OECD Peer Reviews of Competition Law and Policy: Thailand

Ensure that equivalent competition law rules apply to enterprises irrespective of their ownership, location or legal form, in particular that:

• SOEs performing economic activities are subject to competition law.

• All entities engaged in economic activities, including not-for-profit organisations, associations of firms and holding companies, are subject to competition law.

• Competition law applies extraterritorially to business practices outside Thailand that produce effects within the country.

Adopt a general competition legal framework, including both substantive and procedural rules, that uniformly applies across all sectors. In addition, clarify which entities are responsible for the enforcement of competition law in the different sectors (i.e. TCCT or sector regulators).

Reallocate TCCT resources by reorganising its institutional structure and increasing the resources dedicated to competition enforcement.

Ensure that TCCT’s budget is at least at the level of comparable jurisdictions.

Implement a transparent process for selecting TCC’s members, introducing criteria to guarantee they have competition law or economics expertise to the extent possible and eliminating other unrelated criteria that may unnecessarily restrict the list of potential candidates.

Introduce clear and transparent rules to prevent, identify and address any material conflicts of interest of TCCT staff.

Consider abolishing the sub-committees of inquiry, ensuring that investigations are conducted solely by TCCT staff.

Publish the facts (including the name of the parties), legal basis and sanctions relating to all decisions, subject to the protection of confidential information.

Establish clear rules regarding the identification and treatment of confidential information. Confidential information should comprise business secrets and other commercially sensitive information (e.g. confidential aspects of price information, commercial know-how, production quantities, market shares and commercial strategies), as well as sensitive personal information (e.g. private telephone numbers and addresses, medical or employment records), but not the name of the investigated firms and individuals and the main content of decisions.

Provide clear procedural rules for all investigations against anti-competitive behaviour, specifying what the investigated parties must be informed about and in what stage. This should include the factual and legal basis, the competition concerns and the relevant evidence collected by or submitted to the TCCT, subject to the protection of confidentiality and privileged information.

In merger cases, establish clear procedural rules to guarantee that merging parties have the opportunity to obtain sufficient and timely information about competitive concerns raised by a merger and a meaningful opportunity to respond to such concerns.

Establish a mechanism to gather all information and statistics related to the TCCT’s enforcement activities at least in the past 5 years.

Establish clear rules on how sanctions are set, in particular:

• Adopt general guidelines on the methodology for imposing sanctions and calculating fines, including those applicable to individuals and for infringements lasting more than one year.

• Ensure that sanctions are proportionate to the severity of the infringement.

• Ensure that sanctions have sufficient deterrent effects.

Increase enforcement actions against cartel and abuse of dominance cases.1

Enable hard-core cartels and abuse of dominance to be sanctioned as administrative infringements by the TCCT.

Make hard-core cartels illegal regardless of the existence of proof of actual adverse effects on markets.

Clarify that the TCCT can enforce the legal provision against bid rigging in public procurement.

Ensure that the list of anti-competitive practices provided in the law is not exhaustive, allowing other potential conducts to be considered illegal if they produce anti-competitive effects.

Ensure that the definition of a dominant position is based on a case-by-case analysis of market conditions and dynamics, such as the potential entry of newcomers and the growth of existing competitors, countervailing purchasing power, alternative sources of supply and entry barriers. Market shares could be used as a rebuttable structural presumption, while turnover thresholds should be avoided for this purpose.

When assessing abuse of dominance, focus on the impact of the behaviour on competition.

Streamline the merger review regime, in particular:

• Consider reviewing the necessity for having both ex-ante and ex-post merger control regimes, taking into account their associated costs and benefits.

• Ensure the TCCT has effective powers to review transactions and, if needed, prohibit them or authorise them subject to remedies.

• Ensure that merger notification thresholds are clear and do not relate to the competition assessment. For this purpose, the creation of a monopoly or a dominant position, as well as the substantial lessening of competition should not be used as notification thresholds.

• Establish local nexus criteria, such as local turnover, within the merger notification thresholds, and specify whether the relevant turnover is with reference to the preceding financial year.

• Reduce the current numerical levels of merger notification thresholds, taking into account, among other elements, the size of the Thai economy and of most companies operating in the country, the average number of transactions that can be effectively reviewed and the experience of other similarly situated jurisdictions. In addition, threshold levels should be subject to periodic review to reflect the changes in the economic context in Thailand.

• Establish a clear substantive test for reviewing mergers that relies on the substantial lessening of competition, in addition to a test based on the impact on market structure.

Allow third parties with legitimate interest in the merger under review to have an opportunity to express their views during the merger review process.

Provide advocacy opinions to the Ministry of Commerce, the Cabinet and government agencies on policies and regulations that unduly restrict competition.2

Empower the TCCT to submit advocacy opinions to Parliament and Ministries other than the Ministry of Commerce.

Implement effective pro-active cartel detection tools (such as economic filters and industry monitoring) and ensure that all forms of complaints are considered.

Introduce a leniency programme to be implemented once cartel enforcement activities in Thailand become more effective.

Establish clear rules for the settlement procedure, including the role of public prosecutors and courts, as well as the criteria for determining the discounts to be offered.

Allow the TCCT to terminate an investigation by accepting remedies or commitments voluntarily proposed by the parties to address the initial concerns identified by the agency.

Regularly review merger filing fees.

Create a simplified procedure for reviewing mergers that do not raise competition concerns.

Consider extending the timeline for reviewing a merger or introducing suspensory mechanisms of the deadline, for instance when the TCCT requests additional information.

Introduce guidance on how to design and monitor remedies.

Improve co-operation with other domestic government bodies, such as sector regulators, public procurement entities and the Office of the Consumer Protection Board, including through formal co-operation agreements facilitating exchange of information and direct channels of communication. Staff exchanges and joint working groups may be considered for areas where more in-depth co-operation is needed.

Continue developing technical co-operation with foreign competition authorities and enhance participation and engagement in international fora, such as the OECD (including the Competition Committee, the Global Forum on Competition and the Regional Centre for Competition in Asia-Pacific), the International Competition Network (ICN) and the United Nations Conference on Trade and Development (UNCTAD).

Engage in international co-operation in competition enforcement, especially in the area of merger control, including through MoUs, for instance through the sharing of information and joint enforcement actions with other competition authorities.