The Trade Competition Act

Background: The Trade Competition Act of 2000 is intended to meet modern global economic trends concerning monopolies and restrictive practices. Although the act's purpose is to prohibit certain restrictive and anti-competitive practices, it provides exemptions for some businesses under certain circumstances so long as certain criteria are met.

Committee: A committee is established by the act for the purpose of overseeing policy objectives and implementations thereof. The act describes qualifications, rights, duties, and terms of the committee as well as providing for the establishment of a Trade Committee Office for the purpose of enforcement and administration. All business activities owned by business operators are subject to the act except for state enterprises, state -awarded concessions, and agriculture and businesses granted a dispensation by the Ministry of Commerce.

Criteria for Market Share: The Act is concerned with business operators who have "influence over the market" and business operators who do not. Businesses who are deemed to have "influence" are defined by having market share and total sales revenue exceeding the level set pursuant to the Act, and are therefore subject to greater restrictions.

The Committee retains the right to order the suspension, stoppage, or changing of the market share of a business operator having in excess of seventy five percent of the market share. Business operators considered to have this "influence" are prohibited from fixing or maintaining unfair purchase or selling prices. This would include selling products below average total costs, which would in effect, drive out competitors and/or prevent new market entries. This also means to include selective discounting or "price-cutting" by established firms for the purpose of preserving a dominant position or excluding a new competitor to the market.

Practices Prohibited: Influential businesses such as described above are also prohibited from dictating conditions resulting in a purchasers inability to grant services, produce, purchase or distribute goods, or resulting in the purchaser being foreclosed from buying or selling goods, granting or receiving services, or seeking credit from other undertakings. Influential businesses must also refrain from limiting, reducing or suspending services, production, purchases, distribution, delivery or importation into the Kingdom of Thailand without good reason. They are also prohibited from destroying or causing the destruction of goods for the purpose of reducing the supply to a level less than the demand. Lastly, influential business must not interfere with the business operations of third persons without good reason.

 

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