Current Status of Vietnamese Law on Controlling Abuse of Dominant Market Position in the Petroleum Business Sector

Regarding specific measures to control the abuse of dominant market position in the petroleum business applied by countries, they can be divided into three main groups:

First, by the provisions of competition law.

This is the most effective measure of the State to control the abuse of dominant market position because this is the measure with the highest enforcement effect that the State forces entities to comply with. The United States can be said to be one of the countries that enacted the earliest competition law in the world (Sherman Law of 1890), this is the first anti-monopoly law passed by the states before becoming a Federal law, which has provisions on abuse of market power. In addition, these provisions are also of interest in the legal system of each state. US law does not restrict market participation including import and distribution, but requires separation between oil refining and retail activities to prevent abuse of dominant market position by oil companies. Demand in the United States is relatively stable at a high level and large enough to create competition between import and distribution companies [41]. The US does not intervene directly in the market but through the operation of the strategic reserve fund. Although the State intervenes at a minimal level in the petroleum business market, businesses still have to comply with general regulations on consumer protection and anti-competitive practices.

In addition to US law, the competition law systems of other countries and regions in the world also provide specific regulations on this behavior, such as Article 82 of the Treaty of Rome, ... Through that, it can be seen that the laws of countries have soon recognized the need to issue regulations to regulate the behavior of abusing a dominant market position. For Vietnam, right now

Since the promulgation of the Competition Law in 2004, lawmakers have also issued regulations to regulate this behavior (Article 13 - prohibited acts of abuse of dominant market position). To date, over one hundred countries and regions in the world have issued competition laws, including regulations to limit certain anti-competitive behaviors of dominant market enterprises.

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By providing regulations related to dominant market position, the Competition Law has played an important role in preventing and handling enterprises that abuse their dominant market position, thereby ensuring transparency and effective operation of the market, ensuring equality among enterprises participating in the petroleum market.

Second, administrative-economic measures

To control abuse of dominant market position in general and anti-competitive practices, the State may apply administrative-economic measures. Measures in this group include:

Eliminate State preferences for some enterprises: The dominant position of an enterprise may be due to the enterprise's own capabilities or to the preferences of state management agencies. In the second case, enterprises may take advantage of the preferences of state agencies to carry out acts of abusing their dominant market position that are difficult to detect. Therefore, state management agencies need to create fair competition among enterprises by eliminating unreasonable preferences for enterprises, especially state-owned enterprises.

Tax policy: High tariffs will affect the competitiveness of goods and thus reduce the quantity of goods consumed. When taxes are higher, both businesses and consumers have to consider their activities. For the business sector that is closely linked to the economy and

In the case of the petroleum business, the use of tax policies will be an effective measure of the state. However, in a market with a dominant enterprise, the tax burden will generally fall more on consumers and therefore needs to be applied with extreme caution.

Price control policies: The State can prohibit and reduce the pricing power of enterprises with market power to prevent dominant enterprises from setting prices too high or too low, causing damage to customers and consumers. However, intervention in the pricing power of enterprises must be based on the specific situation of the market, and ensure the interests of enterprises. In the Asian region, Thailand is a country that uses price control policies as an effective measure to control the abuse of dominant market position in the petroleum business sector through regulating ceiling prices to protect the interests of consumers when the price of petroleum products fluctuates highly, avoiding the phenomenon of sellers pushing up prices, causing damage to consumers.

Although divided into the above measures, in reality, the measures are always closely related to each other, especially the regulations of the competition law system are always effective tools and forms of expressing the policies and regulatory measures of the state towards the petroleum business market.

Chapter 1 Summary

Regulations on controlling the abuse of dominant market position are a fundamental content in the competition law system. For the petroleum business market, which is a field that has a wide impact on the economy as well as the lives of each citizen, controlling this behavior becomes even more necessary. The State can control the abuse of dominant market position in the petroleum business through various measures, but the most effective measure is through the competition law system. Most countries' laws allow many entities to participate in petroleum business activities to ensure a healthy competitive environment, while at the same time there is a certain level of regulation by the State for a sensitive capital market such as the petroleum business market.

Chapter 2

CURRENT STATE OF CONTROL OF ABUSE OF DOMINANT MARKET POSITION IN THE FIELD

PETROLEUM BUSINESS IN VIETNAM TODAY

2.1. CURRENT STATUS OF VIETNAMESE LAW ON CONTROL OF ABUSE OF DOMINANT MARKET POSITION IN THE PETROLEUM BUSINESS SECTOR

2.1.1. Determining market dominance

Vietnam's competition law does not provide a specific definition of an enterprise with a dominant market position. Instead, Article 11 of the 2004 Competition Law stipulates:

An enterprise is considered to have a dominant market position if it has a market share of 30% or more in the relevant market or is capable of significantly restricting competition [28]; and a group of enterprises is considered to have a dominant market position if it acts together to restrict competition and falls into one of the following cases: (a) Two enterprises have a total market share of 50% or more in the relevant market; (b) Three enterprises have a total market share of 65% or more in the relevant market; (c) Four enterprises have a total market share of 75% or more in the relevant market [28].

Thus, determining the dominant market position in the petroleum business market according to Vietnam's competition law is based on the following factors:

2.1.1.1. Determining the relevant market

Vietnam's Competition Law introduces the concept of relevant market in a enumerative manner. According to the Competition Law 2004:

Relevant market includes relevant product market.

and relevant geographical market: (a) Relevant product market is the market of goods and services that can be substituted for each other in terms of characteristics, intended use and price; (b) Relevant geographical market is a specific geographical area in which there are goods and services that can be substituted for each other with similar competitive conditions and that are significantly different from neighboring areas [28, Article 3, paragraph 1].

Decree No. 116/2005/ND-CP dated September 15, 2005 of the Government detailing the implementation of a number of articles of the Competition Law also provides specific methods for determining the relevant market. Accordingly, the determination of the relevant market will be based on the following factors:

First, the relevant product market (product substitutability)

When products are substitutable, it means that they serve the same market need. The two criteria for assessing the substitutability used by the Vietnam Competition Law are (i) the nature of the product expressed through the characteristics and purpose of the product and (ii) the reaction of consumers when there is a change in the price of related products. The types of products in the current petroleum market in Vietnam include:

+ Gasoline products: Gasoline or fuel for gasoline engines is a mixture of many different compounds, including two main groups: hydrocarbons and non-hydrocarbons. Engine gasoline is a carefully selected mixture of several components, combined with several additives to ensure the operating requirements of the engine under actual operating conditions. Along with the increase in the number of gasoline engines, the demand for gasoline fuel is increasing rapidly, at the same time bringing with it the risk of increasing toxic waste, affecting human health and the living environment. Therefore, gasoline products not only need to meet the requirements of combustion efficiency, thermal efficiency but also must ensure the requirements of environmental protection. Currently, on the market

Vietnam only has unleaded gasoline, mainly RON 95 and RON 92 gasoline. In addition, our country is implementing the sale of bio-fuel (a type of gasoline mixed with a ratio of 5% ethanol alcohol and 95% regular RON 92 gasoline) in some localities. In terms of usage, motor gasoline is mainly used for internal combustion engines, including 4-stroke and 2-stroke engines. All types of machinery and equipment operating on internal combustion engines can use RON 95, RON 92 gasoline and bio-fuel as fuel. In terms of product prices, the prices of these three types of gasoline often differ by about 2.5-4% (for example, in September 2014, the price of RON 95 gasoline compared to the other two products often maintained a price difference of 2.5%). These three types of gasoline can be substituted for each other in terms of price. This group of petroleum products has a purpose of use and a price that is relatively different from the market of other petroleum products, so they are grouped into one group when analyzing the related product market. Determining the specific related product market depends on each case [17, p.337].

+ Diesel: This is a liquid fuel, heavier than kerosene and gasoline. Diesel is a product of the direct distillation of crude oil, with all the physical and chemical properties suitable for diesel engines without having to apply complex chemical transformation processes. Currently, in the Vietnamese market, there are mainly two types of diesel: the type with a sulfur content of 500mg/kg (DO 0.05S) and the type with a sulfur content of 2500 mg/kg (DO 0.25S). The two types differ mainly in the sulfur content in the fuel. This is also the most important concern for diesel engines, because sulfur through the combustion and oxidation process, if in contact with water, will form acid that corrodes the engine, causing deterioration of the engine's lubricating oil. Basically, diesel fuels can be used interchangeably depending on the user's consideration of the durability of the equipment, engine and cost, fuel price. The

Equipment, machinery, and vehicles operating on diesel engines can all use DO 0.05 and DO 0.25 oil products as fuel. In terms of price, the price difference between these two products is not large and can be replaced by each other in price (for example, at the time of September 2014, the price difference between these two products was only about 0.002%).

+ FO oil: Fuel oil is often called furnace fuel because this type of fuel is often used to provide heat in industrial furnaces. Fuel oil is divided into two types: light fuel oil and heavy fuel oil. Light fuel oil is often used to run agricultural machines, while heavy fuel oil is often used to provide heat in industrial furnaces and heavy vehicles. In our country, FO oil is mainly imported and distributed for industrial and transportation purposes.

+ Aviation fuel: Aviation fuel used in Vietnam is Jet A1. This type of fuel is used for aircraft and rockets that use gas turbine jet engines to provide energy for the aircraft and control various engine parameters [17, p.340].

Second, identify the relevant geographic market.

This is essentially the determination of the geographical area where products can be substituted for each other, that is, finding the basis to assess whether consumers are willing to switch from buying a product in one location to buying a similar product in another location. When an item in this location increases in price, if consumers want to move to another area to buy a similar product, they will have to think about shipping costs, travel costs, etc. If they accept this increased cost to buy a similar product in another area, these two areas are considered to be in the same relevant geographic market, and vice versa. The level of shipping costs and shipping time between locations in the same area is assumed to be acceptable to consumers if

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