New trade act approved for a more level playing field

New trade act approved for a more level playing field

The National Legislative Assembly has approved the Trade Competition Act, which is working towards upgrading Thailand's trade standards to international levels.

Due to come into force on Oct 5, the law is aimed at creating a fairer competitive platform for all businesses while creating more room for small and medium enterprises (SMEs) to compete, and help protect consumer rights.

The law is also being welcomed by businesses, which see the law as step to help Thai businesses modernise.

Deputy Commerce Minister Sontirat Sontijirawong said the bill paves the way for a more level playing field when competing with foreign firms and should result in the introduction of fairer management.

"This version of the law has been amended on several issues to make it more modern in line with Thailand's changing business landscape, particularly when the nation is moving to embrace Thailand 4.0," said Mr Sontirat.

Some penalties will also be increased, for instance, to prevent the formation of monopolies. Consumers will have greater bargaining power when filing complaints if they can prove their rights have been infringed upon by a business.

Critics say an independent commission is another welcome addition for trade disputes.

Members would be selected from independent agencies and experts instead of the panel being governed by the Commerce Ministry's Department of Internal Trade, which essentially leaves room for the Commerce Minister to dictate terms.

Mr Sontirat said the older version of the law had been running for the past 18 years but no big business had ever been brought to trial despite numerous claims of them resorting to unfair practices to dominate the domestic market.

Moreover, the commission's chairman governed the organic laws under the previous iteration of the Act, particularly when overseeing market dominance, and was also subject to the authority of the Commerce Minister, making the laws vulnerable to political interference.

However, in the newly-amended Trade Competition Act 2017, the members of the independent Office of the Trade Competition Commission will be selected from trade-related organisations to help enhance independence and minimise political interference.

The members will be the permanent secretaries of the finance, commerce, justice and industry ministries, the secretary-general of the National Economic and Social Development Board, the secretary-general of the Consumers Protection Board, the chairman of the Thai Chamber of Commerce (TCC) and the chairman of the Federation of Thai Industries.

The new act also has a wider scope of power for the Trade Competition Board, including the power to consider and issue rulings, provide advice to the cabinet and government authorities on public policies concerning trade competition, prescribe administrative penalties, and settle cases, he added.

However, certain sectors such as telecommunications and energy that are already regulated by specific legislation on trade competition, will be exempt from this act, he said.

This latest amendment also includes a merger control scheme, which ensures that a merger that may result in a substantial reduction of competition must be reported within seven days from the date of the merger.

The act also covers tougher penalties on companies or businesses that are found to be in pursuit of market dominance or "hardcore cartel" in order to prevent any company from gaining a majority of market share or completely dominate the market.

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