Big deals prompt monopoly law rethink

Big deals prompt monopoly law rethink

The Office of Trade Competition Commission (OTCC) is set to revise criteria concerning the market monopoly law to plug any loopholes and leave no room for debate when big merger and acquisition deals are up for consideration.

Sakon Varunyuwatana, chairperson of the commission, said the OTCC is gathering public input to improve the criteria to prevent monopolies from being formed.

The market dominance criteria come under the Trade Competition Act which came into effect in 1999 and public opinion is being collected until June 27 via www.otcc.or.th

Mr Sakon said the planned amendment is to ensure clarity and leave no room for interpretation. He insisted it has nothing to do with Charoen Pokphand Group's (CP) acquisition of the Thai business of Tesco earlier this year.

According to Mr Sakon, there are two criteria for market dominance: one is where a market share in the previous year amounts to more than 50% and at least 1 billion baht in sales; and the other involves the merger of three business operators with a market share in the previous year of over 75% and at least 1 billion baht in sales.

He said the amendment is targeting the second category as the regulations leave room for debate as to whether each of the three business operators must have at least 1 billion baht in sales or if just one needs to.

He said if the market share exceeds 75% after the acquisition, the merger is likely to be ruled as a potential monopoly.

He noted that CP's acquisition of Tesco Lotus falls in the first category, adding that the group is likely to file documentation with OTCC over the purchase next week.

"We want the rules to be clear and spare any interpretation. This has nothing to do with CP Group because its deal falls into the first category," he said.

The OTCC's anti-monopoly law amendment came after public concern over the potential merger of the supermarket brands.

In March, CP's US$10 billion purchase of Tesco Lotus' businesses in Thailand, triggered concern over potential market dominance because CP already owns the country's 7-Eleven concession and the Makro cash-and-carry stores, all of which operate in the same market sector.


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