1. Economic concentration under the Law on Competition 2018

Under Vietnamese Law on Competition, if an economic concentration (including merger, consolidation, acquisition of an enterprise, joint venture between enterprises, and other forms of economic concentration as prescribed by law ) triggers the notification threshold (thresholds include total assets, total turnover, transaction value or market share), the enterprises engaging in the economic concentration (“EC”) shall submit a EC notification dossier to the Vietnam Competition Commission (“VCC”) prior to implementing the EC .

The control of EC transactions plays a crucial role in preventing the formation or strengthening of dominant market positions and in restricting competition in the market. If an enterprise engaging in the EC and being subject to notification obligation fails to comply with such obligation, then under Decree 75/2019/ND-CP, it may be subject to an administrative fine ranging from 1% to 5% of the total turnover in the relevant market in the fiscal year immediately preceding the year of the violation . If the violating enterprise’s total turnover in the relevant market in the fiscal year immediately preceding the year of the violation is zero, an administrative fine ranging from VND 100,000,000 to VND 200,000,000 will be applied .

According to VCC’s Result of EC control activities in Vietnam under Vietnamese Law on Competition during the 2020–2024 period, VCC received a total of 194 cases in 2024, in which 03 cases subject to official appraisal. The sectors with the highest number of EC notifications included Real Estate, Industry, Services, and Energy & Minerals.

2. Vietnam competition commission issues the first administrative sanction decision against failure to notify economic concentration

Although Law on Competition 2018 and Decree No. 75/2019/ND-CP on administrative sanctions in the field of competition took effect in 2019, no sanction decision had been issued against failure to notify an EC until 2024. One of the key reasons for this situation is that VCC – the authority responsible for enforcing competition law and having jurisdiction to apply administrative sanction on EC – was only officially established on 01 April 2023 under Decree No. 03/2023/ND-CP.

Therefore, the administrative sanction decision against Duc Giang Lao Cai Chemicals Limited Company (DLC) and Phosphorus 6 One Member Limited Company (PP6) could be considered as the first administrative sanction decision issued since the Law on Competition 2018 took effect.

Specifically, on 13 May 2024, the Competition Investigation Agency under VCC issued Decision No. 14/QD-CT to investigate case No. 24-KX-TKT-01 relating to the failure to notify an EC between DLC and PP6.

The investigation result shows that the enterprises failed to notify the EC in which DLC acquired 100% of the shares/charter capital of Phosphorus 6 Joint Stock Company (now PP6) as stipulated by Law on Competition 2018, thereby violating Article 44.1 of Law on Competition 2018.

Pursuant to the provisions of the law on competition and other relevant legal regulations, VCC issued a decision to impose administrative sanctions in the field of competition on DLC with a fine of VND 1,323,982,880 and PP6 with a fine of VND 100,000,000.

This first sanction decision marks a significant milestone in the enforcement of the Law on Competition 2018 and serves as a clear warning to enterprises that fail to comply with the notification obligations for EC. It also sends a positive signal that Vietnam’s competition law is being effectively implemented in practice, thereby contributing to the development of a fair and transparent competitive environment in Vietnam.

We sincerely thank Senior Associate Nguyen Duc Anh and Trainee Associate Nguyen Minh Giang for their valuable contributions to this legal update.