A Comparative Analysis of Market Definition in Antitrust Law and WTO Law: Some Suggestions for Vietnam45283

Among these rules and principles, market definition concept or relevant market is such a crucial issue in international economic laws, including antitrust competition law and WTO law.. F

A Comparative Analysis of Market Definition in

Antitrust Law and WTO Law: Some Suggestions for Vietnam

Phuong T M Tong (1) ; Nghia Van Tang (2)

(1) VNU University of Economics and Business, Vietnam National University, Hanoi, Vietnam

(2) Foreign Trade University, Hanoi, Vietnam

* Correspondence: phuong.tong.m15@wti.org

Abstract: Market definition is an important issue in both antitrust law and WTO law Through

comparative analysis approach, the author would like to answer the following research questions: How does the assessment of market definition’s method of determination in WTO and antitrust law suggest an interaction between two legal contexts? And how can we apply the research’s findings to complete the legal framework on competition in Vietnam? The result shows that there is content interconnection between antitrust law and WTO law in terms of market definition, also the consequences on the rule systems, methods, functions, scope of influence of market definitions, and elements to define it, together with some detailed implications for Vietnam

Keywords: Market definition; international economic law; Vietnam

1 Introduction

1.1 Research Rationale

Competition exists in every aspect of human beings such as economics and business, within a specific scope of country among enterprises or broader stages such as international market among countries It brings both beneficial and detrimental effects to the participants

in it Competition acts as catalyst for improvement of production and trade, advancement

of technology and growth of a country’s economy On the other hand, some negative effects

of competition have been witnessed such as resource depletion, environment pollution, the wealth gap, market distortion It is necessary to have rules and principles to protect and embrace the competition process in order to promote economic efficiency and maximize total welfare Among these rules and principles, market definition concept (or relevant market) is such a crucial issue in international economic laws, including antitrust (competition) law and WTO law

Particularly, the requirement of market definition, which is indispensable basis for the assessment and evaluation of market power used by entities and its consequences to the market, supports the purposes of antitrust law Antitrust law aims to control the conduct of restraining competition in the market by the market players For developed countries with market economy, antitrust law is essential to protect and maintain the process of

competition as well as environment for competitive conduct Primarily, for WTO members, market economy condition is required to ensure a fair stage for all members Therefore, for

a developing country such as Vietnam wishing to access to WTO, market economy is clearly

an important subject to discuss Thus, market definition will be the momentum to nurture and foster the market economy

While market definition plays an important role in Anti-trust law, it remains a notable issue in WTO law In fact, market definition, which is indirectly mentioned in WTO, without systematic rules and regulations, is scattered in different agreements Its existence

is aimed at constructing and implementing international trade policy together with applying trade remedies fairly Specifically, WTO law makers and arbitrators define relevant market through theory of “like products”, “directly competitive or substitutable products” and “like services and services providers” in order to apply principles of treatment, dispute settlement and rules on market access or unfair trade among WTO members Furthermore, market definition in WTO law is in close relation with basic principles of competition law due to the fact that WTO approaches competition topic in international trade through examining whether concerning products or services, practically

or potentially, are in competition relation or not It is clear that through defining relevant market, WTO will have a base to better apply its policy and rule system to solve different international trade’s issues

Regarding the vital roles of market definition under the light of WTO law and antitrust law, it is crucial to have a deeper analysis and assessment of this concept, concerning certain period of interaction and close relation between two legal systems Therefore, understanding and examining the strengths and weaknesses, in theoretical and practical aspect, of the notion of market definition are necessary for later application to international and domestic economic policies among countries, and practical suggestions for Vietnam, for purpose of better integration into the global economy This research is conducted to support the mentioned purpose

1.2.1 Concept of market definition

Market definition – Relevant market concept in competition law

In competition law, “market definition” or “relevant market” is a core subject for its essential existence Its important meaning derives from the fact that competition law was born to protect the process of competition which is vulnerable under the abusive use of market power by the players in the market In order to protect the competition process, the

law need to determine which level of market power is subject to the restriction The question

is by what method market power should be assessed and evaluated in practice Market power and competition exist in a certain market which is relevant market or market definition Therefore, defining relevant market is necessary for assessment of market power Theoretically, it is desired that, in all cases, market power level of a specific firm can be directly measured and how much it can extend its market power Several developed modern econometric techniques allowed direct assessment of market power such as Elasticity of Residual Demand by Baker and Bresnahan (1985, 1988) or Logit models by McFadden (1973) (Motta 2004, p 27) Nevertheless, in various situations, these techniques are difficult to use

as being impractical and lacking of necessary data

Numbers of definitions related to market definition have been given Recognizing its important roles, authorities from different legislations have provided definition for the terms

The EU gives clear and separated definitions for relevant product market and relevant geographic market in The European Commission Notice on the definition of relevant market for the purposes of Community competition law, Official Journal C 372, 09/12/1997 P 0005 – 0013 (EC’s Notice on Market Definition) It also clarifies that under circumstance of assessment of a given competition issue, the relevant market is considered

as such a combination of the product and geographic markets

In the US Horizontal Merger Guidelines 1992 version (firstly developed in 1968), definition of relevant market is described as a product or group of products and a geographic area in which it is produced or sold by a hypothetical profit-maximizing firm, probably would impose at least a small but significant and non-transitory increase in price, proposed that the terms of sale of all other products are remained constant Then, a relevant market is ‘a group of products and a geographic area that is no bigger than necessary to satisfy this test.’ The definition is much related to the SSNIP test, a method to define relevant market to be examined in later part of this research

Definition of relevant market was also provided in Vietnam Law on Competition The Law denotes that relevant market consists of relevant product market and relevant geographical market, then gives separated definitions for them in a similar way to the regulations of the EU law (Art 3 – Vietnam Law on Competition)

As we can see from these above definitions of relevant market, normally relevant market involves relevant product market and relevant geographical market In competition law, market definition is only reviewed regarding anti-competitive practices, not unfair competitive practices because unfair competition behavior of an undertaking occurs, and has bad effects in the absence of the fact that its goods/services is interchangeable to the

harmful affected goods/services (Murakami 2003, p 5)

Market definition – Relevant market concept in WTO law

Initially, based on the theory of relevant market, WTO law integrates the concept of

“like products”, “directly competitive or substitutable products” and “like services and

services providers” into many agreements as a framework to develop further rules and regulations Furthermore, market definition in WTO law has direct relationship with basic principles of competition law due to the fact that WTO approaches competition topic in international trade through examining whether concerning products or services, practically

or potentially, are in competition relation or not Existing in a competitive environment,

“like products”, which are “like” to each other, under a particular provision of the WTO Agreement and its Annexes, are considered to be in the same relevant market (Gocco 2001,

p 1) “Directly competitive or substitutable products” are believed to be in the same relevant product market if they are bound by the same specific provisions of the WTO Agreement and its Annexes WTO Dispute Settlement Body, Panels or Appellate Body (AB) often engage in market definition when they try to define the concepts “like products”, “directly competitive or substitutable products” and “like services and services providers” in the concerning provisions in the related agreements to apply principles of treatment, dispute settlement and rules on market access or unfair trade among WTO members

However, the Panel and AB only define the mentioned set of notions in a case by case basis Completely and unequivocally categorized schemes have not been undertaken

by the AB in order to set out the rules on market definition

1.2.2 Elements of market definition

Material

Material factor or physical factor or relevant product market is the main element in defining competitive relation among entities This element also helps with determining economic concentration behavior together with the market power of one entity in comparison to other entities in the same market Under physical perspective, the relevant market is understood as market of products with identical characteristics, economic purpose

of the use and price level whereby customers believe that these products can meet certain requirements of them as these products can be compared with each other and substitutable for each other (Mäger 2011)

Material factor of relevant market in international trade, which is identified as “like products”, “directly competitive or substitutable products” or “like services and service providers”, can be found in the WTO Agreement and its Annexes For example, in Article 2.6 of the Anti-Dumping Agreement (ADA), the material factor is mentioned as follows:

“Throughout this Agreement the term “like product” (“produit similaire”) shall be interpreted to mean a product which is identical, i.e alike in all respects to the product under consideration, or in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration.” This definition is fixed

and may be adverse to the purpose of other broader term such as “like or directly competitive products” which is mentioned without being defined in the Agreement on Safeguards

Physical factor plays a decisive position in defining relevant market in specific case Space

Normally, products/services are sold, provided in a defined market within a certain geographic area In competition law, geographical factor of relevant market (or relevant geographic market) is a homogenous geographic area of products (in the relevant product market) whose distribution methods are carried out in a normal way, witnessing a competitive relation among products being interchangeable to each other under the demand side perspective In WTO law, regarding the international trade among countries, it is also true that each product or service being sold or provided might be in a defined geographic area and in a competitive relation with other products or services from other country Actually, the geographical factor is not directly referred to, but its appearance can be found

in trade agreements For example, geographic element in article 2.1 of the ADA can be

“product” in importing country to be in comparison with “like product” being destined for consumption in the exporting country In case, the existence of sales of “like product” is not available in the ordinary course of sale in the domestic market of the exporting country, the geographic factor can be changed into a substitution of “like product” being exported to an appropriate third country as stated in article 2.2 of the ADA

Together with the material, the geographic element plays an important role in defining the relevant market

Time

In competition law, among factors of the relevant market, time will be considered and reviewed under the circumstance that the demand or supply only exists in a certain period of time or certain moment In fact, some entities only have the market power in the relevant market in a certain period of time because competition is a continuous process which entities will have to engage to gain the competitive advantages along time (Jones/Sufrin 2011, p 61)

In the WTO law, time aspect of the relevant market does exist but it is not defined clearly in most of trade agreements In the ADA, Article 2.1 - Determination of Dumping

states that: “…a product is to be considered as being dumped, i.e introduced into the commerce of

another country at less than its normal value, if the export price of the product exported from one

country to another is less than the compatible price, in the ordinary course of trade, for the like

product when destined for consumption in the exporting country” Unfortunately, the ADA does

not give a comprehensive definition for the concept “ordinary course of trade” In the US –

Hot-Rolled Steel, the AB claimed that the investigating authority must exclude all sales which

are not transacted “in the ordinary course of trade” from the calculation of normal value The AB accepted a definition provided by the United States Department of Commerce

(USDOC) on the “ordinary course of trade”: “Generally, sales are in the ordinary course of trade

if made under conditions and practices that, for a reasonable period of time prior to the date of

sale of the subject merchandise, have been normal for sales of the foreign like products” Once again,

time factor was mentioned the phrase “relevant time” to refer to “like product” in the

explanation of the AB that: “Where a sales transaction is concluded on terms and conditions that

are incompatible with ‘normal’ commercial practice for sales of the like product, in the market in

question, at the relevant time, the transaction is not an appropriate basis for calculating ‘normal’

value.” Hitherto, US – Hot-Rolled Steel is among the cases which tackled “ordinary course of

trade” issue

As a result, time factor of relevant market is assessed only in some particular cases 1.2.3 And other issues

To some extent, market definition has been reviewed within country scope

As noted in Brandenburger/Matelis, The 2010 US Horizontal Merger Guidelines: A Historical and International Perspective (2011), together with other issues of the 2010 US Guidelines, market definition was considered under similarity relation with other non-US Guidelines regarding “need not to be first step of the agencies’ review” aspect only

Cleary Gottlieb Steen & Hamilton LLP, China’s Anti-Monopoly Commission of the State Council Issues Final Guidelines for the Definition of Relevant Market (2009) provided

a summary of the China guidelines and mentioned that the guidelines were generally in line with the EU and US practice regarding “usually a starting point for competition analysis”, case of restriction of the hypothetical monopolist test and factors for consideration

Especially, in the OECD, Other Titles Series Roundtables on competition policy, OECD Market definition 2012 report (2012), legal issue and actual law applications of market definition in more than 30 different countries were explored and evaluated This policy roundtable’s report provided consensus of countries in several issues such as important position of an analytical tool, challenges in defining relevant market and new alternative approaches for more effective competition policy

Market definition in a broader stage has been substantially reviewed

Defining relevant market in WTO law was notably evaluated by Hudec (2000), Gocco (2001), and Tang (2013) The first and second authors approached the basic WTO theories, principles and the concepts of “like and directly competitive or substitutable products” and “like services and service providers” to examine the definition of the relevant market, the relationship among them, together with economic background and legal applications, and simultaneously proposed some recommendations to the definition and approach to market definition in WTO law The third one discussed the definition of relevant market, related regulations in WTO, and factual situations in defining relevant market, then gave some insightful conclusions and practical suggestions to Vietnam situation

The similarity between determining “likeness” of products in WTO and the product and geographic market definition, a central point in competition analysis of antitrust law, was identified by Janow (2005) Melischek (2013) provided a coherent and comparative analysis of “product likeness” under the GATT (Art III) and antitrust law The author developed an economic approach with a specific substantive economic test to assess the notion of “product likeness” in operational, institutional and procedural framework On a methodological level, the book supplements a new interdisciplinary dimension to the legal discussion by analyzing the use of quantitative and econometric methods for the

implementation of the proposed economic test Also, market definition was considered in the relationship between WTO law and antitrust law on aspect of benefit determination by Rubini (2016) Also, market definition was considered as value reconciliation, a case of renewable energy promotion under the WTO Agreement on Subsidies and Countervailing Measures by Kalimo et al (2017)

Another comparison of the relevant market notion between EC and the US competition laws was performed in Comparison of the Notions of Relevant Market between

EC and the US: What Can China Learn from Both Sides? by Song Xin (2007) with reference

to definition and form of relevant market, together with process and evidence in market definition so as to make proposals to the Chinese legislation

In conclusion, the existing literature has highlighted certain aspects of market definition However, to some extent, a more comprehensive review of market definition has been required to help the policy makers with more effective economic policies and to provide firm legal basis for decisions of dispute settlement body at WTO Furthermore, research on market definition practice in Vietnam should be carried out to propose more practical suggestions to improve the current legal framework situation

2 Methodology

2.1 The Research Question

(1) How does the assessment of market definition’s method of determination in WTO and antitrust law suggest an interaction between two legal contexts?

(2) How can we apply the research’s findings to complete the legal framework on competition in Vietnam?

2.2 Research Model And Hypothesis

The methodology used in this research is comparative analysis approach to point out the

differences and similarities between two legal contexts: antitrust law and WTO law

Through comparing and analyzing the legal texts and cases of antitrust law of different countries and WTO General Agreement on Tariffs and Trade (GATT) and General Agreement on Trade in Services (GATS), the author has the following hypotheses:

Hypothesis 1 (H1): There should be interrelated contents of market definition in antitrust law and WTO law

Hypothesis 2 (H2): The interaction between two legal contexts on market definition may provide suggestions for Vietnam

2.3 Scope Of The Research

Within geographical scope, the research is intended to conduct a general comparison

of market definition issue between WTO law and antitrust law in the world Furthermore, the research will explore the current state “market definition” issue in Vietnam and provides several suggestions and recommendation for improvement the current circumstances

Within time aspect, the research explores the market definition through its development from the past to current situation However, market definition in current practices is strongly emphasized and evaluated

2.4 Developing The Comparative Analysis Process As Follows

Table 1: Stages in comparing process

Stage 1 Addressing market definition in current WTO law and antitrust law

(1) Regulations on set of notions market

definition in WTO law (2) The Theory of Comparative

Advantage (3) The Rules of Non-Discrimination

(4) Annexes of the WTO Agreement

(1) Regulations of the EU (2) Guidelines of the OECD (3) Regulations in particular countries – The US, Japan and China

Stage 2 Functions of market definition in WTO law and antitrust law

(1) A tool to define the boundary of

competitive market (2) A base for further step in antitrust

case investigation (3) An instrument for enterprises to

protect legal rights and benefits

(1) An indirect tool in construction of international trade policy (2) An indirect tool in implementation of international trade policy (3) An important instrument for entities to

protect their benefits

Stage 3 Determination of market definition under WTO law and antitrust law

(1) Basic principles for market definition

(2) Method of determination in different

countries’ law (3) Analysis of market definition in

competition cases

(1) Criteria in determining “like products”

and related cases (2) Criteria in determining “Directly Competitive or Substitutable Products”

and related cases (3) “Like Services and Service Providers”

and related cases

Stage 4 Overview of market definition’s issues

related to Vietnam in WTO law

Overview of market definition in Vietnam

Law on Competition

Source: Authors of this research

(Jackson 1969, p 522) Canada also shared the view on the negative influence which international cartels may make on world trade (Canada DOJ 1945) Chapter V of the Havana Charter of the ITO, containing the subject of restrictive business practices, was response for the prior concerns including a request that members control anti-competitive practices for normal flow of international trade as it stated that “Each Member shall take appropriate measures and shall co-operate with the Organization to prevent, on the part of private or public commercial enterprises, business practices affecting international trade which restrain competition, limit access to markets, or foster monopolistic control, whenever such practices have harmful effects on the expansion of production or trade and interfere with the achievement of any of the other objectives act forth in Article 1” (Art 46.1, Havana Charter 1948) However, it lacked of a general obligation to adopt a competition law and was abandoned by the US Congress’s opposition

It was the fact that at the December 1996 Ministerial Conference in Singapore, desire

of launching the negotiations on trade and competition policy was initiated However, in the Doha Round, 2001 WTO Ministerial Conference, the issue was compromised among delegations to be continue in an educational mode (non-negotiating) only (Anderson/Holmes 2002, p 531-563) The text related to the “Interaction between trade and competition policy” (WTO, Ministerial Declaration WT/MIN(01)/DEC/1, para 23-15), especially, in paragraph 25, which is the major elements, was forwarded to the preparation process for Doha as potential elements of a WTO Agreement on competition policy (Anderson/Holmes 2002, p 531-563)

Apparently, there exists the relationship between competition policy and the multilateral trading system Primarily, it is widely accepted acknowledgement that common objectives of trade liberalization and competition policy lie on the promotion of economic efficiency and consumer welfare (The WTO 1997; OECD 2001) Contradictorily, the expanse

of the WTO involvement in competition policy has been questioned by trade experts and commentators (Klein 1996) Some issues related to this debated interaction will be considered in the following parts

3.1.1 Anti-competitive actions and import market access

The impact of anti-competitive conduct of corporations on goods/services’ market access was possibly the most debated area concerning the interaction between competition policy and trade (The US ICPAC, 2000) Those practices contain vertical market restraints, monopolies, import cartels, exclusive or special privileges, private standard setting and state trading A concern at issue was that excessive focus on market access goal in rules on the WTO competition policy could distort the fundamental principles of competition policy (The WTO 2001, para 17)

3.1.2 Obstacles to international trade growth and economic development

Cartels has provided many evidences that they are truly obstacles to not only the international trade growth, but also the national economic development as they determine

to raise price and reduce output Thus, consumers all over the World are the ones who will suffer the most

Obstacles can be found in other area such as trade in services, intellectual properties and agriculture sector International consumers will never get better services without the existence of competition policy, for instance, in banking services, airlines and so on (The US DOJ, 2001) In 1998, within the WTO Working Group, the Interaction between Trade and Competition policy was also a crucial aspect to be discussed, such as exclusive dealing requirement as hard as tying agreement in licensing agreement, limiting technology innovation and customer benefit (Church/Ware 1998, p 227-285) Intervention of the government in agriculture in the form of subsidies, trade barriers, and supportive programs may distort the competition process and limit the innovation in this sectors

3.1.3 Contributions of market definition to the general mission of WTO law and antitrust law

The market definition, which was previously discussed in this research, should exist

in WTO law and antitrust law to make vital contributions to the general mission of the laws

In antitrust law, market definition is one of the most fundamental concepts constructing legal framework to uphold competition policy in most of countries in the World regarding cartels, abuse of dominant position and economic concentration In WTO law, defining the set of notions “like products”, “directly competitive or substitutable products” and “like services and service providers”, market definition also supports the two main instruments as “substantial reduction of tariffs and other barriers to trade” and

“elimination of discriminatory treatment in international trade relation” for WTO members

to accomplish WTO objectives

As a necessary element in the legal framework in both law systems, market definition is the condition for the implementation of both antitrust law and WTO law and the achievement of their objectives of protecting the competition process, promoting economic efficiency and consumer welfares Its important contributions will be evaluated

in later part of the research

3.2 Comparison Results On Market Definition Between Antitrust Law And Wto Law In Theory And Practice

3.2.1 The rule systems and methods of market definitions

Market definition in antitrust law has its own legal framework to support a full established methods, its implementation and advanced development with new developed instruments together with defined sanctioned under countries’ legislations Market definition in antitrust law of developed countries having certain similarities in principles, ruling contents and implementation procedure, has been deliberately discussed for policy improvement and further development, specifically in defining relevant market and broadly in implementing antitrust law internationally

To some extent, WTO law shares the same criteria in market definition as antitrust law under earlier consideration Nevertheless, the WTO Agreement and its Annexes lack of

a clear and systematic legal framework to support the defining process of relevant market Furthermore, WTO authorities have not yet expressly categorized the procedures or

methods it undertakes in ruling on this issue as defining the relevant market, due to the limited text of the WTO Agreement and its Annexes Therefore, certain improvements and deliberations are particularly required for a better competitive environment for goods and services among WTO members

3.2.2 Functions of market definition

Market definition keeps important functions in both law systems in helping the law

to achieve its objectives and perform its functions The most important function is a crucial element for the construction, implementation of the law, protection of the competition process, consumers and enterprises’ benefits However, market definition are diverse from the nature of the two legal systems In fact, market definition functions in antitrust law are supporting national purposes, especially competition among enterprises in each country while in WTO law, their functions are for a broader purposes, fairness among nations, maintaining a well functioned multilateral trading system, free flow of trade in goods and services

3.2.3 Scope of influence and political sensitivity

Regarding scope of effectiveness, antitrust law has gradually evolved on a country level to promote and maintain fair competition in markets, principally within the territorial boundaries of nation-states In reality, the scope of influence can expand as some countries may allow for extraterritorial jurisdiction in competition cases Similarly, market definition issue will share the same situation

Regarding scope of application, market definition which is a well-established method of preventing anti-competitive conduct has been employed in antitrust law in many countries globally Its position in the mission of protecting the competition process can vary from one country to another one Under some legislation, market definition must not the first thing to do in anti-competitive case due to the fact that there are other new developed instrument seems to suit the circumstance better while in other legislation, market definition

is the initial step in investigation

In WTO law, regarding scope of effectiveness and application, market definition is applicable for all of its Members because the provisions of the covered agreements constitute binding legal obligations with which all Members must comply, such provisions already contain an obligation to refrain from any inconsistent action Particularly, in trade dispute among Member states, after the DSB adopts a report of a panel and the AB, the conclusions and recommendations contained in that report become binding upon the parties to the dispute Market definition issue is not such an exception

3.2.4 Elements to define the relevant market

Generally, factors of market definition is material, space and time which is the mutual requirements in antitrust law and WTO law and discussed earlier part

Specifically, factors affecting market definition are basic principles of competitive restraints in both law systems In antitrust law, they are demand substitutability, supply

substitutability and potential competition In WTO law, the criteria is deferred among objects under consideration They are physical characteristics, end-uses, tastes, habit of consumers and tariff classifications for “like products” They are quantitative data, trade barriers and potential competitions in “directly competitive or substitutable products” For like services and service providers, the criteria are not available as it has only few cases and WTO members have expressed limited interest in discussing such issues

4 Conclusions and discussion

4.1 Implications For Vietnam

4.1.1 Overview of market definition in Vietnam Law on Competition

Followed the Economics Transformation of the country, the new circumstance was

in need of suitable political institutions, market economy to liberalize the production capacity and competitive capacity of objects in the economy Therefore, legal system gradually upgraded to create the legal base for economic activity that led to the emergence

of Vietnam Law on Competition regulating market definition’s issues

All of 123 Articles incorporated in 6 chapters of the Law were issued with purpose

of controlling competition-restricting acts; protecting entities from unfair competition actions, and creating and maintaining a fair competitive environment Particularly, the Law categorizes its scope of influence into two major behaviors which are competition restrictive acts and unfair competition acts The competition restrictive acts, which rule out 3 forms of anti-competitive conduct covering competition-restriction agreement, economic concentration and abuse of the dominant position or a monopoly position on the market, are based on the market definition Market definition is the first task to do for competition authority to define market share of enterprises while handling competition cases

Market definition in Vietnam Law on Competition

Firstly, the Law clearly defines relevant market being consists of relevant product market and relevant geographical market However, it does not mention the third element

of market definition which is time, beside the two above material (product market) and space (geographic market) elements (Art 3 of the Vietnam Law on Competition)

Secondly, the definition of relevant market is consider as the first step in conducting assessment of anti-competitive cases According to provisions at Article 9.2, 11, 18, 19, 89.1.(a) of the Law, market shares is the base for the assessment of (i) whether enterprises involving in anti-competitive conduct or competition restraint activities or not, (ii) defining the dominant market position of an enterprise or a group of several enterprises (iii) classifying the economic concentration case to be prohibited or notifying the Vietnam Competition Authority (VCA) in specific cases before conducting the economic concentration activity

Thirdly, Decree No 116/2005/ND-CP dated on September 15th 2005 provides very detail market definition with factors characterizing the relevant market in its Article 4, especially detailed provision mentioning “interchangeability” in section 5 of Article 4 and specific relevant product market and relevant geographic market

Fourthly, the law and decree lack of such a scientific way of defining relevant market, such as SSNIP test which is widely used by the authorities around the world This

is due to the fact that Vietnam has not yet issued guiding document to define the relevant market in a systematic and scientific way

Fifthly, considering the prevailing trend in the world of changing market definition’s position in assessment of competitive restraint activities, Vietnam is somehow lagged behind Even market definition is well-established in the world, through studies on market definition in reality, many legislations recognize its ineffectiveness in particular cases Thus, they have other new developed instruments such as Pricing Pressure Indices and other tools

to deal with special cases

Generally, the Law and the Decree seem to share common view with the European approach on market definition However, market definition provisions are still required to

be complemented with well-established as well as newly-developed techniques in the world that will help improve the effectiveness of the Law

Grab – Uber competition case

Competition merger case at issue: Grab acquired Uber's Ride-Sharing Business in

Southeast Asia

Case at issue:

The first opinion, the ride-hailing or ride-sharing transportation services provided

by Grab or Uber are considered to be part of one specific relevant market (which is different from that of traditional taxi in Vietnam) The explanations for this perspective are originated from the argument that: only passengers using Smartphone and installing ride-hailing or ride-sharing platform apps could become customers of these services These customers are the ones who want to get connected in order to clarify and manage the route and price better while using the installed apps In addition, they are also willing to apply modern technologies to take advantage from the transportation services Moreover, many of them prefer to be transported by normal cars without taxi cabs, especially as they plan to go on a business trip

The second supports for the classification of ride-hailing/ride-sharing transportation service and traditional taxi in the same relevant market as they both belong

to passenger transportation service in general The only difference regards the modern apps usage and possible lower price thanks to the exploitation of redundant resources in the society Ride-hailing/ride-sharing transportation service just brings passengers additional transportation choice Besides, the simultaneous operation of these new and traditional services helps the administration of transportation services to be consistent and avoid tax escape, making transportation service more efficient If this second view is supported, the