Is an enterprise that agrees to limit the market for consuming products but is beneficial to consumers eligible for exemption?

Is an agreement to limit the market for products sold an agreement to limit competition?

Agreements considered to be agreements to limit competition are stipulated in Article 11 of the Competition Law 2018 as follows: following:

Agreement to limit competition

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

2. Agreement to divide customers, divide consumer markets, source of goods, and provide 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 participating in the agreement to win the bid when participating in bidding to provide goods or provide services.

5. Agreement to prevent, restrain, or prevent other businesses from entering the market or developing their business.

6. The agreement eliminates from the market businesses that are not parties to the agreement.

7. Agreement to limit technical and technological development and investment.

8. Agreement to impose or fix conditions for signing a contract to buy or sell goods or provide services to another enterprise or an agreement to force another enterprise to accept obligations not directly related to the subject of the contract.

9. Agreement not to transact with parties not participating in the agreement.

10. The agreement limits the product consumption market, the supply of goods, and the provision of services of parties not participating in the agreement.

11. Other agreements that cause or are likely to cause anti-competitive effects.

According to the above regulations, an agreement to limit product consumption markets is considered one of the agreements to limit competition.

If an enterprise agrees to limit the market for its products but benefits consumers, is it exempt?

Exemptions for agreements that restrict the market for products but are beneficial to consumers are stipulated in Article 14 of the Competition Law 2018 as follows:

Exemptions for agreements that restrict prohibited competition

1. Agreements to restrict competition specified in Clauses 1, 2, 3, 7, 8, 9, 10 and 11, Article 11 that are prohibited under the provisions of Article 12 of this Law are exempted for a limited time if they are beneficial to consumers and meet one of the following conditions:

a) Impact on promoting technical and technological progress, improving the quality of goods and services services;

b) Enhance the competitiveness of Vietnamese enterprises in the international market;

c) Promote the uniform application of quality standards and technical norms of product categories;

d) Agree on conditions for contract performance, delivery, and payment, but not related to price and other factors of price.

2. Labor agreements and cooperation agreements in specific industries and fields that are implemented according to the provisions of another law shall comply with the provisions of that law.

Accordingly, businesses that agree to limit the market for products (in case of ban) but benefit consumers can be exempted for a limited period when one of the following conditions is met:

– Impact on promoting technical and technological progress and improving the quality of goods and services.

– Enhance the competitiveness of Vietnamese enterprises in the international market.

– Promote the uniform application of quality standards and technical norms of product categories.

– Agree on conditions for contract performance, delivery, and payment, but not related to price and price factors.

To which agency can a request for exemption from an agreement restricting the market for consuming products be sent?

The agency receiving the application for exemption from an agreement restricting the market for consuming a product is specified in Article 15 of the Competition Law 2018 as follows:

Submitting an application for exemption for prohibited anti-competitive agreements

1. Enterprises intending to enter into anti-competitive agreements are prohibited from submitting applications for exemption at the National Competition Commission.

2. Documents requesting exemption from prohibited anti-competitive agreements include:

a) Application according to the form issued by the National Competition Commission;

b) Draft agreement content between the parties;

c) A copy of the Business Registration Certificate or equivalent document of each enterprise participating in the prohibited competition restriction agreement; copy of the Charter of the industry association in case of prohibited anti-competition agreement with the participation of the industry association;

d) Financial statements of each enterprise participating in a prohibited anti-competitive agreement for 02 consecutive years immediately preceding the year of submitting the application for exemption or financial statements from the time of establishment to the time of submitting the application for exemption for newly established enterprises with confirmation from an auditing organization according to the provisions of law;

d) Report specifically explaining compliance with regulations in Clause 1, Article 14 of this Law, accompanied by evidence to prove it;

e) Authorization document of the parties participating in the prohibited competition restriction agreement for the representative party (if any).

3. The submitting enterprise is responsible for the truthfulness of the application. Documents in the application in a foreign language must be accompanied by a Vietnamese translation.

Thus, businesses intending to participate in agreements to limit the market for prohibited products can submit an application for exemption at the National Competition Commission.