The Trade Competition Commission of Thailand (TCCT) has published a new guideline on offenses relating to unfair trade practices under section 57 of the Trade Competition Act 2017 (“New Guideline“).
The New Guideline underwent a public hearing in 2021 and has become effective on 19 February 2022. It replaces the first guideline on unfair trade practices which was issued back in 2018.
The key changes from the 2018 guideline are as set out below.
- Re-grouping of conducts — The examples of the conducts that could be considered an unfair trade practice under the New Guideline are largely similar to the examples provided under the 2018 guideline. However, the conducts are re-grouped as follows:
|Type of conduct||Examples of prohibited conduct|
other businesses(without justification)
|– Excessive pricing or predatory pricing|
– Quantity fixingExclusive dealing
– Preventing other business operators from participating in trade associations or meetings
– Interfering with other business operators
|Unfairly imposing trade terms which restrict or obstruct other businesses(without justification)||– Discriminatory behaviors|
– Requiring other business operators to procure goods or services from itself or a designated business operator, or do business with certain business operators
|Abuse of market power or superior bargaining power(without justification)||– Requiring other business operators to purchase or offer other goods or services that are not relevant to their ordinary course of business|
– Requiring other business operators to accept certain terms and conditions that differ from the agreement (such as unreasonably adjusting the price of goods)
– Requiring other business operators to provide certain interests to itself or othersImposing unreasonable sales or performance targets
– Refusal to deal
- Economic Loss — As Section 57 will be triggered if the conduct also causes the other business operator to suffer economic loss, the guideline also provides a few examples of such economic loss. In addition to loss of income, loss of business opportunities and loss of market value which was already provided in the previous guideline, the New Guideline also adds loss of market share and increased costs and expenses to the list. It also elaborates the loss of business opportunities to include loss of opportunity to manufacture, buy or offer goods/services and the loss of opportunity to generally do business with other businesses.
- Superior Bargaining Power — A de minimis threshold of 10% of the turnover of the business operator is introduced in determining superior bargaining power.
Under the New Guideline, a superior bargaining power of a business operator is presumed if the other business operator (i.e., counterparty) relies on its goods or services (i) for at least 30% of its turnover, or (ii) for at least 10% but less than 30% of its turnover but it cannot or does not have the option to switch to alternative suppliers or switching to other alternatives would incur excessive costs. The turnover here refers to the turnover of the counterparty.