Thailand | Trade

Trade competition is governed by the Trade Competition Act B E 2542( 1999), which applies to all business behaviour or activity which creates a monopoly, or reduces or restricts competition o5 rators in Thailand except the government sector, state enterprises, farmers and other businesses, as prescribed by the Ministerial Regulations. The Act aims to promote free and fair trade competition and restricts anyThe Trade Competition Commission(the Commission) is the principal regulatory body for the enforcement of the Act. The main functions of the Commission are to define dominant positions, hear complaints from third parties consider applications for permissible practices and initiate actions against persons considered in breach of the Act The Commission is also empowered to take action against companies colluding to establish or maintain restrictive business practices

There are five trade practices prohibited under the Act, described in the following sections

A. Abuse of Dominant Position

In January 2007. the Commission issued a notification prescribing the following criteria for identifying  dominant business operators in a market:  A business operator with a market share of 50 percent or more and a sales volume of THB 1 billion or more  in the previous year, or

One of the top three business operators with a combined market share of 75 percent or more and a  combined sales volume of THB 1 billion or more (unless one of them had a market share of less than 10 percent  or a sales volume of less than THB 1 billion in the previous year)

Market dominant business operators are prohibited from taking certain actions which would result in abuse of therdominant positions, such as unfair prcing, limiting production, attaching compulsory conditions to purchases, etc.B Merger Arrangement Possibly Creating Unfair Competition

There is legitimate concern that a merger or acquisition of a business may create a monopoly or resultunfair competition in the market. Where this is likely to occur, the merger or acquisition will be prohibited  unless prior permission is obtained from the Commission. A notification specifying the conditions that trigger the  prohibition is yet to be issued by the Commission

C Anti-competition Co-arrangement

The Act prohibits business operators from colluding with each other or jointly conducting certain activitieshich create a monopoly

D. Preventing the Purchase of Goods or Services Directly from Overseas

The Act restricts any business operator from taking any action with an overseas business operator with which  it has a business relationship by way of contract, policy, partnership, shareholding or otherwise in order to prevent  customers from buying goods or services directly from the overseas business operator

E Unfair Competitive Actions Causing Damage to Other Business Operators

Business operators are prohibited from taking any action which prevents free and fair competition and  causes destruction, damage, obstruction, impediment or restriction to another's business operation  In addition, the Commission issued a regulation in 2006 providing guidelines for determining which business  practices could constitute unfair competition, specifically in relation to the trade practices between modem tradersreturn of goods, consignment sales contracts, conditions to purchase, assignment of work to employees  suppliers, and refusal to receive specifically ordered goods for which trading was between modern traders andsuppliers.  ach of provisions of the Act can result in a maximum fine of THB 6 mllion and three years  Sanctions may be imposed against responsible officers or representatives of a company