Significant Changes in Store Under New Trade Competition Act

By Piyawannee Watanasakolpunt and Norrapat Werajong

Trade competition in Thailand has been regulated under the Trade Competition Act B.E. 2542 (1999) (the “Current Act”), which has remained unchanged for almost twenty years.  On 7 July 2017, a new trade competition act, known as the Trade Competition Act B.E. 2560 (2017) (the “New Act”), was enacted and will replace the Current Act on 5 October 2017.

Exempt Entities

State-owned enterprises, which are currently exempted under the Current Act, will now be subject to regulation under the New Act.  However, the following entities and government organizations will continue to be exempt:

  • central, provincial or local government agencies;
  • state enterprises, public organizations and other state agencies whose purpose is to maintain state security, support public or common interests, or provide public utilities;
  • farmer groups, cooperatives and assemblies of cooperatives recognized by law and whose purpose is to carry out business activities for the benefit of farmers;
  • businesses governed by specific laws on trade competition.

Independent Status of the Office of the Trade Competition Commission

The Office of the Trade Competition Commission (“OTCC”) will function as an organization independent from the government to regulate and enforce trade competition laws.  Also, a new trade competition commission (“TCC”), consisting of a panel of seven committee members, will also be appointed.  The TCC will have authority to appoint relevant officers and issue ministerial regulations and notifications and take any other necessary action, such as investigations and prosecutions, to enforce the New Act.  Equipped with broader authority, the OTCC and TCC are expected to be able to more effectively enforce trade competition laws, eliminate anti-trust activities and promote business in Thailand.

Prohibitions on Anti-Trust Activities

While the New Act contains the same anti-trust prohibitions provided in the Current Act, such as with respect to price fixing, bid-rigging, and forming cartels, it also contains exemptions from these prohibitions.

Notification and Pre-Approval of Mergers

Notification of a proposed merger which may cause a substantial reduction in trade competition must first be made to the OTCC within seven days from the date of such merger.  The New Act also requires OTCC pre-approval of any merger which may result in a monopoly or a dominant position by business operator.

Consultancy Services by the TCC

The TCC will also provide a fee-based consultancy service for business operators in order to address any activities which may be found to be in violation of the New Act.

Stricter Penalties

Stricter administrative and criminal penalties will apply for violations of the New Act.