What is conditional economic concentration? How will businesses be punished for not fully implementing the conditions for economic concentration?

What is conditional economic concentration?

Regulations on conditional economic concentration in Article 42 of the Competition Law 2018 are as follows:

Economic concentration Conditional economic concentration

Conditional economic concentration is an economic concentration that is carried out but must meet one or more of the following conditions:

1. Divide, separate, and resell part of the capital contribution and assets of enterprises participating in economic concentration;

2. Control content related to purchase price, selling price of goods, services or other transaction conditions in contracts of enterprises formed after economic concentration;

3. Other measures to overcome the possibility of restricting competition on the market;

4. Other measures to enhance the positive impact of economic concentration.

Accordingly, conditional economic concentration is economic concentration that is carried out but must meet one or more of the conditions specified in Article 42 above.

What are the penalties for enterprises that do not fully comply with the conditions for economic concentration?

The level of administrative penalties for enterprises that do not fully comply with the conditions for economic concentration are specified in Point a, Clause 2, Article 15 Decree 75/2019/ND-CP as follows:

Behaviors violating other economic concentration laws

1. Fine from 0.5% to 01% of total revenue on the relevant market in the fiscal year immediately preceding the year of committing the violation of each enterprise participating in economic concentration for one of the following acts:

a) Carrying out economic concentration without notification of preliminary appraisal results from the National Competition Commission specified in Clause 2, Article 36 of the Competition Law, except for the case specified in Clause 1 of this Article. 3 Article 36 of the Competition Law;

b) Implementing economic concentration when the National Competition Commission has not issued a decision specified in Article 41 of the Competition Law in cases where economic concentration acts require official appraisal.

2. Fine from 01% to 03% of total revenue on the relevant market in the fiscal year immediately preceding the year of committing the violation of each enterprise participating in economic concentration for the following acts:

a) Failure to implement or incomplete implementation of the conditions expressed in the decision on economic concentration specified in Point b, Clause 1, Article 41 of the Competition Law competition;

b) Implementing economic concentration in the case specified in Point c, Clause 1, Article 41 of the Competition Law.

At the same time, according to Clause 2 and Clause 3, Article 4 of Decree 75/2019/ND-CP stipulates as follows:

Fine levels for administrative violations of competition

…

2. The maximum fine for violations of economic concentration regulations is 05% of the total revenue of the violating enterprise on the relevant market in the fiscal year immediately preceding the year of the violation.

3. In case the total revenue of an enterprise that commits a violation on the relevant market in the fiscal year immediately preceding the year of committing the violation specified in Clauses 1 and 2 of this Article is determined to be 0 (zero), a fine of from 100,000,000 VND to 200,000,000 VND will be applied.

According to the above regulations, an enterprise that does not fully comply with the economic concentration conditions in the decision on economic concentration may be subject to administrative sanctions with a fine ranging from 01% to 03% of total revenue on the relevant market in the fiscal year immediately preceding the year in which the violation was committed.

In case the above total revenue of this enterprise is determined to be 0 (zero), a fine from 100,000,000 VND to 200,000,000 VND will be applied.

What is the statute of limitations for sanctioning administrative violations for enterprises that do not fully comply with economic concentration conditions?

According to point a, clause 1, Article 6 of the Law on Handling of Administrative Violations 2012, amended by point a, Clause 4, Article 1 of the Law on Handling of Administrative Violations Amended 2020, the statute of limitations for handling administrative violations is specified as follows: following:

Statute of limitations for handling administrative violations

1. The statute of limitations for sanctioning administrative violations is prescribed as follows:

a) The statute of limitations for sanctioning administrative violations is 01 year, except for the following cases:

Administrative violations of accounting; bill; fees and charges; insurance business; price management; stock; intellectual property; build; seafood; forestry; investigation, planning, exploration, exploitation and use of water resources; petroleum and other mineral activities; environmental protection; atomic energy; management and development of housing and offices; land; dikes; press; publish; production, export, import, and trading of goods; producing and trading banned and counterfeit goods; When managing foreign workers, the statute of limitations for sanctioning administrative violations is 02 years.

For administrative violations of tax, the statute of limitations for sanctioning administrative violations is in accordance with the provisions of law on tax administration;

Thus, the statute of limitations for sanctioning administrative violations for enterprises that do not fully comply with economic concentration conditions is 01 year.