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The New Rules for Market Dominance

The Trade Competition Act B.E. 2542 (1999) came into affect on May 1, 1999. The main objective of the Act was to create free and fair trade for Thailand’s business community. However, the aim of the Act has not been achieved during the past eight years and it could be argued that the Act had become a ‘Paper Tiger’ since it was promulgated. The inefficacy of the Act has largely been due to that fact that no Royal Decree had been issued determining the meaning of ‘Market Dominance’. Since enactment, many consumer groups have tried to push past governments to issue the Royal Decree to define Market Dominance but until recently, their efforts were ignored. The lack of action on this issue may well have been due to the fact that the definition of Market Dominance is likely to have an adverse effect on the business groups that back political parties.

The Commerce Minister, Mr Krirkkrai Jiraphaet however, has now acted and a new definition of Market Dominance was proposed at the Cabinet on January 9th. After serious discussion, the definition of Market Dominance has now been approved. The approved definition will be turned into a Royal Decree and will then be promulgated in the Government Gazette. It is expected that the Royal Decree will be promulgated in late January or early February 2007.

Market dominance will now be defined as follows:

  1. Any business operator selling any product or rendering any service, whose market share in the past year was 50 percent or higher and whose sale proceeds in the previous year amounted to 1 billion Baht or above, or
  2. The first three business operators of any product or service, whose market share during the previous year was a total of 75 percent or higher and whose sales proceeds during the past year amounted to 1 billion Baht or above with the exception of a business operator whose market share in the past year was below 10 percent or a business operator whose sales proceeds of the past year were below 1 billion baht.

It is worth knowing that being an entity that has market dominance is not an offence in itself. An entity which has market dominance is still able to carry on business or trade as normal. It becomes an offence only when the entity is in breach of a prohibition under Section 25 of the Trade Competition Act of B.E. 2542, for instance:

  • fixing the buying or selling prices of goods or services in an unfair manner,
  • imposing coercive conditions on customers in an unfair manner,
  • halting, reducing or restricting services, production and import without reasonable cause and (4) intervening in the business operations of others without reasonable cause.