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May 6, 2025

Key Findings from OECD Review of Thailand’s Competition Law

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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.

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