Trade Competition Act

The Act does not apply to the acts of (1) central, provincial and local government; (2) state enterprises, public organisations and other state bodies, but only to the extent they act under a law or Cabinet resolution needed for state security, public benefit, collective benefit or public utilities; (3) legally recognised farmer groups, cooperatives and cooperative federations whose business purpose is to serve farmers' livelihoods; and (4) businesses for which a specific law regulates trade competition.

A business operator is a distributor, a producer for sale, an orderer or importer for sale, a buyer for production or resale of goods, or a service provider in a business. A business operator with market dominance is one or several operators in a market whose market share and sales exceed the criteria announced by the Commission, taking competitive-condition factors into account; the Commission must review those criteria at least once within three years of the announcement. Operators related by policy or power of command are counted together. The share and sales figures are in the Commission's announcement, not in the Act.

The Commission has a chairperson, one vice-chairperson and five other members, appointed by the Prime Minister from persons selected with Cabinet approval; the Secretary-General is its secretary. The chairperson, vice-chairperson and members work full-time (Section 23).

The Commission issues rules and announcements, sets conduct guidelines, hears complaints and investigates offences, decides advance-ruling requests under Section 59, sets administrative fines under Sections 80 to 83 and sues in the Administrative Court, and advises government bodies on rules that obstruct competition. It conducts criminal cases on an injured person's complaint under Section 78 (Section 17(8)); when it considers prosecution warranted it sends its opinion and the file to the public prosecutor, and if the prosecutor declines to prosecute its chairperson exercises the power to contest that decision (Section 25).

A business operator with market dominance must not: (1) set or maintain purchase or sale prices unfairly; (2) impose unfair conditions on trading partners that make them limit services, production, purchases or sales, or limit their choice of buying, selling, receiving or providing services or sourcing credit; (3) without reasonable cause suspend, reduce or limit services, production, purchase, distribution, delivery or import, or destroy or damage goods, in order to push quantity below market demand; or (4) interfere with another's business without reasonable cause. Breach is a criminal offence under Section 72.

A business operator that carries out a business combination that may significantly reduce competition in a market, within the criteria in the Commission's announcement, must notify the Commission within seven days after the combination. An operator that will carry out a combination that may create a monopoly or market dominance needs the Commission's permission beforehand, so the regime is mostly notification after the event. The Commission's announcement under the first paragraph must itself state the minimum market share, sales, capital, shares or assets (third paragraph); those figures are not in the Act. A business combination includes a merger and the acquisition of all or part of another business's assets or shares to control its management policy; internal restructuring between related operators is excluded under the Commission's criteria. Failing to notify carries an administrative fine of up to THB 200,000 plus up to THB 10,000 a day (Section 80); combining without permission carries up to 0.5% of the transaction value (Section 81).

The Commission must decide a permission request under Section 51, second paragraph, within 90 days of receiving it, extendable by up to 15 days with reasons recorded. It considers business necessity, the benefit of promoting business, the absence of serious damage to the economy and the absence of harm to the important interests of consumers as a whole, and may set a period or conditions. It must give reasons. An operator who disagrees may sue in the Administrative Court within 60 days of notice of the order. A permitted combination must follow the period and conditions set, and the Commission may revoke the permission in whole or part for breach (Section 53).

Business operators competing in the same market must not agree together to do anything that monopolises, reduces or restricts competition in that market, in these ways: (1) fixing purchase or sale prices or trade conditions that affect prices, directly or indirectly; (2) limiting the quantity each will produce, buy, sell or provide; (3) colluding on a bid or tender so that one side wins or another does not compete; or (4) dividing territories, or buyers or sellers, among themselves. The section does not apply to acts between operators related by policy or power of command under the Commission's criteria. Breach is a criminal offence under Section 72.

Business operators must not agree together to do anything that monopolises, reduces or restricts competition in a market in these ways: (1) imposing the Section 54(1), (2) or (4) conditions between operators that are not competitors in the same market; (2) reducing the quality of goods or services below what was previously produced, sold or provided; (3) appointing a sole distributor or provider of the same or the same type of goods or services; (4) setting purchase or sale conditions or practices so that the parties comply as agreed; or (5) other agreements announced by the Commission. Breach carries an administrative fine under Section 82, not a criminal penalty.

Section 55 does not apply to (1) acts between operators related by policy or power of command under the Commission's criteria; (2) agreements whose purpose is to develop production or distribution or promote technical or economic progress; (3) agreements within a business model in which one party licenses goods, services, trademarks, business methods or business support and the other pays fees or other consideration; or (4) forms of agreement or business set by ministerial regulation on the Commission's advice. Categories (2) and (3) must not create restrictions beyond what is necessary, create monopoly power, or significantly limit competition in that market, having regard to the effect on consumers.

A business operator must not do anything that damages other business operators in these ways: (1) unfairly excluding another operator's business; (2) unfairly using superior market power or bargaining power; (3) imposing trade conditions that unfairly limit or obstruct another's business; or (4) other conduct announced by the Commission. Breach carries an administrative fine under Section 82.

To facilitate business, an operator may ask the Commission in advance to rule on (1) the conduct of an operator with market dominance under Section 50, or (2) a business activity of a kind described in Section 54, 55, 57 or 58. The Commission may attach conditions. The ruling binds only the requester, within the scope and period the Commission sets, and is revoked if the information supplied proves materially inaccurate or incomplete or the conditions are not met. The annex to the Act sets a fee ceiling of THB 50,000 per request; ministerial regulation may set fees up to the annex rates (Section 6).

If the Commission has credible evidence that an operator breaches or will breach Section 50, Section 51 (second paragraph), 54, 55, 57 or 58, it may order in writing that the conduct stop or be changed. An operator who disagrees may sue in the Administrative Court within 60 days of notice, but must comply unless the court suspends or revokes the order (Section 62). Breaching an order carries an administrative fine of up to THB 6,000,000 plus up to THB 300,000 a day while the breach continues (Section 83).

Breaching Section 50 or Section 54 is punishable by imprisonment of up to two years, or a fine of up to 10% of revenue in the year of the offence, or both; in the first year of business, imprisonment of up to two years, or a fine of up to THB 1,000,000, or both. An injured person may complain to the Commission but cannot prosecute directly (Section 78). The Commission may compound offences (Section 79), and directors, managers or others responsible for a company's offence are also liable (Section 77).

Breaching Section 55, 57 or 58 carries an administrative fine of up to 10% of revenue in the year of the offence; for an offence in the first year of business, up to THB 1,000,000. Other administrative fines are in Sections 80 and 81 (merger notification and permission) and Section 83 (breach of a Section 60 order).