ANTI COMPETITIVE AGREEMENTS OR ABUSE OF DOMINANCE IN THE DIGITAL ECONOMY

MINISTRY OF EDUCATION AND TRAINING
FOREIGN TRADE UNIVERSITY

DISSERTATION

ANTI-COMPETITIVE AGREEMENTS OR
ABUSE OF DOMINANCE IN THE DIGITAL
ECONOMY

Major: International Trade Policy and Law

Full name: Le Phuong Nam
SUPERVISOR: Prof. Dr. Tang Van Nghia

Ha Noi – 2019
i


DECLARATION

I hereby declare that this master thesis is the scientific research of my own
which made on the basis of theoretical studies and under the direction and
supervision of Prof. Dr. Tang Van Nghia. The research contents and results of this
thesis is completely honest. These data and documents for the analysis, review
and evaluation were collected from various sources which are fully listed in the
reference list.

I am fully responsible for the content of this master thesis as well as this
declaration.

Hanoi, 31 December 2018

Author

Le Phuong Nam

ii


CONTENTS

CONTENTS .............................................................................................................iii
ACKNOWLEDGEMENT ..................................................................................... vii
LIST OF ABBREVIATIONS...............................................................................viii
LIST OF FIGURES ................................................................................................ ix
LIST OF BOXES..................................................................................................... ix
ABSTRACT .............................................................................................................. x
CHAPTER 1: INTRODUCTION ........................................................................... 1
1.1. Research rationale ..................................................................................... 1
1.2. Literature review ........................................................................................ 2
1.3. Research objectives .................................................................................... 5
1.4. Research questions ..................................................................................... 5
1.5. Scope of research ....................................................................................... 5
1.6. Research methodology ............................................................................... 6
1.7. Thesis outline ............................................................................................. 6
CHAPTER 2: THE PRINCIPLE OF ANTI-COMPETITIVE
AGREEMENTS, ABUSE OF DOMINANCE AND THE DIGITAL
ECONOMY............................................................................................................... 7
2.1. Anti-competitive agreements...................................................................... 7
2.1.1. The concept of anti-competitive agreements ........................................ 7
2.1.2. Characteristics of anti-competitive agreements ................................... 7
2.1.2.1. General characteristics of anti-competitive agreements ................. 8

2.1.2.2. Main types of anti-competitive agreements ................................... 9
2.1.2.3. Anti-competitive agreements in terms of relevant market ........... 10
iii


2.1.3. Overview of Legislation on anti-competitive agreements in the market
economy ........................................................................................................ 12
2.2. Abuse of dominance ................................................................................. 13
2.2.1. The concept of abuse of dominance .................................................... 13
2.2.2. Characteristics of abuse of dominance............................................... 15
2.2.2.1. General characteristics of abuse of dominance ............................ 15
2.2.2.3. Abuse of dominance in terms of relevant market ......................... 16
2.2.3. Overview of Legislation on abuse of dominance in the market
economy ........................................................................................................ 18
2.3. The digital economy ................................................................................. 21
2.3.1. The concept of the digital economy .................................................... 21
2.3.2. Characteristics of the digital economy ............................................... 22
2.3.2.1. General characteristics of the digital economy ............................ 23
2.3.2.2. Objects in the digital economy and the relationship between them
.................................................................................................................... 25
CHAPTER 3: ANTI-COMPETITIVE AGREEMENTS OR ABUSE OF
DOMINANCE IN THE DIGITAL ECONOMY................................................. 32
3.1. Anti-competitive agreements in the digital economy .............................. 32
3.1.1. Characteristics of anti-competitive agreements in the digital economy
....................................................................................................................... 32
3.1.2. Case-study of anti-competitive agreements in the digital economy ... 40
3.2. Abuse of dominance in the digital economy ........................................... 43
3.2.1. Characteristics of abuse of dominance in the digital economy .......... 44
3.2.2. Case-study of abuse of dominance in the digital economy................. 47
iv

3.3. Overview of developed countries’ experience in dealing with anticompetitive agreements or abuse of dominance in the digital economy ...... 48
CHAPTER 4: LEGAL REGULATIONS DEALING WITH ANTICOMPETITIVE AGREEMENTS AND ABUSE OF DOMINANCE IN
VIETNAM............................................................................................................... 56
4.1. The actual situation in Vietnam and the issues raised ........................... 56
4.1.1. Overview of Vietnam legislation on anti-competitive agreements or
abuse of dominance in the digital economy .................................................. 56
4.1.2. The situation on anti-competitive agreements and abuse of dominance
on the digital economy in Vietnam ............................................................... 58
4.2. Raising issues from dealing with anti-competitive agreements and abuse
of dominance cases in the digital economy .................................................... 59
4.2.1. The objective factors ........................................................................... 59
4.2.1.1 Market definition and dominance .................................................. 59
4.2.1.2. Anti competitive agreements by algorithms ................................. 64
4.2.2. The subjective factors ......................................................................... 65
4.2.2.1. Competition law system ............................................................... 65
4.2.2.2. Quality of personnel of the competition management agency ..... 66
CHAPTER 5: RECOMMENDATION AND CONCLUSION .......................... 67
5.1. Recommendation ...................................................................................... 67
5.1.1. Improving provisions in Competition Law to enhance its adaptability
to digital economy‟s problem ....................................................................... 67
5.1.1.1. The relevant market definition ..................................................... 68
5.1.1.2. Procedure of lodging competition complaints .............................. 69
5.1.1.2. Using new assessment tools ......................................................... 69
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5.1.2. Improving the skilled human resources in the field of competition law
and policy ...................................................................................................... 71

5.1.3. Raising awareness of competition law and policy .............................. 72
5.1.3.1. Raising awareness of consumer .................................................... 72
5.1.3.2. Raising awareness of enterprises .................................................. 73
5.2. Conclusion ................................................................................................ 73
REFERENCES ....................................................................................................... 75

vi


ACKNOWLEDGEMENT
During the completion of this master thesis, I received the guidance and valuable
help from the lecturers, siblings and friends. With great respect and deep gratitude, I
would like to express sincere thanks to:
Prof. Dr. Tang Van Nghia, Dean of Faculty of Graduate Studies of the Foreign
Trade University (FTU) who wholeheartedly helped, supported and encouraged me
from the initial to the final level of this dissertation. He provided me with
comprehensive guide from choosing the topic, outlining the thesis and editing this
research.
Professors and lecturers from FTU as well as World Trade Institute in the Master
of International Trade Policy and Law Intake Four, who not only spread profound
knowledge and information in the fields of economy and law but generated strong
motivation for me while I was taking this course as well.
Last but not least, I would like to express my sincere thanks to my family, my
colleagues and my friends, who have always by my side encouraging, supporting,
contributing valuable ideas and giving me favorable conditions for me to complete this
scientific research.

vii

LIST OF ABBREVIATIONS
Abbreviation

Full name

EU

European Union

GDP

Gross Domestic Product

ICN

International Competition Network

JICA

Japan International Cooperation Agency

MFN

Most Favoured Nation

NAFTA

North American Free Trade Agreement

NT

National Treatment

OECD

Organization

for

Economic

Cooperation

and

Development

SME

Small and Medium – Sized Enterprises

SOE

State – Owned Enterprises

TFEU

Treaty on the Functioning of the European Union

TRIPS

Trade – Related Aspects of Intellectual Property Rights

U.S

United States of America

UNCTAD

United Nations Conference on Trade and Development

VCA

Vietnam Competition Authority

VCC

Vietnam Competition Council

WTO

World Trade Organization
viii


LIST OF FIGURES

Figure 1The features of the digital market call for a different and more nuanced
approach to competition policy .......................................................................................... 22
Figure 2: Two side market ......................................................................................... 28

Figure 3: Marketing mix of digital platforms ............................................................ 30
Figure 4: Monitoring algorithms ............................................................................... 34
Figure 5: Parallel algorithms ..................................................................................... 36
Figure 6: Signalling algorithms ................................................................................. 38
Figure 7: Self-learning algorithms ............................................................................ 40

LIST OF BOXES

Box 1: The airline tariff publishing company case .................................................... 42
Box 2: The Google case of abuse of dominant .......................................................... 51
Box 3: Article 9 of the Competition Law 2018: "Determining the relevant market . 57
Box 4: Determine the market of related products ...................................................... 57
Box 5: Grab-Uber case of merger .............................................................................. 59

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ABSTRACT
The digital economy is developing very rapidly, digital technologies have gone
into all aspects of life, including the production and business activities of enterprises.
This thesis shows the new characteristics of the digital economy, the differences that
digital technologies have impacted on the competitive behavior of enterprises,
including anti-competitive agreements as well as abuse dominant behaviors. Since
then, the thesis points out the difficulties and challenges faced by Vietnam 's
competition authority when dealing with competition issues of the digital economy. A
number of solutions to improve the effectiveness of resolving anti-competitive
agreement or abuse of dominance cases will also be discussed.
More specifically, the thesis presents some contents such as: (i) Basic concepts
and principles of competition law, anti-competitive agreements, abuse of dominance
behaviors of enterprises in the market; (ii) The legal provisions of Vietnam and the

world in adjusting and managing competitive acts of enterprises, especially anticompetitive agreements as well as abuse of dominant position; (iii) The characteristics
of the digital economy, the participants, the relationship between subjects, the
difference in competitive behavior of enterprises on digital platforms; (iv) Differential
characteristics of the anti-competitive agreements in the digital economy, the forms of
agreements, the conditions of agreement, the method of agreement, the difficulties for
the management agencies to check and detect ; (v) Differences in acts of abusing the
dominant position of the enterprise in the digital economy, the main implementing
entity, the implementation methods, difficulties in the detection and management of
the competition authorities (vi) challenges competition authorities face when dealing
with competition cases in the digital economy, difficulties in identifying relevant
markets, managers do not have expertise in digital technology, consumers lack
awareness of protecting themselves ...; (vii) Some solutions to help Vietnam's
competition authority to improve the management capacity of anti-competitive
agreements or abuse of dominance, solutions to improve the agency's capacity
management, improvement of the legal system, solutions to raise consumers'
awareness.
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In general, the dissertation provides new content on anti-competitive agreements
as well as abuse of dominance in the digital economy, and proposes some solutions to
authorities before rapid development of this economy.

xi


CHAPTER 1: INTRODUCTION

1.1. Research rationale
Competition is a core element of a market economy, competition law is also

considered as the constitution of the economy. With continuous development, many
new business models have been formed, and the most outstanding ones in recent
years are the emergence of digital business models. These businesses grow at a
rapid pace and create a whole new market - digital market or even digital economy.
However, competition in the digital market differs in some ways compared to
competition in more traditional markets. This field often includes platform-based
business models, multi-sided markets, network effects and economic scale, which
make competition more complex. These distinctive characteristics have ambivalent
effects on the competitive process. Indeed, while digital markets are generally
perceived to benefit consumers through lower prices, increased transparency and
improved product quality, they also have a tendency towards market concentration,
which results in new big concern for competition authorities, who are not quite
familiar with kinds of digital characteristics.
In a digital economy, a mainstream trend often takes place, that one or very
few companies account for the majority, even the entire market share. A term
commonly used to describe this situation is ―winner-takes-most‖ markets, which

means that dominant firms have excessive power to raise prices without
losing many customers. Today‘s superstar companies owe their privileged
position to digital technology‘s network effects, whereby a product becomes
even more desirable as more and more people use it. With considerable
market power, these companies often use it skillfully to increase their
economic benefits. On the other hand, for emerging, small-scale digital
companies, it is imperative to have agreements between them and between
them and "superstar" companies to do business in a digital economy, unless
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they want to be annexed by other super big companies. In many cases, these
digital companies violate competition law by anti- competitive agreements or

market power abusive conducts, and then dramatically eliminating
competitiveness in the market. Competition authorities around the world are
now facing difficulties in resolving these kinds of issues, because of their
newness and complexness.
Because of the above practice, this essay will focus on analyzing the new and

complex characteristics of anti-competitive agreements and

abuse of

dominance conducts by businesses in the digital economy, and then, making
some recommendations for competition authorities, especially Vietnam
competition authority in handling these kinds of competition cases.
1.2. Literature review
While a significant amount of researches have been conducted in the fields of
competition law and policy, there are not many researches focusing on competition
in the digital economy. The main reason is that the digital economy has just been
developed for more than a decade; but the issues of competition in the digital
economy are therefore not really clear and become a major concern for competition
management agencies. In Europe, a number of studies on competition policy in the
digital economy have been conducted, and are still very new.
First of all, there must be research ―Competition law in the digital economy: a
French perspective (Pierre Honoré and Romain Verzeni, 2017). This is a research
on digital market, with both pro and anticompetitive characteristics. On the one
hand, digital markets are generally perceived to benefit consumers through lower
prices, increased transparency and improve product quality. On the other hand, they
also have a certain tendency towards market concentration. Drawing upon the
recent decision-making practice of the French Competition Authority, the article
provides a brief account of some of the challenges raised by the application of
competition rules in the digital economy.

2


Market Power of Platforms and Networks (Bundeskartellamt, 2016), in
respond adequately to the challenges of the digital economy for antitrust
enforcement. In the context that the Internet is relevant for many cases. Large US
Internet companies such as Google, Facebook and Amazon are operating on a
national and European level with a high-profile online presence. At the same time,
their competitive conduct and their strategies always provoke intensive discussions
about competitive harm caused by such strategies and the question of whether they
are legal or should be dealt with under a regulatory framework. The paper it is the
Bundeskartellamt‘s goal to expand its expertise in the field of the digital economy,
to develop antitrust investigation concepts including relevant case practice and – to
the extent required – highlight any need for legislative action. In general, this study
focuses on Platforms and Networks which is a key component of the digital
economy through which businesses and consumers meet, exchange, buy and sell
goods and services online.
The digital economy, a challenge to competition policies (Edmond Baranes
and Andrea Cosnita-Langlais 2016) is a study that clarifies many aspects, the nature
of the digital economy, in particular the role of platforms and the competitive
behavior of businesses on those platforms. Since then, the author has summed up
the challenges for competition management agencies in managing the competitive
acts of enterprises. Since then, this study also proposes solutions to develop and
upgrade the competition policy in general of countries to meet the new demands of
the digital economy.
Resetting competition policy frameworks for the digital ecosystem (GSMA,
2016) is a further study on the specific characteristics of digital ecosystems,
including the role of telephone services in the digital economy. This study also
provides basic principles in determining relevant markets, and assessing market

power in a digital economy. Since then, making recommendations in developing a
common competition policy to catch up with the constant changes of this digital
market.

3


Challenges for Competition Policy in a Digitalized Economy (European
Parliament, 2015), this study focuses on describing the economy of the form of
value network, business models, business strategy of enterprises through those
value networks. Since then, this study has pointed out 10 issues that the digital
economy poses to the competitive field and challenges for state management
agencies in solving those problems and offering some solutions. In general, this is a
quite comprehensive and practical study for the legislative bodies of the research
countries to improve their capacity to solve competitive issues in the digital
economy.
Pricing algorithms: the digital collusion scenarios (Freshfields Bruckhaus
Deringer1, 2017) is an interesting study of the subtle collusion methods that
businesses can implement in the digital market, through price fixing using
algorithms. This is a very new aspect, which outlines the cases in which
underground businesses collude to fix prices without competition laws. Since then,
this study shows the gaps that European competition laws in particular and the
world in general in controlling such anti-competitive agreements.
In addition, there are many other studies that I cannot name them all. Such as
Economic studies of two- and multi-sided markets and of service platforms have
developed considerably in the past few years (CAILLAUD & JULIEN 2001, 2003;
ROCHET & TIROLE 2003, 2006). More recently, studies have focused on the
implications of the digital economy for competition policies (EVANS 2003). They
have recurrently emphasized that the major conclusions drawn for traditional
markets cannot be extrapolated to e-businesses. This holds, in particular, for prices,

which, if lower than costs, would be evidence of predatory (or abusive) behavior, or
for profit margins, which, if too large, would necessarily be incompatible with
strong competition (BEHRINGER & FILISTRUCCHI 2015; VASCONCELOS
2015; WRIGHT 2004).

1

Freshfields Bruckhaus Deringer, the international law firm (a limited liability partnership
organised under the law of England and Wales. www.freshfields.com/support/legalnotice.

4


1.3. Research objectives
This study focuses on clarifying the characteristics of agreements to restrict
competition and abuse of dominant position in the digital economy. At the same
time, it makes recommendations for the Vietnamese competition authority in
resolving those issues.

1.4. Research questions
The objectives of the research are derived from the research questions as
follows:
- What is importance of a digital economy?
- What are characteristics of anti-competitive agreements in the digital
economy?
- What are characteristics of abuse of dominant in the digital economy?
- Which difficulties and challenges do competition authority face when
dealing with competition issues in the digital economy?

- How does Vietnam Competition Authority improve adaptive capacity and

effectively solve competition cases in the digital economy, especially agreements to
restrain competition and abuse use a dominant position?

1.5. Scope of research
In terms of the content of this thesis, it focuses primarily on the synthesis of
the characteristics of anticompetitive agreements and the abuse of dominant
position in the digital economy and from there to make recommendations for
Vietnam Competition Authority. Therefore, the scope of this thesis is as follows:
As for geographical scope: This thesis focuses on research on anti-competitive
agreements and acts of abuse of dominant position in the digital economy, taking
into account the specific cases that occur in the world, then this study makes deeper
analysis on Vietnam's context.

5


As for time scope, the research focuses its analysis and synthesis on the recent
period of about 15 years (since the digital economy emerged) and also makes some
prediction of some new complicated characteristics of competitive activity in the
digital economy in the future

1.6. Research methodology
During the research process of this thesis, the author has combined different
research methods as follows:
- Theoretical research methods:
The thesis will collect legal documents, economic information through
historical research method and then classify and systematize them. Moreover, the
thesis also analyze and synthesize all data and documents.
- Practical research methods:
The thesis will observe the real situation of enforcement of competition law

and policy all over the world and base on particular experiences from several
countries, giving recommendations for Vietnam by professional solution method.

1.7. Thesis outline
Chapter 1: Introduction
Chapter 2: The principle of anti-competitive agreements, abuse of dominance
and the digital economy
Chapter 3: ANTI-COMPETITIVE AGREEMENTS OR ABUSE OF
DOMINANCE IN THE DIGITAL ECONOMY
Chapter 4: Dealing with anti-competitive agreements and abuse of dominance
cases in the digital economy for Vietnam Competition Authority
Chapter 5: Recommendation and conclusion.

6


CHAPTER 2: THE PRINCIPLE OF ANTI-COMPETITIVE AGREEMENTS,
ABUSE OF DOMINANCE AND THE DIGITAL ECONOMY

2.1. Anti-competitive agreements
2.1.1. The concept of anti-competitive agreements
In economics, anti-competitive agreement (Cartel) is seen as the unity of many
businesses to reduce or eliminate the pressure of competition or limit the ability to
act in a unique way set up among competitors. Dictionary of International Trade
Policy defines Cartel as a formal or informal agreement to achieve beneficial results
for related goods, but may be harmful to other parties. Therefore, anti-competitive
agreement (cartel) is one of the competition restriction acts regulated by
Competition Laws of many countries.
Paragraph 1 of Article 81 of the Rome Treaty2 prohibits any agreement
between businesses, any decisions of the business association and any coordinated

action that may affect trade exchanges between member states with anti-competitive
consequences.
According to Clause 3, Article 3 of the Vietnamese Competition Law, anticompetitive agreements are acts of enterprises that reduces, falsifies or obstructs
competition in the market, including Anti-competitive agreements, abuse of market
dominance, abuse of monopoly position and economic concentration. Although the
Competition Law does not directly provide a definition of Anti-competitive
agreement, but from the content of the above provisions, it can be understood that it
is an agreement between two or more business entities in the market towards or
having the effect of reducing, falsifying or obstructing normal competition in the
market.
2.1.2. Characteristics of anti-competitive agreements
2

The Treaty on the Functioning of the European Union (TFEU; also referred to as the Treaty
of Rome) is one of two treaties forming the constitutional basis of the European Union (EU), the
other being the Treaty on European Union (TEU; also referred to as the Treaty of Maastricht).

7


2.1.2.1. General characteristics of anti-competitive agreements
On the subject side
Subjects conducting anti-competitive agreements are businesses, those with
the form of business organizations or business associations...
Laws against anti-competitive agreements in many countries usually include
measures on the anti-competitive agreement behavior when the subjects conducting
such behavior are businesses. However, the subjects of the anti-competitive
agreements are also defined differently in each specific case. But, there are still
some things in common such as:
Enterprises conducting an anti-competitive agreement must be on the same

relevant market;
Enterprises must operate independently of each other. The unified actions of
corporations, of an economic group or of parent and subsidiary companies, are not
considered agreements by the competition law, because of the fact that the abovementioned economic groups, in spite of including many members, are also just a
unified subject.
In terms of forms
Anti-competitive agreements are agreements, contracts or same actions
between entities (called agreement parties) to limit competition between them, or
reduce or deviate the competition on the market in general. Anti-competitive
agreements occur in two forms: vertical agreements and horizontal agreements
(vertical and horizontal cartels).
Horizontal agreement is an agreement made between entities of the same level
of business, so these types of agreements are often agreements involving price
fixing, market division, preventing other businesses from market entry...
Vertical agreements are agreements made between entities at different levels
of business (manufacturers, distributors, retailers), so common behaviors in vertical

8


agreements are resale price maintenance, exclusive distribution by territory, or
customer group...
2.1.2.2. Main types of anti-competitive agreements
According to the European Commission, agreements are almost always illegal
if the participants agree to:
-

fix prices;

-

limit production;

-

share markets or customers;

-

fix resale prices (between a producer and its distributors).

But an agreement may be allowed if it:
-

has more positive than negative effects;

-

is not concluded between competitors;

-

involves companies with only a small combined share of the market;

-

is necessary to improve products or services, develop new products or find

new and better ways of making products available to consumers.
And Under Article 11 of Vietnamese Competition Law 2018, Anti competitive agreements include:

1.

Agreement to fix prices of goods or services directly or indirectly.

2.

Agreement to divide customers, divide consumer markets, supply goods and
services.

3.

Agreement to limit or control the quantity and volume of production,
purchase, sale of goods and provision of services.

4.

Agreement for one or more parties to the agreement to win a bid when
participating in a bid to supply goods or provide services.

5.

Agreement to prevent, inhibit or prevent other businesses from entering the
market or developing business.
9


Agreement to remove from the market those businesses that are not parties

6.

to the agreement.
Agreement to limit technical and technological development and investment

7.

restrictions.
Agreement to impose or impose conditions for signing a contract to buy, sell

8.

goods, provide services to another enterprise or agree to force another
enterprise to accept obligations that are not directly related to the object of
contract.
9.

The agreement does not deal with parties not participating in the agreement.

10.

Agreement to restrict consumption markets of products and sources of
supply of goods and services provided by parties not participating in the
agreement.

11.

Other agreements that impact or potentially cause limited competition.

2.1.2.3. Anti-competitive agreements in terms of relevant market
Competition does not exist in a vacuum but in a marketplace. For the purpose
of competition law, the 'marketplace' has to be defined with even more precision, in

terms of a 'relevant market', a market where the effect of competition takes place.
The relevant market can be defined as an instrument to recognize and define
the limitations of competition between companies and can be determined by
defining the relevant product market or the relevant geographic market or with
reference to both the markets. The relevant geographic market illustrates the
locations of the producers or sellers of the product or service and whereas the
relevant product market describes the market comprising of products or services
which are regarded as interchangeable or substitutable by the consumer, by reason
of characteristics of the products or services, their prices and intended use.
The need for defining the relevant market is for the purpose of drawing
parameters of wrongdoing in the relevant market, the question is whether a relevant
market must be defined in cases, which deals with anti-competitive agreements?
10


The answer is 'no', in fact, competition policy of most countries do not
required to identify the relevant market in all anti competitive agreement cases, but
have to see if the agreement has anti-competitive effect in any market and this
market may be the market of the product/ service of any party entering into the
agreement.
However, it is impossible to completely deny the value of determining the
relevant market in dealing with anti-competitive agreements. Not defining the
relevant market before undertaking analysis may be a substantive error that affects
the validity of the analysis. It is only those agreements between enterprises or
persons "engaged in identical or similar trade of goods or provision of services"
that attract the presumption contained therein. For the purposes of determining
whether goods or services are identical or similar to each other, it is necessary to
examine their demand side substitutability, which again involves looking at the
relevant product and geographical markets.
Market definition is a tool to identify and define the boundaries of competition

between firms. It serves to establish the framework within which competition policy
is applied by the Commission. The main purpose of market definition is to identify
in a systematic way the competitive constraints that the undertakings involved face.
The objective of defining a market in both its product and geographic dimension is
to identify those actual competitors of the undertakings involved that are capable of
constraining those undertakings behavior and of preventing them from behaving
independently of effective competitive pressure. Therefore, the purpose of defining
the 'relevant market' is to assess with identifying in a systematic way the
competitive constraints that undertakings face when operating in a market.
Therefore, identifying relevant markets is an important first step that needs to be
taken, before analyzing and evaluating competition cases in general and
anticompetitive agreements in particular. And indeed, many countries have used the
combined market share of businesses in the relevant market to screen competitive
cases in the market, including agreements between businesses.

11


2.1.3. Overview of Legislation on anti-competitive agreements in the market
economy
Faced with a competition restriction agreement, each country must present its
own views. While there are differences in details, in general, most countries agree
that not all competition restriction agreements are considered illegal, only
agreements that cause drought. Serious competition for third parties is prohibited.
The important thing here is that each country sets its own criteria to determine
different levels of "serious competition restriction." This difference is often
expressed in the percentage of the combined market share of the relevant market in
the agreement that each country provides for each specific case. On the other hand,
the viewpoint of each country dealing with the competition restriction agreement is
also expressed by which states each impose an exemption on this type of agreement.

The Competition Model Law of the United Nations Trade and Development
Organization sets out agreements that are considered to be the following restrictive
agreements: "Agreement on pricing or other sales conditions, including in trade
international trade; collusion bidding; dividing markets or customers; restrict
production, limit sales, including quota use; refusing to purchase goods with
collusion; refusing to provide goods with collusion; denying the collective
permission to participate in some agreements ‖.
This law allows an exemption for all of the above restrictive agreements if
these actions are notified in advance or the authorities believe that these behaviors
may bring public benefits. If it does not fall under the exemptions, all of the above
agreements are prohibited, whether they are in any form and are formal or informal.
Thus, in contrast to the laws of some other countries, this Law does not provide for
a distinction between agreements to restrain legitimate competition and illegal
agreements (regardless of exemptions). In the spirit of this Law, all restrictive
agreements are illegal and prohibited. This law does not care about the criteria such
as the combined market share of the parties to the agreement, but only interested in
how the parties themselves agree with each other to determine legality. of
competition restriction agreement.
12


Canada's competition law has no concept of restraint agreement but has the
concept of "collusion" and "collusion bidding". In fact, the term collusion is used
with the Competition Law, while in most other countries, the Competition Law
considers collusion bidding to be among competition restriction agreements
meaning of more negative agreements than positive and that is another way of
limiting competition agreements. "Collusive bidding" is separated into an
independent act by Canada's.
In Vietnam, Vietnam's Competition Law was passed by the 12th National
Assembly, the 6th session in 2018 and came into effect on January 7, 2019,

providing detailed provisions on anti competitive agreements.
Under Vietnam's Competition Law, the three types of final competition
restriction agreements mentioned in section 2.1.2.2 are strictly prohibited, the
remaining agreements are still accepted if the parties agree to have a combined
market share in the relevant market is less than 30%. Among agreements that are
considered to be restrictive of competition, only agreements that are not strictly
prohibited are entitled to exemptions with certain conditions and exemptions are
always valid. The parties to the competition restriction agreement will have to meet
one of the conditions set out by the Competition Law to enjoy an exemption.
Exemptions are mainly based on the purpose of the competition restriction
agreement set by the parties. More specifically, if that agreement is to either
streamline the organizational structure, business model, improve business
efficiency; or promote technical and technological advances, improve goods and
service quality; or promote the uniform application of quality standards, technical
norms of product categories; or unify the conditions of business, delivery, and
safety but not related to the elements of the family; or enhance the competitiveness
of small and medium enterprises; or enhance the competitiveness of Vietnamese
businesses in the international market.

2.2. Abuse of dominance
2.2.1. The concept of abuse of dominance
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Concept of dominance
The European Court of Justice (ECJ) in United Brands v. Commission
mentioned ―dominant position‖ in the context of Article 102 of the TFEU Treaty as
―a position of economic strength enjoyed by an undertaking which enables it to
prevent effective competition being maintained on the relevant market by affording
it the power to behave to an appreciable extent independently of its competitors,

customers and ultimately of its consumers‖ (United Brands v. Commission, 1978).
This means that an undertaking will have dominant position if the undertaking has
the ability to do two things:
-

the ability to prevent effective competition and

-

the ability to behave independently of its competitors
In general, the concept of ―dominance‖ or ―dominant position‖ literally means

control. ―Dominant‖ is an adjective that refers to ruling or governing. To dominate
is to exercise control over or to govern. ―Dominance‖ as it is widely known is a
concept, which frequently occurs when a player (or a licensee) has monopoly in a
particular market. Dominant position relates to the possession of sufficient market
share that enables an undertaking to act independently without taking account of the
likely behavior of competitors
Concept of abuse of dominance
According to OECD definition, “The term abuse of dominant position refers
to anticompetitive business practices in which a dominant firm may engage in order
to maintain or increase its position in the market.”3
According to European commission4, Abuse of a dominant position means
that A company can restrict competition if it is in a position of strength on a given
market. A dominant position is not in itself anti-competitive, but if the company
exploits this position to eliminate competition, it is considered to have abused it.
OECD, ABUSE OF DOMINANT POSITION – Grossary of statistical terms
See />4
OECD, ABUSE OF DOMINANT POSITION
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