“Difference Between Trade Competition Act B.E. 2542 and Trade Competition Act B.E. 2560”

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  • “Difference Between Trade Competition Act B.E. 2542 and Trade Competition Act B.E. 2560”

The ability of the law enforcement to equally cover all business units, to be flexible and conforms with the altered economic and trading situation.

(1) The equal coverage of all business units

The original Act

To allow the exemption for State-Enterprises who are the monopolistic provider of the country’s infrastructure to be exempted from the enforcement of the law. This created unfair competition and ruined trading and investment atmosphere.

The revised Act

To allow the exemption for the actions of State-Enterprise, public organization and other state agencies who follow the cabinet resolution or law for the benefits of the public.

*In the case of the condition of the exemption is not applied, the enforcement of the law is effective.
(2) The proceeding covers the overlapped business (the affiliated business)

The original Act

The proceeding of the business practice only covers that of the juristic person.

The revised Act

The proceeding covers the businesses that are affiliated in terms of policy or authority to order. The proceeding is distinct, detailed and in conformity with business evidence The Single Entity principle will be utilized for the consideration of every practice (the number of shares or the right to vote) in accordance with international principle

- Power in the market: On the Dominance Position Market share and total sales are included
- Cartel It is considered to be one entity; therefore, it is not deemed as a violation
- Mergers and Acquisitions In the case of the joint of affiliated businesses, it is not required to seek permission or notify the joint of businesses
- Unfair Trade Practices In the case that the parent company is engaged or command, it is considered to be a culprit or the notification of joint business

(3) The revision of definition to be clearer, inclusive and easy for understanding (Not provided in the original Act)

To define the market, the definition covers the products which are replaceable in terms of the product (quality – price – utility) and geography (distance – area)

  • Define the competitive environment to make it clear that what factors are taken into consideration, the threshold is dominating the market.
  • To define the factor of the competition for a better understanding of the type of factors that could be brought up as a part of the consideration regarding the Power in the market: On the Dominance Position.

(4) The enforced rules have to be revised in 3-year time for the up-to-date, and for the compliance with the changed situation and trade practices.




2 The Act conforms with the international principle to supervise the competition and it could also be enforced effectively and promptly.

 

2.1Deterrence

(1) To open opportunities for the business sector to participate in law enforcement

The original Act

It is the authority of the Trade Competition Commission to issue any subordinate legislation, regulations, and orders.

The revised Act

The Trade Competition Commission has to be open to stakeholders’ opinions before the implementation.

-Entrepreneurs get informed and prepared. As well as the opportunity to provide feedback to clarify the rules that will determine beneficial to administer the competition and virtually unenforceable.

-The entrepreneurs acknowledge the opportunity and are prepared to give suggestions so the rules and orders to be implemented would not benefit the supervision of the competition and that the Act will be enforced.
(2) The request to receive the advance adjudication of practices

The original Act

The entrepreneur is unable to request the Trade Competition Commission to perform advance adjudication

The revised Act

The entrepreneur is entitled to request to the advance official adjudication from the Trade Competition Commission (The adjudication which is related only to the evidence given to the Office)

The entrepreneur is entitled to inquire about the Office should there be any cases that their practice is suspected to be illegal.

(3) The result of adjudication for the illegal practice has to be publicized to the public

The original Act

Not regulated

The revised Act

The Trade Competition Commission has to publicize the result of the adjudication to the public and report to the Cabinet.

*The entrepreneur may learn from the illegal practice and receive punishment so to be aware and refrain from the repetitive malpractice.
(4) To give opinions on the Government or state agency’s policy that obstructs the free and fair competition

The original Act

Not regulated

The revised Act

The Trade Competition Commission can give opinions or suggestions regarding the policy and administration of the Government that may be an obstacle for the fair and free competition of the entrepreneur.
2.2 The Suppression
(1) The Legal Punishment

The original Act

Every malpractice bears the same offense which is to derive criminal penalty: “3 years of imprisonment, fine not exceed 6 million baht or to be punished by both imprisonment and fine”.

The revised Act

• The legal punishment for the violation of law depends on the degree of crime for both the administrative penalty and the criminal penalty. The punishment will be in accordance with the principle of punishment for business units.

• In the case of criminal penalty, the Office of Trade Competition Commission is empowered to compare the fine and set the remedial mechanism for the victim.
Comparison of Punishment Table

The original Act

Practice
- Power in the market: On the Dominance Position
- Hardcore Cartel
- Others Cartel
- Unfair Trade Practices
- Mergers and Acquisitions

3 years of imprisonment, fine does not exceed 6 million baht or to be punished by both imprisonment and fine

The revised Act

Practice
- Power in the market: On the Dominance Position
- Hardcore Cartel
2 years of imprisonment
Criminal fine does not exceed 10% of the income of the year that the crime is committed (The Commission is authorized to compare the fine).


Practice
- Others Cartel
- Unfair Trade Practices
An administrative fine does not exceed 10% of the income of the year that the crime is committed.

Practice
- Mergers and Acquisitions
To join businesses without seeking permission: criminal fine for 0.05% of the value of the joint business.
To join businesses without notifying the Office: criminal fine.
(2) To enhance the effectiveness of the investigation protocol

The original Act

A police officer or prosecutor in the subcommittee of the investigation must only be government officers.

The revised Act

A police officer or prosecutor in the subcommittee of the investigation can be government officers or used to be government officers retired, resigned or transferred to another unit)

• It is approved to select the persons who are resourceful and have sufficient time to execute the job efficiently.
(3) The authorization for the Intellectual Property and International Trade Court to proceed the case with criminal penalty

The original Act

The Criminal Court is authorized to proceed with cases with a criminal penalty.

The revised Act

The Intellectual Property and International Trade Court is authorized to proceed with cases with a criminal penalty as they are experts on economic.
(4) To enhance the effectiveness and procedures to restrain the violated practices or the suggesting violated practices by elevating the penalty from criminal penalty to the administrative penalty.

The original Act

• In the case of the violation of the Trade Competition Commission’s order. It is stated to retrieve criminal penalties with 1-3 years of imprisonment, 2-6 million baht fine and daily fine charged in the amount of 50,000 Thai Baht until the practice is terminated. The court will be the entity to proceed with such the case.

• In the case of violation or violation-prone, the judge is the ruler. Therefore, the entrepreneur remains indifferent.

• In the case of violation of the Office of the Trade Competition Commission’s order and the court proved innocent, the culprit may encounter the imprisonment penalty due to the breach of the order of the Office of the Trade Competition Commission.

The revised Act

• In the case of the violation of the Trade Competition Commission’s order. It is stated to retrieve administrative penalty with fine not exceeding 6 million baht and daily fine charged in the amount of 300,00 Thai Baht until the practice is terminated.

• If the order is observed, the penalty will not be charged.

• If the order of the Trade Competition Commission is breached, the Office itself is authorized to charge with punishment throughout the time the violation committed.

• If the order is not observed and the fine is not paid on the administrative term, the Office is entitled to sue the case with the Administrative Court to seize the assets and sell by auction to get the money to pay the fine.

3.To elevate agencies supervising the competition to become the highly efficient unit possessing the qualities of “transparency – neutrality – justice” 

3.1 The independent competition commission that is free from interference

The original Act

Members of the Office of the Trade Competition Commission are recruited by position in the office and the Minister of the Ministry of Commerce as a judge. The Minister of the Ministry of Commerce: President The Permanent Secretary of the Ministry of Commerce: Vice President The Permanent Secretary of the Ministry of Finance: Vice President Honorary Commissioner: State agencies (6) Private sector (6) (with the approval of the Minister of the Ministry of Commerce). The Director-General of the Department of Internal Trade as a secretary.

• The Commissioners failed to perform their job on a full-time basis (the frequency of meeting attendance is 1-2 times per person at the average)

• The Honorary Commissioners in the Office were not sufficiently resourceful in terms of knowledge and skills in competition.

• The Commissioners had overlapped tasks: competition-related mission and management related mission (with the cooperation from the private sector)

• The private sector and international agencies did not confide in neutrality and justice of the Commissioners.

The revised Act

Members of the Trade Competition Commission are from the selection process and work on a full-time basis.

• Age 40-70 years old. The length of a term is 4 years and no member shall be in the Commission more than twice.

• He or She must be distinctively skillful, experienced, and expert and passed the selection.

• He or She does not engage in the overlapped benefits in both the business sphere and the political sphere.

• Upon the completion of duty, He or She must not work in the executive position in any business in partnership with the Office of the Trade Competition Commission.

The selection committee 9 members
Government Sector: the Permanent Secretaries of the following ministries: The Ministry of Commerce, the Ministry of Finance, the Ministry of Industry, the Ministry of Agriculture and Operatives, the Ministry of Justice. The Secretary-General of the following institutes: of the Office of the National Economic and Social Development Council and the Office of the Consumer Protection Board. The President of the Chamber of Commerce and Board of Trade of Thailand.
Private Sector: the President of the Federation of Thai Industries
3.2 The Office of the Trade Competition as an independent and highly effective agency

The original Act

It is a government unit as an ‘office’ in the Department of Internal Trade.

• The Office was not authorized to select personnel with skills in trade competition on their own.

•The compensation was not appropriate for a law enforcement unit.

• As the Office was not set as an urgent mission according to the Government’s policy, the consideration for the Office’s budget was considered to be the priority.

• The Office lacked proficiency and consistency in the enforcement as some of the officers worked in other units in the department temporarily and there was also the transfer of officers for appropriateness.

• The working mechanism was interfered by both the supervisor and the political side.

• The Office had constraints in supplying space and appliances for the Office’s administration.

The revised Act

The Office is a state agency that is neither a part of the government nor the state-enterprise.

• The Office has flexibility in workload, budget, personnel on their own; therefore, the adjustment of the Office’s structure to serve the tasks is effective and complies with the changed situation (under the rules of the Trade Competition Commission)

• The Office is authorized to set the qualification, to select the skillful personnel for itself and be able to pay them with appropriate compensation as working in the law enforcement unit which adheres to the principles of transparency, neutrality, and justice.

• To be free of interference in administration from the political side.

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