On 12 June 2018, the National Assembly approved a new regulation governing competition (the "2018 Law on Competition"). The 2018 Law on Competition comes into effect on 1 July 2019.
The 2018 Law on Competition sets out stricter regulations to control economic concentration by providing that enterprises shall be prohibited from making any economic concentration (including but not limited to mergers, consolidation, acquisitions and joint ventures) which causes or has the ability to cause a significant competition-restraining impact in the market.
The 2018 Law on Competition removes the provision on percentage of combined market share in the relevant market to assess whether economic concentration is prohibited. The National Competition Committee shall assess whether an economic concentration is likely have significant impact to restrain competition and consequently is allowed or not. Whilst there are some criteria which the Committee consider, the assessment is dependent on the subjective opinions of the National Competition Committee.
The 2018 Law on Competition creates a new concept of "conditional economic concentration". The economic concentration shall be made subject to the satisfaction of one or more conditions, in particular:
- division, separation and/or re-sale of a part of contributed capital and/or assets of enterprises participating in the economic concentration;
- control of the price for purchase, sale of goods/services or other transaction conditions in the contracts of the enterprise formed after economic concentration;
- other measures to remedy the eligibility of impact on competition restraint on the market; and
- other measures to strengthen positive impact of economic concentration.
Prior to making any economic concentration, the enterprise must notify the National Competition Committee for assessment. Any violation of economic concentration by the enterprise may be subject to a fine of 5% of total revenue for the preceding year of the year of breach.
