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Home5 things “do not” and “should not” in EU business

5 things “do not” and “should not” in EU business

Department for Competition and Consumer Protection (Ministry of Industry and Trade) has just issued a series of recommendations for Vietnam enterprise doing business in the EU market.

Firstly, to develop communication rules with competitors. Enterprise has to require its staff not to exchange information with their competitors such as: Information relating to sales in the EU market (asking if their competitors participate in specific tenders; price of a certain item, discount or those involving to products that enterprise is giving in the EU, etc.). It also should not be communicated about the products in trade here, for example inventory in the EU market, production costs, resources or production processes).

Secondly, to keep conscious of joining a Trade Association. The association is one of the information channels to help enterprises capture the market. However, acts of anti-competitive agreements often lurk under the association’s activities.

Therefore, Vietnam enterprises participating in such associations in the EU are not allowed to talk about items of prices and output during meetings, exchanges or participate in surveys of raising ideas on eliminating any members out of the sector being their scope of production and business in EU, etc.

Thirdly, to develop communication rules with clients and suppliers. In the relationship between the enterprise and its partners (distributors) or material suppliers, enterprises should not perform acts such as: Forcing distributors to comply with certain prices; talk to businesses at different stages (suppliers or distributors) about not dealing with a precise client.

For example, a Vietnam enterprise requires distributor X in Paris not to sell to those from Lyon and vice versa. “These acts might violate competition law if the competition authority successfully proves a significant anti-competitive effect on the EU market”, said a representative of the Department of Competition and Consumer Protection.

Fourthly, to review contracts signed between enterprises and distributors or suppliers in the market. For Vietnam enterprises having dominant position in a market involving to EU, they should not act in risk of damaging to competition like pressing an unreasonable or abnormal price or limit the output. The contract review aims to remove terms showing signs of violating competition law.

Finally, Department for Competition and Customer Protection notes to enterprises on the participation in the leniency program if they engage in anti-competitive agreements. In case enterprises believe that they have unintentionally took part in anti-competitive agreements in the EU market, they should declare and participate in the leniency program under EU competition law to enjoy exemption from fines.

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