Introduction and Summary

On August 7, 2026, Vietnam’s Ministry of Industry and Trade (MOIT) released draft amendments to Decree 35 (Draft Amendments), which is used to enforce Vietnam’s Competition Law (Competition Law), for public consultation.[1] The Draft Amendments follow and, in some ways, mirror many of the changes proposed in earlier amendments to the Competition Law that remain under consideration by the government, while also including new provisions, particularly in the area of merger control.[2]

The Information Technology and Innovation Foundation (ITIF), an independent, nonprofit, nonpartisan research and educational institute focusing on the intersection of technological innovation and public policy, appreciates the opportunity to comment on the Draft Amendments. As ITIF emphasized in its comment on the ongoing amendment process with respect to the Competition Law, while ITIF understands the desire to “better account for the features of digital markets,” the Vietnamese government should be careful not to enact policies that will “chill innovation and harm Vietnam’s increasingly dynamic digital economy.”[3]

ITIF’s comment broadly addresses several of the key changes contemplated by the Draft Amendments. First, ITIF comments on changes to both Article 9 on the principles for determining an enterprise’s share of a relevant market and Article 10 on determining the market share of an affiliated group of enterprises, specifically regarding their consideration of transaction value. Second, ITIF analyzes the Draft Amendments’ changes to the new Article 24 and the preliminary assessment of economic concentrations and explains why conglomerate mergers are not worthy of antitrust scrutiny. Third, ITIF praises the changes in the Draft Amendments to the new Article 27 regarding the criteria for assessing the positive effects of an economic concentration, and specifically the inclusion of a new pro-innovation defense that will greatly improve merger enforcement in Vietnam. Recommendations and a brief conclusion follow.

Articles 9 and 10

The Draft Amendments detail several additional principles for determining an enterprise’s share of a relevant market, as well as for determining the market share of an affiliated group of enterprises, including purchasing turnover, sales revenue, and transaction value. While ITIF agrees that purchasing turnover and sales revenue can be relevant metrics for measuring market shares, the Draft Amendments’ insertion of transaction value—defined as the total monetary value of transactions involving products, goods, or services conducted on the digital platform provided—is both flawed and unnecessary. Consideration of market shares is relevant insofar as it permits a circumstantial inference that a firm enjoys market power, or the ability to profitably increase prices above the competitive level. While using purchasing turnover and sales revenue to make market share calculations can support that inference, market shares based on transaction value are not probative of a firm’s market power. This is because transaction value only directly measures the amount of sales on a platform between third parties, not the platform’s own price, output, or revenue. Specifically, a platform with a high transaction value may have less revenue and ultimately a lower market share than a platform with a lower transaction value if the latter charges a higher price for its intermediary services. Similarly, a platform may have a large transaction value but relatively low output and therefore limited revenue if it focuses on a small number of high-value sales, while a platform with a lower transaction value may have more overall transactions, greater output, and higher revenue.

Article 24

The new Article 24 in Decree 35 lists a number of conditions under which an economic concentration may proceed: a combined market share that is less than 20 percent, a Herfindahl-Hirschman Index (HHI) of less than 1,800, a delta HHI of less than 100, and, in a vertical transaction, market shares of less than 20 percent in both the upstream and downstream markets. The Draft Amendments add to this list by putting forward an additional exemption when the merging parties have no horizontal, vertical, or complementary relationship. While ITIF agrees that such transactions should be exempt, the Draft Amendments implicitly overlook the fact that conglomerate mergers that combine complements should not be the subject of merger enforcement at all. Specifically, for horizontal and vertical mergers, merger enforcement serves to prevent the post-merger exploitation of market power that regular antitrust enforcement typically cannot police (e.g., tacit collusion or a unilateral increase in the price of an input supplied to a rival). By contrast, the primary competitive harm from conglomerate mergers involves post-merger tying and bundling. This conduct can readily be addressed under antitrust law after the merger in the limited circumstances in which it may prove anticompetitive.

Article 27

The new Article 27 describes criteria for assessing the positive effects of an economic concentration. The Draft Amendments include a new criterion that allows for consideration of the extent to which the economic concentration promotes innovation, research and development, and other related dynamic efficiency benefits. ITIF applauds MOIT for recognizing the importance of allowing firms to present innovation-related justifications for mergers, as, in many cases, mergers that may result in a minor loss of structural or price competition may have innovation benefits that far outweigh those harms. However, ITIF cautions against allowing the “green transition” to serve as a basis for this defense. While mergers may generate legitimate efficiencies, such as by combining supply chains, reducing fuel use, and lowering costs, treating the furtherance of broader environmental goals as an efficiency defense—except in the limited circumstances in which producing greener technologies reflects a dimension of innovation competition in the market, such as in a merger between two alternative energy companies—risks bringing subjective considerations into an antitrust analysis that should be focused on whether a merger improves competition and economic welfare.

Recommendations

For these reasons, ITIF respectfully offers the following recommendations for MOIT to consider in connection with the Draft Amendments:

▪ Transaction value is a poor metric for calculating market shares: While market shares can be a valuable tool for inferring market power, looking at shares using transaction value rather than purchasing turnover or sales revenue conflates the value of transactions occurring on a platform between third parties with the platform’s own revenue, leading to inaccurate assessments of a firm’s market power.

▪ Conglomerate mergers should be per selawful:Unlike horizontal and vertical mergers, the competitive concerns associated with conglomerate mergers can be addressed outside of merger control by policing anticompetitive bundling and tying when they occur, obviating the need for merger control in this area.

▪ A dynamic efficiencies defense will prevent false positives: The Draft Amendments’ introduction of an innovation defense will greatly aid in limiting the false positives associated with condemning mergers that may cause a minor reduction in price or structural competition but produce substantial innovation benefits that far outweigh those losses—provided that the innovation defense is not expanded to generally encompass more subjective noncompetition goals like furthering a green transition. 

Conclusion

ITIF appreciates the Vietnamese government’s efforts to ensure that Decree 35 and the Competition Law reflect best practices for antitrust enforcement as the nation continues to grow its digital economy. As ITIF explained, while it has concerns about certain aspects of the Draft Amendments, other aspects of the proposed changes—in particular, the new innovation defense for analyzing economic concentrations—are likely to significantly improve competition enforcement in Vietnam. However, ITIF notes the peculiarity of MOIT issuing the Draft Amendments for public consultation while simultaneously considering sweeping reforms to the Competition Law, which Decree 35 implements. Those reforms remain subject to debate and deliberation. Given that any changes to the Competition Law have not yet been finalized, the Draft Amendments to Decree 35 appear premature and may have to be reassessed following the outcome of the broader reforms being considered for the Competition Law.

Endnotes