Vietnam’s Decree No. 35/2020/ND-CP: Guidance on determination of the relevant geographic market

According to Decree No. 35/2020/ND-CP of Vietnam’s Government, a relevant geographic market is a specific geographical area where available products or services are interchangeable or substitutable under similar competition conditions which are significantly distinguished from those conditions existing within neighboring geographic areas. Boundaries of geographic areas may be defined by the following elements:

- Geographic areas that accommodate business establishments of enterprises participating in distribution of relevant products and services;

- Business establishments of other enterprises that are located within neighboring geographic areas close enough to the geographical areas prescribed in point a of this clause to the extent that they are able to take part in competition with relevant products and services available within these areas; 

- Shipping costs of products and services;

- Shipping time length of products and services;

- Barriers to market entry and expansion;

- Consumption habits;

- Required costs and time that consumers spend on buying or using these products and services;

Note: A geographical region is regarded as having conditions similar to and considerably distinguishable from relevant geographical areas if it meets one of the following criteria:

- Shipping costs and time constituting the price of a product or service may be increased by 10% at maximum;

- One of the barriers to market entry and expansion stated in Article 8 herein exist.

Besides, Decree No. 35/2020/ND-CP also stipulates that supply-side substitutability will be defined as the capacity for increase in output volume and sales of enterprises currently manufacturing or trading a product or service, or the commencement or switch of production or trading of that product or service of other enterprises for less than 6 months without any significant increase in product or service costs if increase in its price falls within the range between 5% and 10%.

View more details at Decree No. 35/2020/ND-CP of Vietnam’s Government effective from May 15, 2020.

Le Hai

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