Anti-Trust & Trade Competition Regulation
Anti-Trust and Trade Competition Laws
On 5 October 2017 Thailand’s new Trade Competition Act (the “2017 Act”) replaced a trade competition law that had been enacted in 1999. The 1999 law had been dismissed as a “paper tiger” and the 2017 Act was supposed to give teeth to Thai trade competition laws, end or at least curtail monopolistic practices and clarify ambiguous provisions in the 1999 law. The 1999 law had been criticized because it did not provide adequate guidance on what constitutes a “market” for purposes of identifying market dominant players, was unevenly enforced and because the one area where there was some enforcement, “unfair business practices”, it was vague and seemed capricious.
The Trade Competition Commission (“TCC”) formed after the 2017 Act was enacted, issued regulations referencing “unfair trade practices”, but those regulations were primarily aimed at vertical restraints on trade. Horizontal mergers and restraints on trade garnered very little attention in Thailand. Coming from a U.S. or European perspective this seems odd. Horizontal restrains on trade benefit local monopolies and businesses, but often at the cost of reducing transparency, raising prices, and harming consumers. Regulators and law enforcement agencies in the U.S. and Europe therefore focus more attention on activities that may result in horizonal rather than vertical restraints on trade.
What is the Difference Between Horizontal and Vertical Restraints on Trade?
A horizontal restraint on trade can occur when a company acquires another company in the same industry or market. This sort of acquisition can reduce consumer choice, create a monopoly, reduce innovation, and drive up prices. They are therefore subject to greater scrutiny and challenge by regulators.
A vertical merger is a merger of two companies that provide different supply chain functions for a common good or service. This typically involves more control of the supply chain process. Although some vertical mergers are problematic, they often reduce costs and increase efficiencies for the companies involved and consumers.
Tighter control of dealership agreements is an example of a vertical restraint on trade. It may protect dealers, but it is hard to see how they benefit consumers.
Analytics understands Thai trade laws and international norms on trade competition laws. Analytics was here when the 1999 law was passed and saw how it was how it was enforced and not enforced. Analytics understands the difference between vertical and horizontal mergers. Analytics understands the importance of market definition. Because of Analytics international background and expertise in economics and law, it takes an international perspective of Thai trade competition laws and asks probing questions about those laws that other firms may be unwilling or not competent to ask.
Analytics has also assisted on compliance with non-Thai trade competition laws. At the instruction of foreign clients and counsel, it conducts compliance interviews and has conducted depositions in Thailand for foreign civil proceedings. Analytics is not your typical local Thai law firm.
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