History of Thailand’s Trade Competition Law
Trade Competition Law is an economic law that is relatively important for the domestic economy and trade system in terms of the creation of sustainable economic growth, technological development, and innovation launched in the market. Moreover, consumers could benefit from the competition which offers them a variety of products with good quality and a more reasonable price to choose from.
In the developed countries, the law is enacted so strictly that it is entitled as the ‘economic constitution’ which entrepreneurs, regardless of the size of their business: small, medium or large, have to observe equally. However, the structure of most of the marketplace and service in Thailand is the monopolistic competition market and oligopoly market which benefit entrepreneurs operating large businesses who can exercise their existing power to easily take advantage of or limit the business opportunity of their business rivals who operate smaller businesses. Therefore, there must be a specific law which aims to protect the competition in the market and prevent the monopoly and unjust trade which is the core concept of the law called “Competition Law” or “Antitrust Law”.
The history of the Competition Law in each country varies. Several countries created this law by enforcement. For example, in Asia, America forced Japan to have a law called the Anti-Monopoly Act after the second World War aiming to open the market to resist the domination by the large business group which was then called ‘Zaibatsu’.
In Indonesia, the law was originated due to the imposition by the International Monetary Fund (IMF) and in Singapore and Vietnam, the law was initiated by the agreement on the Free Trade Area (FTA). For Thailand, this law was not created due to the enforcement by any organization or country but because of the demand from the citizen. Thailand is also the first country that enforced the Competition Law in ASEAN.
Thailand’s Competition Act has developed from พระราชบัญญัติป้องกันการค้ากำไรเกินควร พ.ศ.2490 which had been constantly revised. In the past, the price regulation was practiced at the destination of the product, the selling place, which was the retail price followed by the observation of the wholesale price. Later on, the trading system was changed. There were both oligopolistic and monopolistic markets. The retailers would sell their products at the price that was set by the originating point which resulted in the fact that consumers were forced to buy products at an expensive price. As the attempt to revise the price regulation was not accomplished, the Excess Profit Prevention Act. B.E. 2490 was developed into Price Fixing and Anti-Monopoly Act B.E. 2522 Act in order to prevent the entrepreneurs to build any monopolistic power over certain activities such as to limit the number of products to be sold which leads to the shortage of products that consequently increases of the price of products.
Later in 1991, During the term of Mr. Anand Panyarachun as the Prime Minister of Thailand, certain incidents that are related to the Competition Law. For example, some of the leading car dealers barred other dealers not to import the car brand that they sold Therefore, the question arose whether this action was deemed to be the exercise of monopolistic power and the incident instigated discussions over the free trade competition.
The then Department of Internal Trade appointed a drafting committee for the Competition Law which was cooperated by scholars who were resourceful and expert in law from several universities. The scholars also became a part of the committee and it had taken a rather long period until the drafted Competition Law reached the consideration process of the cabinet. It took several rounds of proceedings before the approval and that the draft Competition Law was proposed for the consideration of the National Legislative Assembly of Thailand. However, the parliament was dissolved, therefore, the drafted Competition Law was not approved. Later in 1997, when General Chavalit Yongchaiyudh was the Prime Minister of Thailand, the draft was proposed for the consideration of the House of Representatives, nevertheless, the dissolve of parliament occurred again.
Finally, the drafting process of the Competition Law had to be restarted in 1998 when Mr. Chuan Leekpai was the Prime Minister. The drafted Competition Law was endorsed from the Cabinet which led to the approval of the Office of the Juridical Council and the House of Representatives. The draft law became the Trade Competition Act B.E. 2542 and become effective 30 April 1999. During the period of the effectiveness of the Trade Competition Act B.E. 2542, there were 96 cases regarding the trade competition processed in the consideration of the Trade Competition Council and there were 84 cases that were successfully investigated. The Council reached the conclusion to terminate 81 cases and transfer 3 cases to prosecutors. However, the prosecutor ordered not to sue which means that there had been no cases regarding the trade competition that were brought up to the consideration of the Court of Justice. The main reasons that supported the fact that none of the cases could proceed to the decision are that the commitment of crime is not completed in terms of the legal element and the inability to find sufficient evidence to charge the criminal.
The problems of the Trade Competition Act B.E. 2542 could be concluded as follows;
1) The lack of effectiveness in law enforcement
The delayed process of investigation, the law does not cover the commitment of the crime beyond the kingdom, the punishment is not in accordance with the severity of the committed action (The sentence to be imprisoned for the misdemeanor may cause the accused to litigate to the very end), The trial is not brought to the criminal proceedings of the judge who has special expert.
2) The insufficient inclusion of law
The law does not include the format of behavior and the changed structure of business which does not align with the universal standard. The exemption of law enforcement for the state enterprise which creates inequality with the private sector.
3) The dependence and interference for law enforcement
In the past, the law enforcement was interfered and conditioned for the administration of work, personnel and budget and there was also the lack of skillful personnel with special expertise.
Under the administration of the National Council for Peace and Order (NCPO), on 22 May 2016, the National Council for Peace and Order (NCPO) introduced the policy to revise rules, orders ,and regulations to be aligned with the changed situation. The government under the administration of General Prayut Chan-O-Cha proposed the policy to develop Thailand to be a country aiming to become a Trading Nation and the policy to develop the Thai economy in the form of “Thailand 4.0”. The Department of Internal Trade under the Ministry of Commerce managed to revise the Trade Competition Act B.E. 2542 since the main legislation in certain contexts was registered to be appropriate for the trade and economic situation during that period. Previously, many countries used to decree their legislation with specific objectives like Thailand which no longer accommodated the changed commercial situation. Another important factor for law enforcement in Thailand is the structure of the council and the institute that enacts the law. The core importance of the enforcement is designated to guide the supervision by using the structure and method of the cases case proceeding for criminal law that has a long process for law enforcement and also for the Burden of Proof. The long processes did not only impede the promptness to bring the culprit to persecution, but also failed to suppress or ameliorate the economic effect resulted from the limitation of the trade competition that the culprit created in time.
As a consequence, the delay caused the overall distorted and failed economic and trade system. The Department of Internal Trade of the Ministry of Commerce revised the Trade Competition Act B.E. 2542 by drafting the Trade Competition Act B.E….to propose to the cabinet which was later approved and designated by the Cabinet on 9 December 2014 to draft the Trade Competition Act B.E…. as a bill of high level of importance and of urgency. The bill was categorized to be on the Urgent List 1 to encourage the efficient revision of the law to be more modern and to be in accordance with the altered situation and to build assurance for entrepreneurs who operate their business domestically and those who operate their business internationally. The Act also supported the trade and investment atmosphere with the intention to emphasize the convenience, rapidness, and decrease in the citizen’s burden.
The intention of the Act also includes the concordance with the policy to develop the country to become a Trading Nation, and with the government’s economic development in the form of “Thailand 4.0” model. The Trade Competition B.E. 2560 was published in the Government Gazette on the 7th of July B.E. 2560 and was effective since the 5th of October B.E. 2560.