relying only on market share to applying
multiple criteria to determine whether an economic concentration transaction must
be notified. It is clear to see that considering market share as the only criterion to
determine the notification thresholds has proven several limitations. The main
reason for these deficiencies is that determining relevant market and market share is
not necessary and straightforward at the first step of implementing control
procedures61 because in fact, enterprises cannot obtain the total turnover or total
assets of their competitors to estimate the market share. Even for developed
countries, where the information storage systems are most advanced, it still would
be burdensome and time-consuming for competition authorities to determine market
share and relevant market.
Second, the LOC 2018 has also addressed the omission of vertical and mixed
economic concentration behaviors. Even though it is not obviously regulated, by
determining notification thresholds based only on market share, the LOC 2004 only
regulated horizontal economic concentration62 because combined market share can
only be calculated on horizontal transactions. 63 Meanwhile, vertical64 and
conglomerate economic concentrations are less likely to limit competition than
horizontal ones, but these economic concentration types still need to be adjusted by
law due to potential risks to the competitive environment, such as pressuring other
businesses to control the sources of goods or output of competitors. The importance
of controlling these types of economic concentration becomes more and more
urgent as vertical and conglomerate economic concentration transactions are
59
OECD (2010), “Policy Roundtables – Competition, Concentration and Stability in the Banking
Sector”, Accessed on 25 May 2021.
60
OECD (2010), supra note 59, p.2
61
Ha Thi Thanh Binh (2019), supra note 7, p.28
62

Horizontal economic concentration: economic concentration between firms that produce and sell
the same products, i.e., between competing firms. Horizontal economic concentration, if significant in size,
can reduce competition in a market and is often reviewed by competition authorities. Horizontal economic
concentration can be viewed as horizontal integration of firms in a market or across markets.
63
Nguyen Xuan Nam (2014), Kiểm soát tập trung kinh tế theo luật cạnh tranh Việt Nam – Một số
vấn đề lý luận và thực tiễn (Controlling economic concentration under Vietnamese competition law – Some
theoretical and practical issues), Master thesis, Hanoi Law University, p.50
64Vertical economic concentration: economic concentration between firms operating at different stages of
production, e.g., from raw materials to finished products to distribution. An example would be a steel
manufacturer merging with an iron ore producer. Vertical economic concentration usually increases economic
efficiency, although it may sometimes have an anticompetitive effect

19


increasing in practice.65 For instance, Company ICP is a company with a significant
market share in the men’s health care products market which has taken control of
Thuan Phat corporation, an enterprise that has a position in the market of producing
fish sauce and spices.66 It is obvious that after taking control of Thuan Phat
Corporation, ICP Corporation can enter a new market and expand their business
lines of fish sauce and spices, thereby strengthening its position in the market.
Third, the LOC 2004’s regulation on market share threshold shows the
rigidity. Because not only did it prohibit acts that exceeded unnecessary thresholds,
but it also omitted acts that had not exceeded the threshold but capable of limiting
competition in practice.67 There are cases where the economic concentration
exceeds the threshold but does not create a significant anti-competitive effect in the
market. On the contrary, although not exceeding the threshold, there are numerous
cases that can cause anti-competitive effects. In some markets, only dominating
10% - 20% of market share is enough to give businesses absolute power in the

market, especially for decentralized markets with the remarkable discrepancy in
market shares between top-ranked and mid-ranked corporates. 68 By adding more
criteria to determine notification threshold, the LOC 2018 has reflected the nature
and objective of economic concentration control more accurately, which is to
prevent anti-competitive cases but still able to promote positive effects. Besides, it
would be easier for competent authorities to identify cases with negative impacts.
Fourth, depending solely on market share to determine notification
thresholds of economic concentration may cause difficulties for businesses in
justifying their share in the relevant market. In fact, enterprises can only
acknowledge and take responsibility for their revenues without being obliged to
know the sales of their competitors (the basis for calculating the market share of
enterprises). Requiring corporations to collect a massive amount of information
related to the market and its share may put pressure on enterprises to carry out
procedures for notification or consultation with Vietnam Competition Authority
(VCA). This partly explains why several economic concentration cases have
occurred with only a few reported to VCA. 69 According to a survey by the VCA,
out of 500 businesses surveyed, up to 388 (77.6%) enterprises said that they could
65
Le Vu Quynh Trang (2014), supra note 38, p.46
66MOIT (2012), Báo cáo tập trung kinh tế Việt Nam 2012 (Vietnam Economic Concentration Report in
2012), Ha Noi, p.20
67
Tran Linh Huan, supra note 58, p.62
68
Tran Thi Thu Phuong (2014), “Một số vấn đề về kiểm soát tập trung kinh tế của pháp luật Việt
Nam và kinh nghiệm chung từ một số quốc gia” (Some issues of economic concentration control of
Vietnamese law and common experiences from some countries), State and Law Journal, No. 04(312)/2014
69
MOIT (2012), supra note 66, p.50

20