Mr Krisda Piampongsant, former Vice Chairman, Trade Competition Commission of Thailand, discussed the history of competition policy in Thailand, the work of its restructured Trade Competition Commission, the challenges that the Commission faces in its work and the sectors that it watches most closely for signs of unfair trade practices.
THAILAND STUDIES PROGRAMME WEBINAR
9 December, Friday – Thailand’s 2017 Trade Competition Law transformed the Thai Trade Competition Commission into an independent agency with enhanced powers — including enforcement powers — to prevent monopolies and unfair trade practices. The webinar discussed the history of competition policy in Thailand, the work of its restructured Trade Competition Commission, the challenges that the Commission faces in its work and the sectors that it watches most closely for signs of unfair trade practices. The webinar also addressed issues such as the relationship between competition policy and innovation in Thailand and the consequences of unfair trade practices for economic inequality.
The ISEAS Thailand Studies Programme convened a webinar with Mr Krisda Piampongsant, who recently stepped down as the vice chairman of the Trade Competition Commission of Thailand, as a speaker. The webinar attracted the interest of 39 attendees.
A summary of the discussion points is outlined below:
The speaker began his presentation on trade competition in Thailand with the recent disruptions in the global economy and their impacts on the Thai economy. The speaker identified the COVID-19 pandemic, the war in Ukraine, and disastrous climate changes which affected the contours of trade competition practically everywhere in the world. These incidents have changed the status quo of the global competition landscape with global production shrinking, and global supply chains disrupted. The speaker argued that these changes brought about a new global paradigm shift in production, especially setting the foundations for new business models such as the mobile economy and digital platform economy.
The Trade Competition Commission of Thailand (TCCT) is a unique development in Thailand as it was recently created as an independent law enforcement organisation with full power to adjudicate as well as to carry out criminal and administrative sanctions and remedies. The Commission is empowered by law to bring criminal infringement before the intellectual property court and the international trade court. Both courts are deemed administrative courts, but they have been actively involved in determining and scrutinising the rulings of the TCCT. The fines collected by the TCCT have been remitted back to the treasury.
The current 2017 Trade Competition Act is a reform law which replaced the former Trade Competition Act of 1999. The former Competition Office under the 1999 Act was set up under the Ministry of Commerce, and the Board of Commissioner was headed by the Commerce Minister.
The 1999 Act covered only criminal offences and penalties. To bring the Competition Office up to the international standard, the 2017 Trade Competition Act introduced the establishment of an independent organisation whose functions could now provide for administrative penalties for anti-competitive conduct, abuse of dominance and restrictive agreements. The rest of the new law covers proceedings that follow the administrative sanctions which apply to (1) unfair trade practices,( 2) non-hardcore cartels, (3) merger controls, and (4) unfair cross-border agreements.
The 2017 Trade Competition Act also assigns to the TCCT the power to issue guidelines, regulations, investigation orders, merger controls and other remedies.
The TCCT only had 24 staff during the first year. Now it has grown to 140 staff after five years with young lawyers and economists running the investigation along with the sub-committees selected by the commissioners. The commissioners started with advocacy in the first year of the TCCT, and new complaints come in exponentially as the nationwide advocacy was introduced.
In the second year, the commission turned to SMEs’ competition policy. The National Economic and Social Development Council (NESDC) in its 13th National Development Plan has asked the TCCT to create a competition index which would be an aggregation of parameters to construct a composite index of competition in Thailand. The TCCT and the NESDC are trying to translate this index into meaningful and strategic enforcement targets to address wealth inequality and income distribution.
Digital food delivery and digital platform economy came under the scrutiny of the commission during the COVID-19 pandemic. The TCCT had issued guidelines for the digital platforms for food delivery which might abuse the power of their market dominance against small restaurants. Even before COVID-19, the hotel and tourism sector was given attention as digital and online travel agencies might engage in the practice of price fixing across their platforms.
The speaker also noted that the modern-day economy is the economy of speed. Therefore, the TCCT is tasked with crafting a new regulation on the economy of speed, since the economy of speed is the key to the quick recovery of SMEs after the pandemic. The innovations in the digital transformation are creating a paradigm shift in the market and amidst this paradigm shift, Thailand’s competition laws and policies need to be monitored and evaluated more closely than ever.
The speaker observed that larger claims of traditional litigation have become fewer, whereas smaller claims on digital platforms have increased exponentially with the innovations’ rapid growth. The speaker stated that domestic mergers and acquisitions have become the high-value targets of the TCCT.
As one of the six key regulators in Thailand, the TCCT works in regular consultation with five other key government agencies that regulate the markets. The TCCT has entered into an agreement with the Electronic Transaction Development Agency (ETDA) to draft a regulation aimed at the digital market similar to the European Union’s Digital Services Act, and Digital Markets Act. The TCCT has also signed advocacy MoUs with a number of Thai universities as well.
The speaker noted that the TCCT needs to evolve with future business changes and practices. There have been some public concerns regarding the TCCT’s enforcement standard.
The speaker then moved on to explain the international cooperation between ASEAN and APEC, and the future of competition and sustainability in Thailand. Thailand needs to assure the international community that Thailand has capable regulators and can become a hub for foreign investment, a centre of supply chain as well as an international commercial hub.
As far as regional harmonisation is concerned, the speaker is optimistic that ASEAN can achieve regional competition harmonisation, and Thailand will meet the APEC standard of competition. ASEAN Framework of Competition is going to be finalised in the near future, and the speaker hoped that this will be a pathway for the integration of ASEAN members’ competition policies.
The speaker concluded with a few recommendations: (1) to jointly conduct regional market studies on cross-border services and products among ASEAN members, (2) to jointly conduct investigations of cross-border cartels and mergers, and (3) to develop a roadmap for harmonised digital markets and e-commerce information exchange standard and common procedures among ASEAN members.