Competition Law remains something new after four years of enforcement
The Competition Law has been in force for four years but businesses’ basic knowledge about it is limited.
To help them gain a better understanding of the law, the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the Multilateral Trade Assistance Project has launched a media campaign against uncompetitive acts by holding the five seminars in HCM City, Can Tho, Danang, Hai Phong and Hanoi.
Only 20 violations dealt with in four years
The Competition Law was adopted by the National Assembly on December 3, 2004 and officially came into force on July 1, 2005. With six chapters and 123 articles, the Law is a massive legal document and is of great importance to the development of Vietnam’s market economy. However, after four years, many Vietnamese businesses have failed to grasp it to protect themselves.
Under the Competition Law, unhealthy competitive acts include misleading advertisement and promotion activities, production of fake or imitation goods, price gauging and imposition of illegal contracts on other businesses.
In fact, there have been many violations against the Competition Law such as the Steel Association’s decision to fix prices, the Vietnam Insurance Association’s decision to raise insurance fees for customers and businesses’ monopoly in drug and dairy product markets.
Over the past four years, only 20 cases of unhealthy competition have been dealt with under the Law.
Smaller businesses beset with bigger worries
Le Danh Vinh, Deputy Minister of Industry and Trade says that the Competition Law has not been fully brought to life because businesses, especially small- and medium-sized enterprises (SMEs) are still not quite clear about it. Most of them are reluctant to take legal action, which makes the Competition Law ineffective when it should be a safeguard.
Tran Huu Huynh, head of the Legal Department under the Vietnam Chamber of Commerce and Industry, says that many businesses know others breaking the Competition Law, which affects them but they let the matter drop because if they lodge a lawsuit they must collect the evidence themselves. It is beyond the ability of most SMEs to gain detailed information from the authorities.
In addition, the fee for lodging a protest against unhealthy competition is just VND10 million, while the cost for a lawsuit against the act of restricting competition is ten times higher. Furthermore, many SMEs do not believe they will be successful as the independent operation of the Competition Department and the Competition Council is still a question mark. Even worse, businesses do not know the names of the Competition Council’s members.
As experts put it, the Competition Law covers all issues related to competition in the market, but to bring it to life the State must take strong action as they did with the Enterprises Law in the past.
