Effective from 1 February 2022, the updated post-closing merger notification form requires substantially more information from parties, though the statutory period for submission remains unchanged. The authority’s new guidance on unfair trade practices introduces a de minimis threshold of 10% to the definition of “superior bargaining power”. A draft amendment to the SME Credit Term Guideline proposes changes to the definition of an SME. The TCCT has been conducting a law review and focus-group surveys to assess the efficiency and enforcement of the competition law, the first such mandated assessment since the law came into effect in 2017.
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- TCCT updates the post-closing mergers notification form
- TCCT publishes new unfair trade practices guideline
- Public consultation commences for credit term guidance amendment
- Authority undertakes a review of competition law enforcement in Thailand
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TCCT updates the post-closing mergers notification form
Effective from 1 February 2022, the updated post-closing merger notification form requires substantially more details about the transaction, the merger parties, and the relevant markets etc. However, the statutory period for submission and the supporting documents required as part of the submission remain unchanged at seven calendar days from the date of closing. This statutory period does not take into account public holidays or weekends.
The previous form has been in place since Thailand’s merger control regulations came into effect in 2018. This form was relatively short and less detailed and so filings could be prepared relatively quickly. The new form requires information such as market definition, market shares of the merger parties and their competitors in the relevant market, details of the group companies of the merger parties, and the turnover structure of the merger parties and their group companies.
With this updated form, preparation well ahead of closing is highly recommended. Failure to submit a post-closing filing in time can result in a one-time fine of up to THB 200,000 and up to THB 10,000 for each day of delay.
TCCT publishes new unfair trade practices guideline
The Trade Competition Commission of Thailand (TCCT) has published a new guidance on unfair trade practices, which introduces a de minimis threshold of 10% to the definition of “superior bargaining power”. A market share of 10% or more remains the relevant threshold for a presumption of market power.
A presumption of superior bargaining power is established if a business operator’s economic reliance on another business operator for a good or service amounts to at least 30% of the revenue or cost of the sale or purchase of the good or service by the first business operator; or less than 30% but not less than 10% if switching to do business with another business operator is impossible or very costly.
The factors for determining whether conduct is considered unfair remain unchanged; these include whether the conduct (i) can be justified from the business, market, or economic perspectives; (ii) has been engaged in by the parties and not in the ordinary course of business, and (iii) has been specified in writing and notified to the business partner reasonably in advance.
The new Section 57 guidance underwent a public hearing in 2021 and became effective on 19 February 2022, replacing the 2018 guidelines. The new guidance provides similar examples of conduct that could be considered unfair trade practices but categorizes them into the various sub-sections of Section 57.
Public consultation commences for credit term guidance amendment
The draft amendment to the SME credit term guidance issued in December 2021 proposes changes to the definition of an SME. In the current version, the satisfaction of either the number of employees or the turnover will qualify a firm as an SME. The amendment proposes that where the number of employees threshold is satisfied, the revenue threshold also has to be satisfied. This means that essentially, the determination of an SME rests exclusively on the revenue generated by a business, regardless of how many employees it has.
The main objective is to carve out businesses that are able to generate substantial revenue with a small number of employees (e.g., less labor-intensive industries such as tech companies, having work outsourced to third parties). The other provisions of the credit term guidance remain unchanged.
Comments from the public can be accepted until 20 April 2022.
Authority undertakes a review of competition law enforcement in Thailand
The TCCT has been conducting a law review and focus-group surveys to assess the efficiency and enforcement of the Trade Competition Act. It is mandated to do so at least every five years. This review is the first assessment since the law came into effect in 2017.
The survey discusses various aspects of the TCA, including the scope of exemptions for enterprises (e.g., state enterprises); appropriateness of criminal and administrative penalties currently imposed; the potential introduction of a leniency program, and extraterritorial enforcement.