Summary Trade Competition

Thailand has had a quasi-competition law since 1979, known as the Price Control and Anti-Monopoly Act. At its inception, the law's objective was to protect consumers from inflationary pressures and from widespread collusive practices among businesses that had led to excessive pricing. The provisions concerning anti-competitive practices were incomplete, as they did not cover mergers and many important vertical restrictive practices. Implementing a price control mechanism was easy, but the Department of Internal Trade, a part of the Ministry of Commerce, hardly enforced the anti-monopoly provisions. This limited enforcement situation existed because the law required that the Department of Internal Trade officially declare a business accused of anti-competitive practices a "controlled business" before the law could be enforced. During the two decades that the law was in effect, the competition authority only declared one such business, an ice manufacturing company, a "controlled business" because there were no clear rules or guidelines for officially classifying such anti-competitive businesses as "controlled businesses."

In 1999, two years after the Asian economic crisis, the Parliament passed the national competition law. As mentioned earlier, the promulgation of the national competition law in Thailand was voluntary. It was not part of the IMF conditions, as in Indonesia, or part of a bilateral free trade commitment, as in Singapore, or a WTO accession commitment, as in Vietnam. Hence, the law received minimal technical assistance from international organizations such as the World Bank or UNCTAD. According to Suthee Supanit, a law professor at Thammasat University in Bangkok who was part of the drafting committee, the adoption of the New Constitution in October 1997 enabled the ratification of the Trade Competition Act. Article 50 of the New Constitution ensures citizens the right to engage in free and fair competition, while Article 87 stipulates that the State shall pursue a free economic system through market forces, ensure and supervise fair competition, prevent direct and indirect monopolies and refrain from engaging in businesses in competition with the private sector. The promulgation of the competition law was seen as a necessary tool to fulfill the mandate established by the New Constitution to advocate for free and fair competition.

On February 10, 1999, the Thai Parliament adopted the “Trade Competition Act” with the aim of creating fair competition among private enterprises in Thailand. The Trade Competition Act (Competition Act) came into effect on April 30, 1999, thirty days after its publication in the Government Gazette on March 31, 1999.

The Competition Act applies to all enterprises and business activities in Thailand with the exception of state enterprises, cooperatives, agricultural and cooperative groups, government agencies, and certain enterprises exempted by the Act.  It replaces the old “1979 Price-Fixing and Anti-Monopoly Law” which did not provide proper protection for consumers and small businesses, especially with the privatization process presently being undertaken in Thailand.

The reader must accept that the new Competition Act is vague and, in some instances, ambiguous. This makes interpretation and compliance with the Competition Act something of a guessing game.  It will be left to Ministerial Regulations and the courts to clarify the legal application of this new law.