You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

May 6, 2025

Key Findings from OECD Review of Thailand’s Competition Law

Subscribe to Updates

On May 2, 2025, the Trade Competition Commission of Thailand (TCCT), in cooperation with the OECD, held a conference to discuss the results of the OECD Peer Review of Thailand’s competition law and policy. This review, conducted under the second phase of the OECD-Thailand Country Program, marks a significant milestone in Thailand’s ongoing institutional reform. Tilleke & Gibbins’ trade competition experts were invited to participate in both the program and the conference.

The OECD Peer Review aimed to assess the current state of Thailand’s legal and regulatory environment surrounding competition law and policies, pinpoint strengths and weaknesses, and offer recommendations on potential future development. This article highlights the review’s key findings and recommendations, and their implications for businesses operating in Thailand.

Institutional Framework: Room for Improvement

Competition law in Thailand has undergone significant transformation, particularly since the enactment of the Trade Competition Act B.E. 2560 (2017) (TCA). This landmark legislation aimed to revolutionize the competition regime, notably by amending important legal provisions to enhance public enforcement capabilities and establishing the TCCT as an independent authority separate from government ministries, endowed with its own budget and powers to enforce competition law across key areas: anticompetitive agreements, abuse of dominant market positions, merger control, and unfair trade practices. The goal was to create a more efficient, flexible, and independent agency and to prevent political intervention.

However, the OECD Peer Review points out a major impediment. The TCCT faces considerable budget and human resource constraints, which may impact its enforcement capacity. Its budget is comparatively low by international and regional standards, and only a fraction of its staff is dedicated to core competition enforcement (merger control and anticompetitive behavior). Furthermore, there is room for the TCCT to continue its improvements in expertise and efficiency—areas the TCCT has been attempting to shore up in recent years.

Scope of Application: Key Exclusions

A critical aspect noted by the OECD is the TCA’s scope of application, which contains broad exemptions in relation to the following areas:

  • State-owned enterprises (SOEs): While the 2017 TCA aimed to reduce the scope of exemptions for SOEs, SOEs remain predominantly outside the TCA’s reach if their undertakings relate to national security, public interest, public utilities, or societal interests based on law or cabinet resolutions. In practice, the TCCT appears to consider most SOEs exempt, even when competing with private players, which can create an uneven playing field.
  • Regulated sectors: Businesses specifically regulated by other sectoral laws with jurisdiction over competition matters (like telecommunications, energy, banking, and insurance) are excluded from the TCA. However, the competition rules and enforcement powers within these sectoral laws vary substantially, leading to a fragmented landscape and potential enforcement gaps. Clarity is needed on jurisdictional boundaries, especially in cross-sector cases, and the principle of competitive neutrality should be observed.
  • Extraterritoriality: It remains unclear whether the TCA applies to anticompetitive conduct occurring outside Thailand but having effects within the country. The current interpretation seems to limit enforcement against foreign entities without a Thai presence, potentially leaving international cartels or foreign mergers affecting the Thai market unaddressed.

Enforcement: Obstacles and Need for Reforms

Competition enforcement in Thailand is still developing, and the past seven years saw a low number of enforcement cases reported to the public. The OECD Peer Review Report outlines the following challenges:

  • Standard of proof: Hardcore cartels (with agreements on price-fixing, output restrictions, market allocation, or bid rigging) and abuse of dominance are exclusively criminal offenses. This requires a very high standard of proof (“beyond reasonable doubt”), making successful prosecution difficult. Most jurisdictions make administrative tools available for competition authorities to impose fines on infringements.
  • Rule of reason for cartels: Even hardcore cartels are assessed under a rule of reason, requiring proof of market effects and potentially exempting collusion with a combined market share of below 10%. This contrasts with the standard international practice of treating hardcore cartels as per se (inherently) illegal.
  • Bid rigging: Ambiguity exists regarding jurisdiction over bid rigging in public procurement. In Thailand, the National Anti-Corruption Commission typically has jurisdiction over public procurement in regard to anticorruption concerns, potentially leaving a gap in competition-focused enforcement.
  • Abuse of dominance: The assessment focuses more on the “unfairness” or “unreasonableness” of conduct rather than its impact on competition. Determining dominance itself relies heavily on market share and revenue thresholds, potentially overlooking other market power indicators.
  • Detection: Enforcement hinges primarily on complaints filed by business operators or any third party. A leniency program or whistleblower protections have not been formally introduced, but both tools are crucial for cartel detection globally.
  • Transparency: The TCCT generally does not publish a full version of their decisions but only brief summaries. This may hinder legal certainty, deterrence, and public understanding.

Merger Control: A Complex Dual System

Thailand operates a two-tiered merger control system:

  1. Premerger (ex-ante) approval: Required for mergers that may cause a monopoly or result in a dominant position. The TCCT can approve, approve with remedies, or prohibit these mergers.
  2. Postmerger (ex-post) notification: Required within seven days post-completion for mergers that may substantially reduce competition but do not fulfill the ex-ante criteria. The TCCT has no power to intervene (impose remedies or prohibit) in these notified mergers, even if anticompetitive concerns may be found.

Major issues with this two-tiered system identified by the OECD include:

  • Ineffective ex-post system: The inability to act on an ex-post notification may weaken enforcement on merger deals that presage competition restraint from the outset.
  • Unclear thresholds: Notification thresholds are linked to the potential competitive effect (monopoly, dominance, substantial lessening of competition), requiring complex analysis before notification and creating uncertainty. Clearer, objective criteria (such as turnover, potentially with a local nexus) are recommended.
  • Possibly high thresholds: The relatively low number of ex-ante filings (only 12 from 2017 to 2023) suggests current thresholds might be too high, potentially allowing anticompetitive deals to escape review.
  • Substantive test: The assessment appears focused on market structure (creation of dominance) rather than a broader “substantial lessening of competition” test used in many jurisdictions.
  • Procedure: Lack of third-party participation rights, potentially short review timelines for complex cases, and limited transparency regarding decisions are concerns.

Principal OECD Recommendations

The OECD Peer Review provides numerous recommendations, including:

  • Scope: Apply competition law consistently to SOEs engaged in economic activities and clarify jurisdiction in regulated sectors. Ensure extraterritorial application.
  • Resources and structure: Increase the TCCT budget and enforcement members of staff. Reconsider the role of external inquiry subcommittees.
  • Transparency and fairness: Publish decisions consisting of facts, legal basis, and penalties while protecting legitimate confidentiality. Improve procedural rules and rights of defense.
  • Enforcement: Empower the TCCT to impose administrative sanctions against hardcore cartels and abuse of dominance. Consider hardcore cartels inherently illegal. Clarify bid-rigging jurisdiction. Focus assessment of abuse of dominance on competitive impact. Introduce leniency/whistleblower programs.
  • Merger control: Streamline the regime (potentially removing the ex-post system or giving the TCCT powers within it). Adopt clear, objective notification thresholds, potentially lower them, and add a local nexus. Allow concerned parties to be involved in each stage of review and third-party input. Introduce a simplified procedure for a transaction that does not cause significant competition concerns (e.g., no horizontal overlaps or vertical relationships between the concerned parties, meeting criteria for combined market shares).

While Thailand made strides in the application and enforcement of competition law upon the enactment of the 2017 TCA, the OECD Peer Review underlines significant challenges that need to be addressed. An implementation of the OECD’s recommendations will be crucial for fostering a truly competitive environment that benefits businesses and consumers alike. For businesses having an operation in Thailand regardless of having a physical presence, understanding these ongoing developments and potential reforms is vital for navigating the competition law landscape effectively.

Related Professionals

Practices

Antitrust and Competition

Customs and International Trade

Location

RELATED INSIGHTS​ 

March 6, 2025
On February 18, 2025, the Thai Senate approved an amendment to the Act on the Establishment of and Procedures for the Tax Court. This follows the July 2024 approval by the Thai cabinet and subsequent preparation of supporting secondary legislation. This important amendment to procedural law, once it takes effect, will extend the exclusive jurisdictional powers of the Tax Court to all criminal tax, customs, and excise tax claims in addition to the court’s existing jurisdiction over all such civil claims. The amendment, while now formally approved by the legislature, is awaiting the king’s signature and will take effect 180 days after its publication in the Government Gazette. Based upon its projected publication date, the amendment will likely take effect by the end of the third quarter of this year. This development is set to offer a more sophisticated Tax Court litigation process for highly specialized and often complex criminal tax and customs claims, something with which Thailand’s traditional criminal courts have struggled. It also ensures that all tax and customs matters are adjudicated before the same court, saving time, party costs, and judicial resources. This appears likely to result in more consistent adjudication of criminal tax and customs disputes, a benefit for the Thai government and party litigants alike. Any ongoing criminal tax and customs claims already commenced with the respective criminal courts on the date on which the amendment becomes effective will remain under the exclusive jurisdiction of those criminal courts. The Tax Court will have exclusive jurisdiction over all other claims. This important legislative change offers those managing or otherwise facing civil and/or criminal Thai tax or customs disputes the opportunity to more effectively plan and execute a uniform defense strategy before a single, qualified forum.
Read More
March 5, 2025
It is a common misconception that importers will never win classification assessments by the Thai Customs Department. However, this belief is far from the truth. Importers can indeed prevail in customs assessments, and one of the most effective tools at their disposal is the World Customs Organization’s (WCO) Explanatory Notes. The WCO’s Explanatory Notes are an indispensable resource for understanding the Harmonized System (HS) of tariff nomenclature. These notes provide detailed commentary on the scope of each heading, including lists of main products included and excluded, technical descriptions, and practical guidance for identifying goods. By leveraging these notes, importers can ensure accurate classification of their goods, which is crucial for fair customs assessments. Understanding the Explanatory Notes The Explanatory Notes serve as the official interpretation of the Harmonized System at the international level. They offer clarity on the classification of goods, which can significantly impact the duties and taxes imposed on imports. For instance, the notes provide insights into the properties, methods of production, and uses of various goods, helping importers to classify their products correctly and avoid misclassification disputes. Thailand’s Customs Tariff Decree holds that the classification interpretation must follow the General Rules for Interpretation together with the Explanatory Notes to the Harmonized System of the WCO. Most Thai Supreme Court decisions on classification also refer to the WCO’s Explanatory Notes and past rulings as the basis of their decisions. Successful Appeals There have been numerous instances of importers successfully appealing customs assessments by relying on the Explanatory Notes. For example, one importer of electronic components was initially assessed a higher duty due to misclassification. By presenting evidence from the Explanatory Notes that accurately described the components, the importer was able to demonstrate the correct classification and secure a favorable reassessment. Practical Steps for Importers To minimize the
Read More
February 19, 2025
On January 3, 2025, the Bank of the Lao PDR (BOL) issued Decision No. 11/BOL on the Use of Foreign Currency in Lao PDR, taking effect on the same date. This decision sets out the rules for using foreign currency in Laos and ensures the Lao kip (LAK) remains the primary currency while allowing flexibility for international transactions. Key points in the decision are outlined below. Permissible Activities for Foreign Currency The decision provides that authorized entities can use foreign currency as a secondary currency to LAK in the setting of cost and pricing structures, announcing and advertising prices, and making or receiving payments for goods and services that are imported or have manufacturing inputs imported from other countries. Otherwise, LAK is the only permitted currency. The decision also stipulates that foreign exchange must be conducted only via authorized commercial banks or foreign exchange markets. The exchange rate for setting costs, pricing structures, announcing and advertising prices, and making and receiving payments for goods and services in foreign currency must match the exchange rate announced by commercial banks from time to time. Businesses Allowed to Use Foreign Currency The decision allows certain businesses and organizations to use foreign currency. These entities are divided into two groups: those that need approval before using foreign currency, and those that can use it immediately. Enterprises that can use foreign currency with BOL approval include: Businesses that export goods or services and entities that lease or obtain concessions from the government, generating revenue in foreign currency through commercial banks. Enterprises that provide international freight and passenger transportation services. Enterprises that provide services related to cross-border logistics and warehousing. Enterprises located at international borders and airports, such as duty-free shops and restaurants. Enterprises that have obligations to make payments in foreign currency to other
Read More
January 29, 2025
The fourth round of negotiations of the EU-Thailand Free Trade Agreement (FTA) wrapped up in Bangkok in November 2024. Now that the latest summary report is out, it is worth highlighting some of the intellectual property (IP)-related changes we might see once the chapter is complete. Copyright If Thailand were to agree to follow the EU proposal, we would see the term of protection for copyright extended. Currently under Thai law, protection is the life of the author plus fifty years. This is twenty years less than the EU proposal. It seems that copyright is one area the two sides have yet to agree on, and it is no wonder as agreeing to follow Thai law would deprive authors from the EU of an additional twenty years of protection post-death. On the other hand, Thailand agreeing to the EU proposal would likely result in legislative change in the country to align domestic law with the FTA. We may also see more robust and streamlined collective management organizations (CMOs) in Thailand. The current proposal calls for each party to promote cooperation between their CMOs, which would extend to transparency over their running, including revenue and representation agreements. Thailand does currently have CMOs within the territory, and the Department of Intellectual Property (DIP) has a voluntary CMO code. However, it is unclear whether existing practice will be sufficient for EU rightsholders. CMOs have been an area that is difficult to regulate as there has been a balancing act between tightening the examination of reporting and not wanting to limit the freedom of rightsholders and how they commercialize their IP. Trademarks There is a fair amount of overlap between the Trademark Act in Thailand and the EU proposals. However, it is unclear to what degree the existing laws would satisfy the requests
Read More