Is Vietnam's strategy for controlling economic concentration changing?

In the context of Vietnam's promotion of attracting high-quality FDI inflows and upgrading the legal framework on competition, the role of the Vietnam Competition Commission (VCC) in controlling economic concentration is becoming increasingly important. The prominent trend in the past few years has been the increase in the decisions of the VCC for "Conditional Economic Concentration". What is the reason for the VCC to make these decisions?

The introduction of the Competition Law 2018 and the official operation of the VCC apparatus from April 2023 have marked a new era.

1. The shift from pre-audit mechanism to risk management

In the period before 2019, the control of economic concentration in Vietnam was mainly based on rigid market share figures. However, the introduction of the Competition Law 2018 and the official operation of the VCC apparatus from April 2023 have marked a new era in Vietnam's e-commerce control.

Statistics from recent reports show a significant increase in the number of records notifying financial institutions. According to the 2024 report of the VCC, the number of announced transactions has increased by 8.7% compared to 2023 and nearly 30% compared to 2022. Specifically, in 2024, there will be 197 applications, up from about 181 in 2023 and 151 in 2022. Notably, the rate of cases that must move to the formal appraisal stage and be approved with accompanying conditions is increasing, especially in the fields of infrastructure, logistics and technology[1].

The shift from the mindset of "passive prohibition" to "active control" shows that the VCC has taken a different approach in controlling M&A transactions. important layers. On the contrary, through unconditional passage, there is a potential risk of monopoly and abuse of the dominant position in the market. The "conditional" mechanism is the logical balance point, allowing Vietnam to absorb external resources while retaining control of the market.

2. "Conditional" transactions and the State's intervention in the transaction structure

According to Article 42 of the Competition Law 2018, a transaction can be approved if the enterprise commits to implement measures to remedy the impact of restricting competition. While the EU prioritizes structural measures to eliminate market power in the first place, Vietnam chooses behavioral measures to maintain supply chain stability in the developing economy.

Behavioral measures include price controls, periodic reporting requirements, or a commitment not to discriminate. This choice of the VCC comes from the reality of Vietnam's economy:

Protect the domestic supply chain: In vertical mergers, the biggest risk is that the post-merger enterprise will "close" the input or output market to competitors. Behavioral measures that force them to maintain the provision of services to third parties.

Encouraging technology transfer: One of the positive conditions specified in Decree 35/2020/ND-CP is the requirement for enterprises to demonstrate a positive impact on industry and technology development. Imposing conditions helps turn promises on file into mandatory legal obligations.

Flexibility in supervision: The  behavioral measure allows the VCC to maintain long-term supervisory power (post-inspection) instead of only making one-time decisions (pre-inspection).

3. Maersk "case study"

The deal of A.P. Moller Group - Maersk in Vietnam in the period of 2022-2025 is a clear demonstration of how the VCC handles complex vertical integration transactions.

Maersk doesn't just want to be a shipping line; They want to control the entire logistics chain from the factory to the store. To do this, they acquired Senator International (air freight), LF Logistics (warehousing/distribution) and invested in the Port of Hateco (seaport infrastructure).

Instead of preventing this expansion, the VCC licensed the deals but erected a dense technical barrier through the conditions.

Firstly, the conditions for accumulation

Decision 412 dated 15/12/2025 of the Chairman of the VCC[2] requires Maersk not only to comply with the new conditions but also to "continue to implement the conditions in Official Letter No. 3027/BCT-CT (Senator case) and Official Letter No. 4410/BCT-CT (LF Logistics case)". This shows that the VCC recognizes Maersk as a unified entity,  prevent the "tearing" of legal entities to avoid obligations.

Secondly, detailed monitoring conditions

Instead of only requiring general reports, the VCC requires market share reports on 26 specific transport routes. This proves that the regulator understands very well that the market strength of shipping lines does not lie in the whole, but lies in its unique position on arterial maritime routes.

Third, conditions against discriminatory acts

The report request "Hateco Port's 10 Largest Customers" is a tool that monitors "rejection of transactions" behavior. If this list in the future is only all Maersk's subsidiaries, the VCC will have evidence to sanction the act of closing ports with competitors.

Obviously, the VCC has chosen a new approach to controlling M&A transactions by allowing Maersk to build modern infrastructure that reduces logistics costs for Vietnam (positive impact), but forces them to cooperate with domestic logistics businesses (negative control).

Source: Government News

4. Challenges and risks of the new mechanism

Although the increase in conditional decisions represents progress and approach to the ways of developed countries in the world. However, it also poses significant challenges for both regulators and businesses.

Compliance burden

For businesses, compliance costs do not stop at the time of closing the transaction. Periodic reporting requirements on rates, surcharges, and customers require businesses to maintain a transparent data system and a permanent legal team. Violation of these conditions can result in fines of between 1% and 3% of total revenue, a huge amount for multinational corporations.

2024 has witnessed the first case of the VCC administratively sanctioning for failing to notify economic concentration, sending a strong message that the "honeymoon" period is over.

Challenges in the supervisory capacity of the National People's Committee

Applying behavioral conditions is a double-edged sword. It requires the VCC to have huge resources to monitor hundreds of periodic reports each year. How to detect a shipping line that is quietly increasing the price of handling services for competitors through complex technical surcharges? This is a difficult problem of information asymmetry that the VCC will face in the coming period.

5. What should businesses prepare when conducting M&A transactions?

Based on recent moves, it can be forecasted that the trend of e-commerce control in Vietnam in the coming years will focus on three pillars:

First, tighten control over strategic industries: Not only logistics, transactions in the fields of technology, digital data and retail will be in the special sights. Acquisitions of technology startups that have not yet reached the revenue threshold but have a large transaction value will be scrutinized.

Secondly, proactively propose a package of remedial measures: Enterprises should not passively wait for the VCC to impose it. Lessons from the Maersk case show that if businesses proactively propose commitments such as committing to maintaining service limits for third parties, committing to technology transfer roadmaps, the likelihood of transactions being approved will be higher and faster.

Third, international coordination: Bunge's acquisition of CJ Selecta[3] is mentioned in its annual report, showing that the VCC is actively coordinating with international competition authorities to share information. Businesses cannot provide data that is skewed between countries, as cross-border data reconciliation is becoming increasingly tight.

The fact that the VCC increasingly approves more and more conditional economic concentration transactions is not a sign of obstruction, but a manifestation of a change in economic management thinking. It reflects that Vietnam is using legal tools more and more effectively and strictly. This shows that the M&A market in Vietnam is still very potential, but to succeed in transactions, investors should have a new approach and the right strategy.

Lawyer Nguyen Van Phuc

HM&P Law Firm