Thursday, September 13, 2012
Defining Relevant Market Under the European Union Competition Law - Regulations and Practice - Experience for Vietnam
Posted by D. Daniel Sokol
Thanh Nguyen, International Law Faculty, Diplomatic Academy of Vietnam explores Defining Relevant Market Under the European Union Competition Law - Regulations and Practice - Experience for Vietnam.
ABSTRACT: Competition law is the foundation of the market economy, however markets will not play its role effectively and consumer welfare will be reduced if abuse of market power occurs. In order to prevent abuses of market power arising from anti-competitive agreements, we first have to define the relevant market in which it happens. Assessing market power requires every Competition Authority to define the relevant market, thus, market definition has been at the center of any analysis of merger control or an important tool to identify the boundaries of competition between firms. In other words, the definition of relevant market lies at the core of competition law and antitrust regulation. In general, the more narrowly the market is defined, the more likely firms will be found to have market power. Because of its importance, it is necessary for every law system to provide the details regarding how to define relevant market, what factors should be taken into account and which kinds of tests can be used. Until now, most of countries have promugated guidelines on market definition, i.e the Commission Notice on the Definition of Relevant Market for the Purposes of Community Competition Law issued by European Commission in 1997, Horizontal Merger Guidelines issued by US Department of Justice and the Federal Trade Commission in 1992 and 1997, Merger Guidelines issued by Australian Competition and Consumer Commission, Singapore, China and Indian’s guidelines on market definiton, etc. Besides the Guidelines, case law also is of great important source to define relevant market. Being aware of the importance of competition law in general and market definition in specific, Vietnam also promulgated Competition Law in 2004 and Decree No.116/2005/ND-CP dated 15 September 2005 to provide detailed regulations on determining market definition. However, due to its short history, Vietnam Competition Authority has solved few cases concerning market definition until now. It is easy to understand that fact because defining relevant market is very complicated work and it needs lots of time to develop. Thus, it is difficult for a newly-established authority to deal with market definition cases. In my opinion, it is easier for the Vietnam Competition Authority as well as enterprises if they study the experience of other competition authorities in defining market definition through case law. In this way both can learn from the mistakes as well as the successes of the competition regimes. It is clear that by researching case law, we can understand deeply the way the Competition Commission define a relevant market, and what factors are to be chosen for consideration in market definition. In this thesis, I choose European Competition Law and its case law to study and analyze the concept of definition of a relevant market, to brief the methods used to define such market and their practical applicability. In every factor used to define relevant market, I will use case laws to illustrate the European Commission’s approach. I choose European Law on Competition to illustrate the way to define relevant market is because it is the most successful and comprehensive approach and, more importantly, be easier for other competition authorities, including Vietnam to follow effectively.