Amendments to Trade Competition Act Approved by Cabinet

Thailand’s Trade Competition Act (TCA) has been labeled an unenforceable law since it went into effect in 1999, as there have no been no prosecutions under the TCA. But on 2 February 2016 the Cabinet approved draft amendments to the TCA as proposed by the Ministry of Commerce and reported in the Bangkok Post.

These draft amendments will be forwarded to the Office of the Council of State for further review, together with the opinions of the Secretariat of the Cabinet, the Office of the Civil Service Commission, the Office of the Public Sector Development Commission, and the Office of the Attorney General. The draft will then be forwarded to the Coordinating Committee of the National Legislative Assembly for consideration before being submitted to the National Legislative Assembly.

A summary of the more material amendments is as follows:

  1. a revision of the definition of “Business Operator” to include affiliated companies or juristic partnerships; and addition of the definition of “Affiliated Companies or Juristic Partnerships”;
  2. a revision of the definition of “Business Operator with Market Domination”, giving the Trade Competition Commission the power to issue the criteria for a Business Operator with Market Domination, which criteria shall be reviewed at least once in five years;
  3. the addition of the definition of “Market Competition Factor”;
  4. a section providing that the TCA apply to certain state owned enterprises. This section will provide for exceptions to state owned enterprises that are required by law or government policies that are considered to be necessary for the maintenance of state security, public interests, common benefits or provision of public utilities. We will need to see what sort of exceptions are adopted;
  5. a section providing that there shall be an independent Trade Competition Commission (TCC), to be formed through a selection process and appointed by the Prime Minister with the approval of the Cabinet, consisting of seven members who are 45-70 years old, with a term of office of six years and for a maximum of two consecutive terms. There shall be a Selection Committee consisting of seven members with the duty to select members of the TCC; the Office of the Trade Competition Commission (the Office) shall act as its administrative body;
  6. a section providing that the Office shall be established as a government agency that is not a state enterprise but as an independent juristic person in terms of personnel, budget and operations. The budget will be supported by the government in the first year and thereafter derived from 10% of trade registration fees to cover its operational expenses each year thereafter. The Office may also earn income to cover its operational expenses;
  7. a section providing that s person who commits an offence under the TCA shall be punished in Thailand, including where part of such offence is committed outside Thailand but the consequence thereof is felt in Thailand;
  8. a section providing that cases related to an offence under the TCA may be filed with the Intellectual Property and International Trade Court. In addition, in cases where the Attorney General is of the opinion that the case file is not strong enough for prosecution, a task force will collect additional evidence to submit to the Attorney General for consideration before issuing an order on whether to prosecute a case. In at least one previous case, the TCA referred a case to the Attorney General, but the Attorney General declined to prosecute because it thought the evidence was not strong enough;
  9. a section providing that Business Operators who merge their businesses in a way which may significantly reduce competition must notify the Commission before proceeding with the merger, and then submit its financial statements over the next three years to allow the Commission to follow up with the outcome of the merger;
  10. a section providing that a Business Operator who has received an order from the Commission shall be allowed to file an appeal with the Commission against the order;
  11. a section providing that the Commission shall prescribe the criteria for reduction of fines for Business Operators who are not key players in an act of mutual agreement or restriction or reduction of trade competition with severe impact, so as to set a guideline for the court’s consideration;
  12. an increase in the criminal fines for every offence from Baht 6 million to 20% of the revenue of the year in which the offence is committed; and cancelling the imprisonment penalty for business mergers and mutual agreements for which the Business Operator is allowed to seek permission from the Commission;
  13. an increase the administrative fine in cases where a Business Operator violates an order of the Commission, with the criteria for fine calculation as prescribed by the Commission;
  14. additional penalties in cases where a false complaint, grievance or report is made to the competent official or the Commission.
Panpilai Issariyatpruit