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Sun Legal Update: Understanding Thailand’s Trade Competition Act

Sun Legal Sunbelt Update

In recent years Thailand enacted the Trade Competition Act and established the Trade Competition Commission, which has passed major guidelines that give the criteria for offenses under the Act.

The TCC is an active body, not only issuing new subregulations earlier this year, but also taking on cases and enforcing the rules against companies that had broken the laws.

The act covers abuses of a dominant position by a company including forcing distributors in selling only their product as well as forcing businesses to establish in specific geographical areas, and price fixing including setting unfair prices among others.

Guidelines were issued in regard to “fair” and “unfair” commercial practices relating to credit terms with small and medium-sized enterprises, which are defined as manufacturers having no more than 200 employees and an annual revenue of no more than 500 million baht. Sservice providers also are considered SMEs if they have no more than 100 employees and annual revenue of no more than 300 million baht.

Unfair practices include changes to the credit term or terms of the contract without justification or without 60 days advanced notice.

Franchisees are also protected under the act. Franchisors must notify the franchisee in the nearest location of the new store expansion and give the right of first refusal to operate the new store and provide a response period of at least 30 days. The requirements are exempted when the franchisee fails to meet performance standards and is notified of the failure in advance.

Violators face fines and potential criminal charges if it involves hardcore horizontal arrangements or abuses of a dominant position. Sun Legal can assist you in bringing a complaint to the TCCT if your business has faced unfair competition. Contact us using the form below.

Business indices rise

The Federation of Thai Industries reported that the industrial sentiment index rose for the fourth consecutive month to its highest level in 32 months thanks to increased domestic demand and rising tourism.

The Consumer Confidence Index also rose for the fourth straight month to an eight-month high based on the loosening of Covid-19 restrictions and the return of tourists.

Thailand, Singapore sign business agreements

Thailand and Singapore signed five memorandums of understanding last week covering intellectual property, agriculture and sustainable businesses and an agreement to jointly invest in cruise ports for tourism.

Singapore is looking to Thailand for support for its investment in energy, electric vehicles, smart city businesses and carbon credit trading. The two countries will work together on port investment for cruise ships. They also agreed to facilitate electronic trade and protect consumers. Singapore is Thailand’s fourth largest trading partner in Southeast Asia and eighth globally.

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