Reforming Thailand’s Trade Competition Commission
Related Practice Area
August 26, 2016
Thailand’s Trade Competition Act has long been perceived as a paper tiger since its conception in 1999. With the release of the new Trade Competition Bill, which may be amended, and the Trade Competition Commission pointing out violations by energy drink manufacturers, things may be about to change.
Recently, a competitor of an energy drinks operator reportedly filed a complaint with the Commission. In the Commission’s report, the business operator, which enjoyed a market dominant position, had refused to supply retailers that were selling energy drinks produced by its competitors. This is a potential breach of several sections of the Trade Competition Act. Specifically, the business operator allegedly unreasonably fixed compulsory conditions, which restricted opportunities to purchase or sell goods from other business operators, in violation of Section 25 of the Act. This can also be considered as an unfair trade practice in violation of Section 29 of the Act. In the event that the energy drinks manufacturer is found guilty, penalties including a maximum imprisonment term of three years and/or a fine not exceeding THB 6 million may be imposed.
The reported facts in this energy drinks case are similar to a widely reported motorcycle distribution case, in which the period of prescription expired in 2013. Three companies filed a complaint against a company that allegedly violated the Act in exercising its market dominance by imposing restrictive sales conditions. One complainant was a sole agent/manufacturer of motorcycles. The complaint claimed that the complainants were required to sell only the alleged violator’s motorcycle brand. The Commission found that the alleged violator’s actions breached Section 29 of the Act. Later on, in early 2013, the Office of the Attorney-General issued a notice to the Commission instructing that the claim should not be filed against the alleged violator because of insufficient evidence, and the alleged violator’s actions did not directly affect sales of the motorcycles. The matter was concluded.