What methods is the enterprise’s market share in the relevant market determined? What principles must be followed?

What methods are used to determine enterprise market share in the relevant market?

Pursuant to the provisions of Clause 1, Article 10 of the Competition Law 2018 on determining market share and combined market share as follows: following:

Determine market share and combined market share

1. Based on the characteristics and nature of the relevant market, the enterprise’s market share in the relevant market is determined by one of the following methods:

a) The percentage between the sales revenue of this enterprise and the total sales revenue of all businesses in the relevant market by month, quarter, and year;

b) The percentage between the purchase turnover of this enterprise and the total purchase turnover of all enterprises in the relevant market by month, quarter, and year;

c) Percentage between the number of units of goods and services sold by this enterprise and the total number of units of goods and services sold by all enterprises in the relevant market by month, quarter, and year;

d) Percentage between the number of units of goods and services purchased by this enterprise and the total number of units of goods and services purchased by all enterprises in the relevant market by month, quarter, and year.

2. Combined market share is the total market share in the relevant market of enterprises engaging in anti-competitive behavior or economic concentration.

3. Revenue to determine market share specified in Clause 1 of this Article is determined according to Vietnamese accounting standards.

4. In case an enterprise has been operating for less than 1 financial year, revenue, turnover, number of units of goods and services sold and purchased to determine market share specified in Clause 1 of this Article are calculated from the time the enterprise begins operations until the time of determining market share.

5. The Government regulates this Article in detail.

Thus, the enterprise’s market share in the relevant market is determined by one of the following four specific methods:

(1) The percentage between the sales revenue of this enterprise and the total sales revenue of all businesses in the relevant market by month, quarter, and year;

(2) The percentage between the purchase turnover of this enterprise and the total purchase turnover of all enterprises in the relevant market by month, quarter, and year;

(3) Percentage between the number of units of goods and services sold by this enterprise and the total number of units of goods and services sold by all enterprises in the relevant market by month, quarter, and year;

(4) Percentage between the number of units of goods and services purchased by this enterprise and the total number of units of goods and services purchased by all enterprises in the relevant market by month, quarter, and year.

What principles must be based on when determining market share of a business in the relevant market?

Pursuant to the provisions of Article 9 of Decree 35/2020/ND-CP on the principles of determining the market share of an enterprise in the relevant market as follows:

Principle 1. The market share of an enterprise in the relevant market is determined according to one of the methods specified in Article 10 of the Competition Law 2018.

Principle 2. In the process of determining market share, the National Competition Commission consults with industry and sector management agencies, businesses, organizations and individuals with expertise.

Thus, when determining market share, businesses in the relevant market will have to comply with the two principles mentioned above.

How is the market share of an affiliated enterprise group determined?

Pursuant to the provisions of Clause 1, Article 10 of Decree 35/2020/ND-CP as follows:

Determining the market share of an affiliated enterprise group

1. Sales revenue, purchase revenue, number of units sold, purchased for a type of goods or services of a group of affiliated enterprises are determined as follows:

a) Sales revenue, purchase turnover, number of units sold, purchased for a type of goods or services to determine the market share of a group of affiliated enterprises is calculated by the total sales revenue, purchase revenue, number of units sold, purchased for the type of goods goods and services of all enterprises in the group of affiliated enterprises;

b) Sales revenue, purchase revenue, number of units sold, purchased for a type of goods or services of a group of affiliated enterprises does not include sales revenue, purchase turnover, number of units sold, purchased from selling goods, providing services between enterprises in the group of affiliated enterprises.

2. The market share of an enterprise belonging to a group of affiliated enterprises is the market share of that group of affiliated enterprises.

Thus, the group of affiliated enterprises has their market share determined as follows:

– Sales revenue, purchase revenue, number of units sold, purchased for a type of goods or services to determine the market share of a group of affiliated enterprises is calculated by the total sales revenue, purchase turnover, number of units sold, purchased for that type of goods or services of all enterprises in the group of affiliated enterprises;

– Sales revenue, purchase revenue, number of units sold, purchased for a type of goods or services of a group of affiliated enterprises does not include sales revenue, purchase turnover, number of units sold, purchased from the sale of goods, provision of services between enterprises in the group of affiliated enterprises.