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Thailand’s Trade Laws to Change

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Thailand for many years has tried to even out the market by trying to enforce fair trade policies so that consumers could benefit from better prices. This has not worked as expected and changes are now due.

The Trade Competition Law was created to avoid a situation where you would have one company that would dominate the entire process or product thus manipulating the market. A very good example was the fallout between the EU and Microsoft. Thailand has similar laws in place but it is proving to be ineffective as it has certain shortcomings. Let’s look at what it is that the Trade Competition Law was meant to stop or limit.

  1. The abuse of market dominance;
  2. Mergers or buyouts creating a cartel;
  3. The unfair reduction of competition by market manipulation;

Those are the basic issues which it was created to stop and to issue huge fines. These range from prison sentences to large fines in the range of 2 – 6 million Baht. Even though the laws are there the enforcement is lax for a number of reasons. These range from a huge discretion allowed by the Competition Commission. The Commission also lacks independence and there are no real set guidelines for companies to follow. The Act will now be reworked to provide better enforcement of the law and to ensure that the Competition Act in Thailand is followed.

Like any other country there will always be strong opposition to changes to the law as there are loads of vested interests at stake. The law also governs state companies and how they deal with their private sector competition. While the new Act is awaited, I am more than certain that there would have to compromise on both sides in order to be effective.

 

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