Thailand has a robust legal framework for competition, with laws and regulations in place to prevent anticompetitive conduct and market concentration and to promote fair competition. However, as the business environment in the country continues to evolve, it is important for companies operating in Thailand to stay informed about the latest developments in competition laws and regulations.
Generally, Thailand’s competition regime is based on the Trade Competition Act B.E. 2560 (2017) (the TCA) and its implementing regulations, except for certain industries which are governed by sector-specific competition regulations. The TCA is designed to promote free and fair competition by suppressing anticompetitive behaviors.
In this article, we will examine what businesses can expect in the coming year, and what they need to be aware of in order to stay compliant.
A Maturing Regulatory Structure
The Trade Competition Commission of Thailand (TCCT) is the agency responsible for enforcing competition laws and regulations in Thailand. The TCCT has the authority to oversee the market structure, act to maintain competitiveness in various industries, investigate misconduct, and take action against companies that engage in anticompetitive practices, such as abuse of market dominance, cartels, and unfair trade practices. It also has discretionary power to consider applications for a merger of two or more businesses that may cause monopoly or market dominance.
While the TCA and the TCCT had limited success in the decades after the original TCA’s enactment in 1999, a new TCA in 2017 made several significant changes to the previous version of the law. The 2017 TCA guarantees the independence of the TCCT from political and business interventions. It also introduces administrative penalties for less-serious offenses, including non-hardcore cartels, unfair trade practices, and neglect of merger filing duties.
Since then, the TCCT has been more active in its issuance of subordinate regulations to optimize the functionality of TCA provisions. A number of business-specific guidelines adopted from time to time address competition concerns in certain business sectors, such as modern trade, franchises, and food delivery services. The TCCT has also issued rules that purchasers must follow when setting credit terms for SMEs (small and medium enterprises).
The level of enforcement has also escalated, evidenced by more than 60 cases determined and concluded during 2019–2021—mostly regarding merger filings and unfair trade practices. In recent years, the TCCT has had oversight of several high-profile mergers, issuing remedies and closely keeping track of the companies’ business conduct to ensure compliance with fair trade and competition requirements. The administrative office of the TCCT has also accomplished the first proactive investigation procedures involving unannounced inspections, commonly known in some jurisdictions as “dawn raids,” conducted at the accused’s premises to obtain useful evidence for cartel misconduct.
TCCT’s academic role has also been well recognized. The TCCT has conducted market studies of many emerging industries, such as e-commerce and marketplace platforms, to understand business practices and identify potential anticompetitive behaviors. The TCCT also acknowledges that the TCA should not stop evolving in today’s complex economy. In collaboration with the Thailand Development Research Institute, the TCCT studied whether and how to improve the TCA and its enforceability, resulting in the proposal of significant amendments to the TCA.
The regulatory structure of Thailand’s competition regime has matured a great deal in the past five years. This increased reliability is likely to continue in 2023 as the TCCT looks to deal with concerns about today’s market conditions.
TCCT and Emerging Issues
One of the key areas of focus for the TCCT in the coming year will be the digital economy. With the rapid growth of e-commerce and online platforms, the TCCT will be closely monitoring the growing market power of these operators to ensure that competition is fair and that consumers’ selection of goods and services is not manipulated. This is particularly important as the COVID-19 pandemic has accelerated the shift to what the Thai government has called the “platform economy.” Recognizing that some plaftform operators’ conduct and trade conditions could damage competitors and trade partners, or restrict consumers’ choices, the TCCT set out to develop a new set of regulations and strategies to address these competition concerns. In this regard, the TCCT may adopt new legislation modeled on the Digital Markets Act of the European Union to more efficiently tackle anticompetitive conduct by digital marketplaces and online gatekeepers.
One of the TCCT’s missions in the year ahead will be to revitalize its existing regulations. The TCCT is prepared to raise the threshold for determining whether a company is in a position of market dominance, in light of the country’s economic growth and heightened inflation. Another area of focus is amendments to enhance the clarity of merger control rules and to extend the scope of control to certain types of mergers such as a full-function joint ventures, which are not yet clearly regulated under the current rules.
In terms of enforcement mechanisms, the TCCT is studying the possibility of implementing a leniency program that would grant immunity to whistleblowers who expose collusive arrangements. This leniency program would be a highly useful instrument for the TCCT in detecting cartels, similar to the success of leniency policies in exposing collusion in the United States, the European Union, Japan, and other jurisdictions.
Conclusion
Overall, businesses operating in Thailand can expect the TCCT to continue its efforts to promote fair competition and to intensify the level of enforcement in the coming year, with a particular focus on the digital economy and merger control. Companies should stay informed about the latest developments in competition laws and regulations and seek legal advice when necessary to ensure compliance. While competition is just one of the many areas of compliance that businesses have to uphold, enlisting outside assistance in maintaining a healthy and resilient presence in the market can greatly ease the burden.
