'Market Dominance' Criteria Finally Approved

Summary

On 9 January 2007, the Thai Cabinet approved the new regulation to define the term "market dominance" under the Trade Competition Act B.E. 2542 (1999).  Until now, the absence of a definition had largely resulted in the provisions of the Trade Competition Act, which were intended to stop unfair practices carried on by dominant incumbents, being largely unenforced. This new regulation aims to specify the criteria for determining a market dominant operator in any product or service business to ensure fair trade competition in Thailand.  This regulation, which defines "market dominance", is currently set for publication in the Government Gazette and it will come into effect after such publication.

Full Update

The Trade Competition Act B.E. 2542 (the "Act") was enacted in 1999. The Act established the Trade Competition Board (the "Board") as the regulatory authority to be responsible for the enforcement of the Act as well as to add detail to the framework set out by the Act, including defining "market dominance".  The Board has in the past proposed regulations defining the meaning of the term "market dominance" but these were rejected by the previous administration. 

Under the new regulation approved by the Thai Cabinet on 9 January 2007, there are two criteria for determining market dominant operators, which are as follows:

(i)  Any business operator of any product or service who has a market share of 50% or more and total sales revenue of Baht 1,000 million or more in the previous year; or

(ii)  Any one of the top three business operators of any product or service who have an aggregate market share of 75% or more and total sales revenue of Baht 1,000 million or more, excluding business operators who have market share of less than 10% or total sales revenue of less than Baht 1,000 million in the previous year.

Companies meeting the criteria are restricted from abusing their position and are prohibited from undertaking a number of practices including, without limitation, fixing unfair prices, limiting supplies and setting what are deemed to be unfair trading conditions.

It should also be noted that this new market dominance regulation is subject to future revision and amendment by the Board, as it deems appropriate.

If you would like to obtain further information on this subject or have any queries as to whether your business may be affected by the new regulation, please feel free to contact either Peter Burke or Chitanong Poomipark.

Author: Wisa Bunyanit

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