Trade Competition Commission's New Guidelines on Unfair Trade Practices

1. Background

The Trade Competition Commission of Thailand (the “TCC”) announced new guidelines on unfair trade practices, which were published in the Royal Thai Government Gazette on 18 February 2022, to cope with new types of unfair trade practices that have occurred in Thailand due to the rapid change in business models and economic conditions over the past few years.

These new guidelines have been issued to repeal and replace the previous guidelines, which had been in effect since 2 November 2018, by providing more details and developing the scope of conduct that may constitute an offence under Section 57 of the Trade Competition Act B.E. 2560 (2017) (the “TCA”).

2. Key Takeaways

The key changes under the new guidelines are summarised as follows:

For your information, the previous guidelines and relevant regulations shall still apply to any pending case that is under consideration of the TCC or the Office of the TCC prior to the enforcement of these new guidelines (i.e. before 19 February 2022) until its completion.

I. General provision regarding principles of free and fair trade
 

While the previous guidelines provide none of these principles, the new guidelines provide an explicit general provision that a business operator shall conform to the free and fairtrade principles, and shall not undertake any conduct causing damage to other business operators, such as unfairly obstructing the business operation of other business operators and unfairly utilizing market power or superior bargaining power.
 

II. Additional samples of economic losses in the case of violation of Section 57 of the TCA 

In principle, an offence incurring damages to other business operators under Section 57 of the TCA shall be assessed from actual economic losses. Under the previous guidelines, samples of economic losses refer to the loss of revenue, market value of products or services, and the opportunity to produce products or services. As for the new guidelines, in addition to examples prescribed in the previous guidelines, examples of economic losses also include the loss of market share of products or services, opportunities to sell and purchase products or services and increases in costs or expenses, as well as loss of opportunity to carry out business with other business operators.

III. Definition of “Market Power”

According to the previous guidelines, “Market Power” was defined as the power and ability to determine the direction or operating conditions of the market. However, under the new guidelines, “Market Power" is defined as the ability to determine the price, quantity or operating conditions of the market.

IV. Percentage of minimum value of the business transaction in order to determine superior bargaining power

Pursuant to the previous guidelines, a business operator shall be considered to have superior bargaining power when a trade partner needs to rely on such business operator for a business transaction wherein: (i) the value of such business transaction is at least 30% of the total revenue of the trade partner; or (ii) the value of the business transaction is less than 30%, but the trade partner is unable to find or has no other alternative trade partners, or where dealing with such alternative trade partners would incur excess costs.

In this regard, the new guidelines introduce a minimum value of 10% of the business transaction into the determination of superior bargaining power under item (ii). Consequently, if the value of a business transaction between business operators is less than 10% of the total revenue, none of the business operators would be considered to have superior bargaining power under the new guidelines.

V. Reclassified list of conduct and additional conduct which may constitute an offence under Section 57 of the TCA

Apart from revising some wordings prescribed under the previous guidelines to enhance clarity, the new guidelines reclassify the list of conduct that may constitute an offence under Section 57 of the TCA, as well as introduce various additional conduct deemed unfair trade practice, such as the following: :

• (a) Requiring other business operators, without due cause, to sell or purchase products or services, e.g. requiring a trade partner to purchase products or services unrelated to its ordinary course of business;

  (b) Requiring other business operators, without due cause, to sell or purchase more or fewer products or services than it needs;

  (c) Requiring other business operators, without due cause, to agree on certain trade conditions that are not included in the relevant contract, e.g. reducing the buying price or increasing the selling price, or imposing unrealistic quality assessment criteria of products or services;

  (d) Requiring other business operators, without due cause, to provide commercial or other benefits to such business operator or other persons, for example, requiring a trade partner’s employee to sell products or provide services unrelated to the ordinary course of business of a trade partner without any consideration;

  (e) Requiring other business operators to achieve a sales target that is determined without due cause; and

  (f) Other unfair practices of utilizing market power and superior bargaining power without due cause, e.g. delaying payment for goods or services.

For your information, the previous guidelines and relevant regulations shall still apply to any pending case that is under consideration of the TCC or the Office of the TCC prior to the enforcement of these new guidelines (i.e. before 19 February 2022) until its completion.For your information, the previous guidelines and relevant regulations shall still apply to any pending case that is under consideration of the TCC or the Office of the TCC prior to the enforcement of these new guidelines (i.e. before 19 February 2022) until its completion.

This is intended merely to provide a regulatory overview. It is not intended to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contract any of the authors.This is intended merely to provide a regulatory overview. It is not intended to be comprehensive, nor to provide legal advice. Should you have any questions on this or on other areas of law, please do not hesitate to contract any of the authors.

Authors