Doctoral dissertation: Improving the competition and business monopoly control policy in Vietnam in the context of international economic integration

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Purpose of the study: On the basis of synthesis and clearer interpretation of the relationshipsbetween competition and monopoly, between competition policy and monopoly control one, in which competition and mono poly control law forms an important part of competition policy. In addition, based on the analysis results and situation assessment as well as reference to experience drawn from some countries in the world, and changes of the global environment;...

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Nội dung Text: Doctoral dissertation: Improving the competition and business monopoly control policy in Vietnam in the context of international economic integration

1 2 INTRODUCTION in order to create a fair, equal and efficient business and competitive environment and implement international commitments. So, it is necessary 1. Reasons to choose the topic to depend on content and criteria of analysis to review, evaluate the Competition is the classic nature of the market economy, is the driving policies, and propose contents which require amendment or supplements in forces behind the socio-economic development, bringing about numerous order to improve these policies in Vietnam. benefits to the customers. But monopoly is a form of market structure From the overall objective, I have defined detailed objectives of my which is formed by many different causes and has impacts on the whole study: (i) Analyze and evaluate policies having direct impacts (through society and prevent competition, etc. legal institutions and regulations) and policies having indirect impacts (for In order to maintain competitive environment and overcome the support or protection) through such policies as tax, anti-dumping, import limitations of monopoly, role of the State through a system of competition and export and State credit, etc. on competition and monopoly control in policies and laws on monopoly control is very important and crucial. order to fulfill the objective of promoting role of the State in creating an In recent time, the system of such policies in Vietnam does not environment of free trade, free competition, non-discrimination which is properly reflect laws of movement of the market economy. It still contains the fundamental principle of competition and (ii) Introduce lessons learned patches, inconsistencies, passive responses and follows the “real arising from some countries to Vietnam. problems”. In particular, in the current context of increasingly deep In order to achieve the above objectives, following issues are required globalization and international economic integration, there are still many to be included in the study: problems relating to the current system of competition and monopoly • What are competition policy and competition law? Their control policy on Vietnam. relationship? From this situation as well as its urgency and topicality, I decide to • Institution of competition and monopoly control policy? Why is carry out my doctoral dissertation on “Improving the competition and competition law the most basic and important component of the business monopoly control policy in Vietnam in the context of competition policy? international economic integration”. • Fundamental basis and basic content of competition policy and competition law? 2. Purpose of the study • Which criteria are used to analyze and evaluate the competition and On the basis of synthesis and clearer interpretation of the relationships monopoly control policy in Vietnam? between competition and monopoly, between competition policy and • What is the suitable level for State’s intervention for adjusting monopoly control one, in which competition and monopoly control law competition and monopoly control? forms an important part of competition policy. In addition, based on the • Why is it necessary to form and maintain a fair and efficient analysis results and situation assessment as well as reference to experience competitive environment? What to do? What is the State’s role relating to drawn from some countries in the world, and changes of the global this issue? environment, I would like to propose the State to amend, supplement and • Why is it necessary to amend and improve the competition and adjust a number of sanctions and legal regulations in order to improve the monopoly control policy in the global economy and international economic competition and business monopoly control policy in Vietnam. From these integration? issues, I has defined the overall objective of my study is to promote the State’s role through a system of competition and monopoly control policies
3 4 3. Objects and scope of the study 4. Study method and references (i) Objects of the study (i) Study method • The competition policy with the main approach on its important My dissertation contains following study methods: content and component which is competition and monopoly control law. - Comparative and statistical analysis method • In order to achieve the above objective, the object of the study is an - Systematic analysis method overall analysis and assessment of competition and business monopoly - Qualitative and selective inheritance method control policy in Vietnam will real evidences taken from manufacturing - Diagram and graph method (charts) and service sectors. The study will approach and consider the issues under - Unique study methods of economics: marginal and optimal selection the perspective of competition policies, i.e. consider monopolization, method, positivist and normative method, etc. barriers to market entry and exit, economic concentration level, practices in (ii) Study references restraint of competition and unfair competition. These are important • Documents and policies related to the topic of the study of some content or component of competition policy and competition law. My countries in the region and all over the world. study uses 5 common criteria and component criteria to analyze and • Documents and policies on competition and monopoly control in evaluate the policy, namely (1) Market scope, (2) Restraints in competition Vietnam such as Competition Law, Bankruptcy Law, Decree No. and market entry, (3) Market structure, (4) Current competition institution 116/2005/ND-CP, Decree No. 120/2005/ND-CP, Decree No. 05/2006/ND- and policy, (5) Current competition situation and identification of anti- CP, Decree No. 06/2006/Nð-CP, annual reports of VCCI and Competition competition practices. Management Authority (Ministry of Trade and Industry) and some • Study experience learned from some countries in terms of specialized laws, etc. competition policy and law. Useful lessons for Vietnam. • Scientific summary records, economic magazines and internet. • Some enterprises and economic groups are included and briefly 5. Scientific contributions of the dissertation analyzed in my study as the direct beneficials of competition policy and (i) General contributions of the dissertation law, contributing to the improvement of the policy. Contributions of the dissertation are presented in the objectives of the (ii) Study scope study. Following is further interpretation. • Analyze and evaluate the competition and monopoly control policy 1 In order to improve the competition and monopoly control policy, it in Vietnam through the 4 basic contents and 5 criteria as presented above. is necessary to continue renewing awareness and conception about • Analyze and identify the positive factors contributing to competition competition and monopoly, about the relationship between the State and promotion and restraints of competition, especially ones arising from market, avoid restraints in competition and fostering monopoly. regulations, institutions and policies of the Government. 2 The market economy will operate in accordance with its rules and • Evidences taken from 2 manufacturing and service sectors of cement mechanisms, without any impact on the role of the State. The State still and petroleum in Vietnam will be included in the study. plays an important role in creating the environment and regulates the behaviors of the economic agents through legal regulations on competition • Situations, figures and periods included in the study are taken during and monopoly control. 4-5 recent years, especially after the international economic integration and 3 Reasonably solve the relationship the level of the State’s adjustment after Vietnam officially became the 150th member of WTO. between maintaining competition and restraining monopoly, eliminating monopoly. There is no presence of monopoly in a competitive environment.
5 6 4 Experience of other countries in terms of design, construction, growth. This is the potential factor leading to an establishment of a market operation, amendment and supplements of competition policy and law, dominance and impact on the competitive environment. Therefore, in my monopoly control and anti-monopoly law is useful lesson and reference for dissertation, I recommend controlling the economic concentration through Vietnam. institutions and legal regulations should be the most important component of (ii) Specific contributions of the dissertation the competition policy. 1. The dissertation has found out that in the contemporary 5. With the new trend of current integration and development, in the economy and globalization which contains the development of the “Digital dissertation, I recommend: The State should make a change in the direction economy” and of “flat world” whose key element is establishment of the of reducing the function of “State doing business” and strengthening global supply chain and changes in the market structure, there are two kinds “Welfare State”, “Legitimate State”; implementing and “imposing” of markets: competitive market and non-competitive one. The competitive competitive market to all enterprises, including SOEs to ensure an fair market consists of for-profit businesses while the non-competitive market “playground” and effectively use all social resources. consists of non-profit businesses and ones which are established under the 6. In order to create and maintain the fair competitive environment, in “Blue Ocean Strategy”. the dissertation, I recommend the State to make a simultaneous application 2. The dissertation has analyzed and made some recommendations: in of both types of policies: the policies of direct impact through institutions order to create and maintain a competitive environment, it is required to and legal regulations, and the ones of indirect impact such as tax, import and control monopoly, implement legal regulations, sanctions and measures of export, anti-dumping and credit, etc. in order to support or protect the the competition policy whose most important component is competition law domestic enterprises. which is a Code of the State consisting of civil and criminal regulations in 7. Based on the experience in construction of model of competition order to prevent anti-competition practices. Only by that, the equality, non- management authorities of some countries, the urgency of real operation in discrimination, free trade and competition are ensured, because they are the Vietnam, especially settlement of violations of competition law which contains nature as well as the fundamental basis of competition policy and several shortcomings, overlapping, takes long time and have low efficiency, in competition law. the dissertation, I recommend: merging 2 current competition authorities 3. The competition policy and other economic policies have an (Vietnam Competition Authority and Vietnam Competition Council) into one interdependent relationship, “no policy is a separate island”. The single competition authority (the National Competition Commission which is interdependent relationship has impact on the economic operation and under direct management of the Government) which occupies a higher legal competitive environment. So, I recommend: it is necessary to carry out a position and corresponds to its assigned functions and tasks. scientific analysis and assessment of competition policy, including relevant 6. Structure of the dissertation policies before and after the policy is implemented, in order to ensure its In addition to the introduction, conclusion, table of contents, consistency and efficiency; and also overcome the shortcomings, appendices and references, the dissertation consists of 4 chapters: overlapping, patches and following of the “real situation” the policies. In the Chapter 1: Overview of the research dissertation, I also recommend: improving and adding common criteria, Chapter 2: The basic theories on competition and monopoly control policy component criteria and auxiliary criteria which should be used together in Chapter 3: Situation of competition – monopoly and adjustment analyzing and evaluating the policy. policies in Vietnam 4. In the current context of global economy, there appear many changes Chapter 4: Viewpoints and solutions for improving the competition after the financial and public debt crisis. Mergers and Acquisitions (M&A) and business monopoly policy in Vietnam in ASEAN and Vietnam have been enjoying a strong development and
7 8 CHAPTER 1. OVERVIEW OF THE RESEARCH I also propose 5 issues for further study: 1 Competition and monopoly control policy should indicate changes The chapter 1 consists of 3 parts: (i) research objectives, (ii) in viewpoints and meeting the specified requirements and objectives; 2 Classification of researches based on forms of publication and (iii) Overall No attention to raising opponent comments to the policy, conducting a assessment. Here is the basic content: scientific analysis and assessment of the policy before and after its Overview of the research is the summary, assessment and comparison implementation; 3 Use of common criteria and component criteria in of research works relating to the topic of the dissertation so that I could combination with other relevant factors to analyze and evaluate the policy; identify “gaps” and “missing” questions for study. Accordingly, I have 4 Settlement of violations of competition law, and 5 “Characteristic” classified the research works into 3 main categories: (1) reference books / settlement of monopolies in Vietnam still contains several disputes. monographs, (2) Annual Reports of ministries / sectors, and (3) Summary reports, magazines, and scientific works. Based on analysis and assessment of above types of works, I have concluded that: (i) Despite different approaches of works, they share the same CHAPTER 2. BASIC THEORIES ON COMPETITION AND criteria of assessment and show the nature of competition and monopoly; (ii) MONOPOLY CONTROL POLICY the research works contain consistencies between theories and practices, shortcomings and restraints in competition and monopoly control, anti- Chapter 2 consists of: (i) Competition and monopoly, (ii) Law on monopoly; (iii) competition law mentions 3 main issues: 1 abuses of market competition and monopoly control, (iii) Role of State Management dominance, 2 competition restriction agreements, and 3 regulation on Authorities in competition and (iv) experience of foreign countries and control of economic concentration level. Position of competition laws in the lessons for Vietnam. This chapter presents the following major contents: competition policy is shown in the following model: nature, criteria for competition classification and impact of competition. Competition is a classic issue, a property and a rule of the market Competition > Trade and protection Policies affecting economy. In the contemporary market economy, there are two kinds of policy applied to > Trade policy competition a specific markets: there are two kinds of markets: competitive market (consisting of > Intellectual property sector/market competitive enterprises) and non-competitive one (consisting of enterprises of public benefits, enterprises of social security and ones formed under the > Consideration for merger “Blue Ocean Strategy”). Competition and monopoly have a causal inverse > competition restriction COMPETITION agreements LAW relationship. Dispite of causes of its establishment, the monopoly has > Abuse of market negative impact on the whole society and customers as well. Therefore, Regulating Vietnam and many other countries all over the world consider anti- rules > Protection by the State monopoly and monopoly control the most important task of their States. The > Natural monopoly > Sensitive industries important and effective legal instrument for the State to carry out their task is competition and monopoly control policy because the competition law is law of anti-monopoly and competition maintenance. There will be no Business’ behaviors Market structure Socio-economic policies
9 10 presence of monopoly in a competitive environment! In terms of theory, I Its indirect impacts are indicated through such policies as tax, anti-dumping, have presented 4 main contents and 5 common criteria as well as the import and export and state credit, etc. in order to support and protect component criteria to analyze and evaluate the competition policy in order industries and enterprises in Vietnam. to ensure high consistency, logic and accuracy. In terms of organization, the From the above content and issues, I would like to present here my specific assessment (strengths and limitations) in policy implementation as state management authorities must be organized in an independent, following: professional manner. They should occupy a high legal position which 1 Awareness and conception corresponds to their function and responsibilities and should be operated There is a change in awareness and conception about the operational under the direct management of the Government. They also should be rules and mechanisms of the market economy and the fundamental provided with sufficient conditions for well operation. Lessons learned from principle of competition is non-discrimination, free competition, free trade, other countries, especially those which share similarities with Vietnam free market entry and exit. We also see the role of the State through a defined in this chapter are a very useful reference for Vietnam. system of competition policies and laws on monopoly control, as well as enterprises – its beneficials. Total number CHAPTER 3. SITUATION OF COMPETITION – MONOPOLY of enterprises 700 AND ADJUSTMENT POLICIES IN VIETNAM 622.977 600 544.394 This chapter consists of: (i) situation of competition and monopoly, (ii) 500 Situation of competition and monopoly control law and (iii) Overall 455.207 assessment of competition and monopoly control policy. 400 370.676 This chapter primarily aims to provide an overall assessment of real 305.358 290.767 situation of competition and monopoly; the implementation of the competition 300 246.451 248.757 and monopoly control policy after 6 years since the Competition law became 199.788 205.689 effective (July 1, 205) in Vietnam. 200 155.771 131.318 112.95 The above criteria and content have been used to conduct the analysis 100 and assessment of the situation. Here, I specially base on number of Year enterprises (market size), identification of positive factors promoting 0 competition as well as restraints in competition arising from legal 2005 2006 2007 2008 2009 2010 2011 regulations, institutions and policies made by the Government, economic Total number of registered enterprises Total number of operating enterprises under survey of GSO concentration level and monopolization, restraints in market entry and exit, unfair competitive practices, etc., which means a identification and Source: - General Statistics Office and Agency of business registration assessment of direct and indirect impacts of the polity on competition and - Vietnam enterprise annual report - VCCI in 2011, page 22 monopoly control. The policy has direct impacts on competition and Figure 3.1: Total number of registered enterprises and operating prices monopoly control through regulations and sanctions of the competition law. as at December 31 of years from 2005-2011
11 12 The figure 3.1 shows that there are a large number of enterprises with competitive practices have impacts on legal rights of other economic agents high potentials for competition in the Vietnam market, and accordingly, the and the society. Following are some typical examples of unfair competitive competition among competitors have become increasingly fierce and practices which have been settled by the Competition Law (from Article 40 to aggressive. However, from such competition, there happen numerous Article 49). Specifically, in 2006: 1 case; 2007: 5 cases; 2008: 13 cases; 2009: unfair competitive practices in the Vietnam market. 14 cases and 2010: 28 cases. In which 46/63 cases have investigation was 2 Policies of direct impacts initiated by the Vietnam Competition Authority and 15/61 cases have (i) Legal regulations on competition restriction agreements investigation based on complaints from enterprises, including 21 cases Although the competition restriction agreements have been specified relating to advertising; 17 ones relating to illegal multi-level sales; 6 cases in the Competition Law; Decree No. 116/2005/ND-CP detailing the relating to promotion; 4 ones of misunderstanding instructions; 1 cases implementation of a number of articles of the Competition Law and Decree relating to business disruptive practices, etc. No. 120/2005/ND-CP on dealing with breaches in the competition law, (iii) Legal regulations on abuse of market dominance and monopoly etc., many breaches still appear in the market. 3 cases relating to “price In 2009, the Vietnam Competition Authority conducted eight maintenance agreements” in the automobile physical damage insurance investigations concerning abuse of market dominance/monopoly position, market, roof plate market and student insurance market are typical in which only one was realized in accordance with regulations of examples. Relating to the competition restriction agreements, there are competition law. Its main reasons are competition authorities, awareness of some regulations which are just inflexible principles, do not approach the enterprises and regulations of the Competition Law. anti-competition nature of the case, especially sophisticated ones made by A typical example of this behavior is the dispute on fuel price between the enterprises. Specifically, Article 9 of the Competition Law is the Vietnam Air Petrol Company (Vinapco) and Jetstar Airways Pty Ltd. unreasonable. Normally, any agreements on price fixing, market division, on April 1, 2008 which was settled by the National Competition Council output restriction and auction collusions which always contain anti- with the final conclusion: Vinapco was fined for more than 3.3 billion competition should be prohibited and not be exempted. But in fact, there is VND, but there have been several controversies around the dispute. Its no regulation on such agreements, leading to many difficulties in direct cause was that the two parties reached no agreement in fuel price. settlement. By law, such agreements are prohibited only the combined Vinapco stopped providing petroleum to Jetstar Pacific, leading to its non- market share accounts for 30% or more, but in fact, many cases in which operation, and then Vinapco accused Jetstar Pacific of not paying for the combined market share accounts for less than 30% still leads to an petroleum and forcedly stopped its supply of petroleum. In addition, there increase in price and price maintenance. So, how to settle the situation is are many other cases relating to movies distribution and showing, very difficult? telecommunications, electricity, cement and so on. (ii) Legal regulations on unfair competitive practices. Due to inconsistency, patches in the competition mechanism and policy of Vietnam, the market is still affected and driven by law of value, law of supply and demand and law of competition. Therefore, any unfair
13 14 In recent years, some industries have had vibrant M&A operation: 3 2.25 industry, energy, finance and banking, materials, consumer goods and fast 1.88 2.00 moving consumer goods, etc. 2 Table 3.1. Industry-based M&A in Vietnam in 2011 1 In which In which Number Value (million USD) Total Minority Majority of cases Acquisition Merger 0 shares shares TeTechnology Inf rastructure dev elopment in the Deep access and output of the operating sector and area hav ing production process Financial Services 1,588 72 197 1,391 779 808 impact on competition Bank 1,562 10 889 673 953 609 1. Low 2: Medium 3: Relatively high Food and drinks 1,242 26 283 959 1,242 0 Figure 1/Appendix 2: Natural barriers in the cement industry Technology 475 22 152 323 425 50 Essential services 304 16 289 15 304 0 (iv) Legal regulations on economic concentration level Construction and materials 236 28 71 165 236 0 Personal and household goods 226 14 12 214 226 0 According to the Competition Law, the basic content for analysis and Travel and leisure 217 14 4 213 131 86 assessment of economic concentration level is enterprise merger, Health Care 118 10 15 103 118 0 consolidation, acquisition, joint venture and associations. Following is the Basic Resources 116 12 113 3 116 0 real situation of economic concentration in Vietnam in 2005 - 2010. Insurance 93 1 93 0 93 0 Chemicals 31 2 31 0 31 0 Generally, this operation has been growing in number, value and scale. Industrial goods and services 29 28 25 3 29 0 Oil and Gas 12 2 12 0 12 0 Retail 8 6 8 0 8 0 Communications 2 3 1 2 2 0 6,259 266 2,195 4,064 4,705 1,553 Source: Report on Vietnam economic concentration in 2012 – Vietnam Competition Authority – p.13 Together with M&A, in Vietnam, there are many companies announcing or advertising their large market share of their products. However, there are still many limitations in Competition law in economic concentration: no mentioning of economic concentration control in both vertical and mixing directions; no regulation to empower the Vietnam Competition Authority to build the verification content, inform and exemptions of economic concentration and no economic concentration control regulations; Figure 3.2. Number and value of M&A in Vietnam no regulation on combination of economic concentration control procedure and (2003 – 1st quarter/2012) procedure of state management over business and investment registration; no Source: Report on Vietnam economic concentration in 2012 – Vietnam regulation on combination between the control authority and State Competition Authority – p.11 management authority over the economic concentration, etc.
15 16 3 Policies of indirect impacts 4 Overall assessment of the situation The policies have indirect impacts in order to support or protect the (i) Strengths implementation of the competition and monopoly control policy, ensure The initial success of Vietnam is that it has already had its own and maintain the fair and equal competitive and business environment. competition law (2005) - an important component of competition policy. They include: price and output regulating policy; SOE adjustment and restructuring policy; tax and anti-dumping policy; import and export policy It is a legal instrument to regulate competition and control monopoly, and state credit policy, etc. These are macro policies which have positive containing the following contents: impacts and significant contributions to implementation of the competition • Confirmation of persistent existence of the multi-sector and monopoly control law to stabilize the market, maintain competition commodity economy operating under market mechanism. and continually improve the quality, performance as well as • Free trade and investment, free competition and non- competitiveness of enterprises and the whole economy as well. discrimination. Table 3.2 Percentage of real and nominal protection of exportable • All economic agents are equal to law. goods under impact of integration commitments (%) • Acceptance of legal profitability of the enterprise. Agriculture, Mining, Manufacturing Average • Respect of interests of the State, public interests, legal rights and Year aquaculture combustible gas Real Nominal Real Nominal Real Nominal Real Nominal interests of others. 2001 7.43 6.28 16.39 8.91 95.97 25.28 58.46 17.92 • Competition law is the law of monopoly control, anti-monopoly 2003 12.52 11.06 -0.03 3.55 43.94 29.23 24.87 18.20 and competition maintenance. All unfair competitive practices such as 2005 7.40 6.10 4.39 3.85 40.38 19.45 21.43 11.12 2006 6.42 5.37 4.33 3.84 38.93 18.69 20.43 10.53 speculation, dumping, disparaging, preventions, engagement, bribing, 2007 6.20 5.17 4.38 3.84 31.21 15.25 16.93 9.04 threatening, labeling violations and intellectual property rights are prohibited. 2008 5.50 4.72 4.41 3.84 29.58 14.45 15.97 8.54 To control the abuse of market dominance and monopoly position; control the 2009 5.00 4.39 4.43 3.83 28.00 13.71 15.10 8.11 practices in economic concentration to make profit, prevent competition and 2010 4.59 4.13 4.45 3.83 26.78 13.14 14.41 7.78 2015 3.51 3.25 -0.29 0.17 21.14 10.65 10.57 5.64 have negative impacts on the market. 2020 3.36 3.11 -0.32 0.13 20.76 10.30 10.34 5.43 * Legal regulations on a number of business sectors: Source: [43. p.102] • Production and trade in counterfeit goods. Table 3.3. Percentage of real support of some key exports of Vietnam (%) • False advertising or advertisement containing any comparison 2005 2006 2007 2008 2009 2010 2015 2020 which has negative impacts on others. Garments 134.19 135.70 58.02 58.44 57.72 57.48 58.26 57.83 • Violations of industrial property rights, intellectual property rights. Leather Products 100.75 95.57 102.80 91.75 80.91 73.60 52.58 53.09 • Settlement of restraints in competition in securities and Plastic products - 59.47 59.10 53.40 47.55 42.49 25.93 25.45 securities market. Processed seafood 50.37 42.51 40.73 33.77 28.66 23.52 15.84 16.17 Source: [43.p.105] • Bidding regulations and prohibition of negative collusion in
17 18 bidding. • The monopoly management and control mechanism is mainly done (ii) Limitations through such policies of tax, price and output control. But in our current * In terms of mechanism of application of law: context, there is no tax policy to apply to monopolistic enterprises and • There are still shortcomings in a number of legal factors and monopolistic products. Monopolistic price control is heavily administrative institutions; some patches, overlapping, incompletion, inconsistencies, with numerous inappropriate contents which should be added and improved. shortcomings in general and following the “real situation” still contained in The fundamental basis for increasing price is production cost, but it is not the framework law and laws of each ministry/sector (law on enterprise, clearly and transparently interpreted, resulting in a low persuasion. investment law, law on import and export, Law on finance – banking, As regulated, for monopolistic goods and services, the State must take bankruptcy law, etc.). Settlement of some cases in the market is still control and regulation over their prices, not all “losses” are allowed to passive and is just for the situation, not a general settlement. require an increase in price. Of course, during recent time, the State has • Impact of the competitive environment always consists of two implemented the limited monopoly pricing policy in such industries of sides: positive and negative. Many enterprises still exist, but many others cement, petroleum, etc. In economics perspective, they are not goods of become bankrupt. There are still many missing issues in the Bankruptcy pure monopoly (complete monopoly). During their production and trade, Law concerning to procedure as well as issues to be settled, especially such goods still contain many competitive elements, despite their very those relating to the employees, finance, society, environment, method and weak competitiveness. authority of settlement; rights and liabilities of enterprises, intervention and Thus, purpose of monopoly price control is to regulate monopolistic authority of state agencies. Some SOEs which make losses and are on the enterprises, ensure social justice. But the control is not really effective. edge of bankruptcy hardly apply the regulations on bankruptcy, but often • There is no specific and clear legal regulation to adjust and settle change their business forms in which the most popular are merger, joint restraints in competition and monopoly control. Therefore, it is difficult to venture, associate with other enterprises of the same ministry or sector. define the specific results of law application. While if the private enterprises fall into the same situation, there is no way • Some regulation indicates an excessive concern and intervention of for them rather than bankruptcy. This is also an illustration of monopoly the public authorities in business, operation and management of power [74]. enterprises. • Legal violations are settled against their nature in accordance with • The countries also have many forms of ownership, many economic the legal regulation of each law without being fully based on their purpose sectors (including state ownership), but the difference in their business of unfair competition. Therefore, only practices which are defined illegal legal framework is not as big as in Vietnam. get sanctioned, leading to an omission of unfair competitive practices due * Regarding shortcomings in implementation of laws and settlement to a lack of legal basis for settlement. Or if such unfair competitive of violations practices are detected, they only get a simple administrative sanction, • The current settlement and investigation on responsibility of lacking educability and deterrence. producers and salespersons of counterfeit goods. All of consequences of
19 20 producing and selling counterfeit goods have not been completely solved. CHAPTER 4: VIEWPOINTS AND SOLUTIONS FOR IMPROVING • There is no legal regulation to protect the owners of goods THE COMPETITION AND MONOPOLY CONTROL POLICY IN VIETNAM which are made counterfeit and customers of counterfeit goods. • Almost copyright infringements and advertising violations are Chapter 3 consists of: (i) Economic integration and arising issues for settled at the simple administrative management level, lacking educability improving the policy, (ii) Viewpoints for improving the policy and (iii) and deterrence. Solutions for improving the policy. • Business monopoly control is mainly done through the price Following is the basic content: control policy and mechanism. Currently, there is no complete tax policy From brief introduction of the context of the global economy as well applicable to monopolistic enterprises and monopolistic goods. The price as economy of Vietnam, the trend of globalization and international control mechanism is just for administrative management and inefficient. economic integration as well as its impact on the Vietnam economy in • Settlement of violations faces many difficulties, partially terms of: advantages – disadvantages, opportunities – challenges, positive because of some certain shortcomings and limitations in legal regulations – negative, etc. Based on the content of chapter 2 and 3, I would like to propose some issues to improve the competition and monopoly control on competition and monopoly control, partially because the current policy as following: function, power and legal position of the State competition agencies • In the context of international economic integration, the greatest (Competition Council and Vietnam Competition Authority) does not pressure for Vietnam is a competitive environment at all levels: nation, correspond to their assigned tasks, they lack fund for their operation while enterprise and product, followed by pressure of cost reduction and their operation lacks professionalism. localization (high adaptability in local market). Vietnamese enterprises will enter an unequal competition with foreign invested enterprises which have strong economic potentials and great experience in the market. • In the context of integration and globalization, the competition law and policy as well as the monopoly control law of Vietnam must comply with the international law. The advantages and disadvantages of business and competition must be carefully considered and studies in the global scope and environment, in the value chain, ensure benefits of ourselves as well as of the whole society. • The competition law is the anti-monopoly and competition maintenance Act. So, any violations of the competition law should be treated with strict penalties (administrative fines, civil or criminal punishments). Also, in the chapter 4, I have presented 5 viewpoints and 5 solution groups to improve the competition and monopoly control policy, namely:
21 22 (i) Viewpoints for improving the policy: (1) Compliance with policies. For example, it is required to clearly define the boundary viewpoints, guidelines and strategies for socio-economic development of between prohibited behaviors, exemptions and clemencies; between the Party and State; (2) Compliance with the market principles and behaviors of heavy sanctions and those of soft sanctions, etc. international commitments; (3) Ensuring rights of free trade and free (ii) Solutions griups for policy improvement: (1) Complete, amend, competition, non-discrimination; (4) Ensuring efficiency and legal interests supplement and specify regulations of competition law: applicable to abuses of customers; (5) complianace with the business culture and ethics of of market dominance/monopoly position, competition restriction Vietnam. agreements and unfair competition, economic concentration level, and Renewal of awareness and conception must be indicated throughout monopolistic price control; (2) promote the role of the State, creating the the State management system, administrative reform, organization, consistency in policies in order to improve the market structure and reform working style as well as behaviors of public authorities. The competition SOEs empowered for monopoly and restructure SOEs. law develops based on the international relationships and economic Figure 4.1. Some efficient solutions for SOE restructuring development process, so, in order to improve and implement the Share strenthening 87 competition and monopoly control policy in Vietnam, it is required to Improvement of operational transparency 87 ensure: Conduction of several independent audits 86 • Addressing the relationship between the dominant role of the Regulation strenthening 83 state economy and requirement of ensuring the fair and equal business Stop of Government’s assistance 65 Termination of land preferentials 60 competitive environment, between monopoly control and anti-unfair Termination of bank’s preferential loans 56 competition and specialized law upon adjustments of law. Government’s guarantee stopped 56 • Based on the experience and the implementation of some 0% 20% 40% 60% 80% 100% countries in the world as well as the real situation of Vietnam to improve and Positive impact No impact Negative impact Unknown implement the competition law, monopoly control, anti-unfair competition in Source: Summary from VCCI’s survey and business forum (Investment newspaper compliance with the current socio-economic and political conditions of issued on April 16, 2012) of Dr. Nguyen Dinh Cung – Deputy director of Central Vietnam. However, we must also learn from foreign countries in their strict, Institute for Economic Management. equal and public manner to treat violations of competition law, creating high (3) Enhance the efficiency of the environmental analysis and forecast educability and deterrence. as well as the competitiveness of the economy; (4) Improve the State • Consistency throughout the system of economic and business competition authority in accordance with the model of centralized, policies. independent and professional organization to achieve a greater legal • Legal regulations and institutions issued by the State must be position which corresponds to its assigned function and task. As such, I clear, coherent and close to the reality. would like to recommend the State to establish the National Competition • Validity of legal regulations and institutions must ensure Commission by merging the Vietnam Competition Authority and consistency in regulating business behaviors. It is necessary to limit and at Competition Council and (5) Other solutions such as strengthening links in best, eliminate all exceptions in order to ensure equality among business the supply chains of industries; promoting role of Associations; developing agents belonging to all economic sectors upon implementation of such supporting industries and services, etc.
23 24 CONCLUSION criteria to conduct an analysis and assessment of policies which have direct or indirect impacts on the business and competitive environment in Competition and monopoly are two opposite extremes and have causal Vietnam. I have also identified the limitations and shortcomings of the relationship in the market structure. A fierce and aggressive competition policies. Accordingly, I have recommended conducting an analysis and without the State control will result in accumulation, concentration and providing opponent comments on the policy in a scientific manner before then leading to monopoly, or monopoly is the inevitable consequence of and after its application. competition. In contrast, monopoly without the State’s control will prevent (iv) In order to create and maintain the competitive environment, I have or even eliminate competition, changing the market structure and recommended 5 viewpoints and 5 solution groups for improving the correlation, having negative impacts on the society and customers. So, competition and business monopoly control policy in Vietnam. In which, “improving the competition and business monopoly control policy in it requires the State agencies in policy making and management to change Vietnam in the context of international economic integration” is the topic their awareness, visions and guiding thinking. It requires connecting the to promote the role of the State through policy instruments, in order to institutions and policies with the global market and environment, with the create and maintain the fair and equal competitive environment among international commitments; respect business freedom and autonomy, and economic agents in the domestic, regional as well as international markets. legal interests of the customers. It also requires improving the This is the topic to analyze and assess the policy with combination of organizational model of competition management agencies based on theory and practice not only in the coming time but also in the process of merger of the Vietnam Competition Authority and Competition Council globalization and international economic integration of Vietnam. into the National Competition Commission operating directly under the The dissertation has made some scientific contributions and has Government, in order to achieve a greater legal position and power which achieved some major research results as follows: correspond to its assigned function and task. (i) The dissertation has provided an overview as well as a clear (v) Implemetation of above chanes and contents will lead to interpretation of the theoretical issues of the competition and monopoly changes in the market structure and relationship, the situation as well as control policy. In which, the competition and monopoly control law is an nature of the competition and monopoly. Finally, the State will be able important component of the competition policy. The dissertation has to create and maintain a fair, equal competitive environment, identified the changes and development of the market structure in the contributing to renewing the growth model, increasing the quality, context of globalization with existence of 2 markets: competitive and non- efficiency and competitiveness of the enterprises and the whole competitive. The dissertation has also clearly confirmed and interpreted economy as well. that the nature of the competition policy and competition law is act of anti-monopoly, monopoly control and competition maintenance. So, there is no presence of monopoly in the competitive environment. (ii) From experience of some countries in the worlds in planning and implementing their competition and monopoly control policy, the dissertation has presented 6 useful lessons for Vietnam with 3 major criteria: increasing social welfare for customers, protecting competition process and increasing efficiency of the economy. (iii) I have developed and used some common criteria, component