Trade Competition Commission Draft Announcement on Suggested Price List

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Trade Competition Commission Draft Announcement on Suggested Price List

In 1999, Thailand enacted the Trade Competition Act B.E. 2542 (1999) (“Act”), establishing the Trade Competition Commission. The Thai Ministry of Commerce proudly introduced this Act with the aim of attracting Free Trade Agreements (FTAs) from countries around the world, thereby enhancing international trade and investments. In 2017, the Thai government proposed a new version of the Act to address new challenges that the previous version did not cover.

The Act is of paramount importance to Thailand for several reasons. Firstly, they promote healthy competition, encouraging businesses to become more efficient, offer lower prices, improve product quality, and foster innovation. This ultimately benefits consumers by providing them with more choices and better access to goods and services. Secondly, the Act protects consumers from anti-competitive practices that could result in higher prices, reduced product quality, or limited options. By preventing monopolistic behavior and collusion, these laws safeguard consumer interests. Additionally, they help attract foreign investment by demonstrating the fairness and transparency of Thailand’s business environment, which can lead to increased economic growth and align with international trade standards, further enhancing the country’s competitiveness in the global market.

white water boat

Furthermore, the Act ensures a level playing field for businesses of all sizes, supporting the growth of small and medium-sized enterprises (SMEs) while preventing market abuse by larger companies. They foster consumer trust in the marketplace, which can lead to increased spending and economic stability.

One key provision within the Act is Section 54, which prohibits business operators from colluding in various ways such as fixing purchasing or selling prices or any trading conditions that affect the price of goods or services, limiting the number of goods or services produced, purchased, sold, or provided by each business operator, as agreed, knowingly establishing an agreement or conditions for one side to win an auction or a bid for goods or services, or allocating areas in which each business operator will sell, or reducing the sale or purchase of goods or services.

In practice, many manufacturers or wholesalers provide suggested price lists. However, these suggestions, when followed by wholesalers and retailers, can result in monopolistic practices, reduced competition, or the elimination of competition in a given market.

low angle photography of glass buildings

To address this issue, the Trade Competition Commission has been granted authority under Section 17(3) of the Act. This authority enables the Trade Competition Commission to regulate business operations and issue Announcements to enforce free and fair competition. In response, the Trade Competition Commission has drafted an Announcement on Suggested Price List Guidelines (“Announcement”).

Once enacted and enforced, this Announcement would prohibit business operators to conduct such as refusing to sell goods and services, reducing the sales of goods and services, or increasing the price of goods and services without reasonable grounds. This Announcement is intended to reinforce Section 54(1) of the Act, preventing monopolies, oligopolies, or any reduction in competition within relevant markets.

Author: Panisa Suwanmatajarn, Managing Partner.

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