Contributed By Baker McKenzie
The Trade Competition Act B.E. 2560 (2017) (TCA) is the primary competition legislation in Thailand. Sections 54 and 55 of the TCA prohibit any business operator from acting jointly with another business operator(s) to undertake a joint arrangement that will create a monopoly, or which will reduce or limit competition regarding any goods or services. The guideline issued by the Trade Competition Commission (the “Commission”) considers various kinds of arrangements, including those not in writing (such as verbal and tacit agreements).
The Commission is the statutory body established to enforce the TCA. The Commission works at the Office of the Trade Competition Commission which is set up to undertake administrative work for the Commission. The Commission and the Office of Trade Competition Commission are known collectively as the "OTCC".
While cartel matters are adjudicated by the Commission, its decisions can be appealed to the Administrative Court of Thailand. See 4.8 Available Forms of Judicial Review or Appeal.
The TCA provides two forms of penalties – criminal penalties and administrative penalties, depending on the materiality of the offence.
Criminal penalties apply to serious offences including so-called hardcore cartels (anti-competitive agreements among competitors on sale or purchase prices, limitation of quantity or output, bid-rigging and territory or customer allocation). Penalties include a fine of up to 10% of the turnover in the year of violation and up to two years’ imprisonment, or both. If the offence is committed in the first year of operation, the maximum fine imposed is up to THB1 million.
Administrative penalties apply to less serious offences, including non-hardcore anti-competitive agreements (anti-competitive agreements among competitors on quantity reduction, jointly appointing the same exclusive distributor to distribute same products and set the same trade terms). The penalties include a fine of up to 10% of turnover in the year of violation.
Additionally, third parties who suffered loss or damage as a result of a competition law infringement will have the right to seek relief through civil proceedings.
Any persons who have suffered damages can challenge cartel behaviour or the effects thereof in the form of damage lawsuits. They are entitled to file claims for civil damages against companies that participated in cartels.
In filing a lawsuit for damages under paragraph one, the Consumer Protection Commission, or associations or foundations that the Consumer Protection Commission recognises under the law on consumer protection, have a right to file a lawsuit for damage on behalf of consumers or members of the associations or foundations, as the case may be.
A lawsuit for damages must be filed within one year from the date the person suffering damage came to know or should have known the cause of such damage.
Cartel or prohibited joint conducts are prescribed in section 54 and section 55 of the TCA.
The TCA establishes two main types of prohibited joint conduct:
Hardcore Joint Conduct (Section 54)
Competing business operators are prohibited from engaging in the following forms of joint conducts that result in a monopoly or a reduction or restriction of competition in the market:
Section 54 does not apply to any transaction executed by and between business operators who have a relationship in terms of policy or control in accordance with the rules prescribed by the Commission (ie, companies within single economic entities).
Other Joint Conduct (Section 55)
Business operators are prohibited from the following forms of joint conducts which result in monopoly or reduction or restriction of competition:
Exemptions (Section 56)
Section 55 does not apply to:
The TCA does not specify the statute of limitations for each type of offence committed under the Act. Therefore, the general provisions concerning the statute of limitation under the Thai Penal Code and the Thai administrative laws would be applicable.
For the violation of a hardcore joint conduct provision which carries criminal penalty, the statute of limitation is ten years.
For violations of non-hardcore joint conduct provisions which carry administrative penalties, because the Thai administrative laws do not establish the limit in time within which the authority or state official is prohibited from issuing an order against the private sector, strictly speaking there would be no time bar for the Commission from imposing the administrative fine on the business operator for the violation which would amount to the administrative penalty under the TCA. However, it is possible that the OTCC may adopt a ten year statutory period since it is a general statutory period under Thai law.
If the conduct occurs entirely in foreign jurisdictions but have effect on the Thai market, the OTCC would have jurisdiction over that case.
The TCA does not stipulate any provision regarding principles of comity, and to date there has been no precedent explicitly mentioning the application of principles of comity in relation to the enforcement of the TCA.
In terms of cartel enforcement and investigations, there have been no changes in policy or practices resulting from the COVID-19 pandemic. Following the COVID-19 pandemic, which increased the importance of online platform operators, the OTCC focuses more on unfair trade practices engaged by online platform operators due to its immediate impact on other small and medium business operators.
After receiving a complaint, the OTCC must first conclude that there are grounds for investigating a potential violation under the TCA before it can commence an administrative investigation. The Secretary General of the OTCC is empowered to gather facts and evidence, as well as to submit a preliminary opinion to the Trade Competition Commission.
The Secretary General can also appoint officers to form a special task force to carry out the investigation. The special task force will have a broad scope of power to investigate facts and gather evidence, such as summoning witnesses, issuing a subpoena for evidence, entering business places, or taking samples of goods for examination. The special task force will have only one month from when it was appointed to complete the initial investigation.
Having investigated all the facts and evidence, the Secretary General will form an opinion to be proposed to the Commission, who will make the following decisions:
Dawn raids are possible under Thai law. The OTCC has the power to conduct a raid when it considers it necessary in order to search and seize or gather documents, accounts, registrations, or other evidence for the benefit of investigation and to proceed a case under the TCA.
Generally, a warrant would be required to conduct a dawn raid. However, the OTCC does not need a warrant to conduct a dawn raid if there are reasonable grounds to believe that, in delaying the obtaining of a search warrant, the evidence or the property is likely to be removed, concealed, destroyed or transformed.
Dawn raids cannot be conducted during the night without a warrant, except when it is the business hours of the entity under investigation.
An entity subject to dawn raid must co-operate with and facilitate the officers conducting the raid. Failure to facilitate the officer could render the business operator liable to a penalty under the TCA. Moreover, refusing to co-operate could be perceived as an attempt to obstruct the officials in the execution of their duties.
Where a search is made under a warrant, the limits to the powers of search will be as provided in the warrant issued by the court. Where a search is conducted without a warrant, the OTCC has the power to confiscate documents as well as request access to computers and emails.
The TCA contains certain offences relating to not facilitating or non-cooperation with the OTCC’s investigations, in particular:
Under the TCA, the OTCC is empowered to interview related persons on the premises being inspected. Therefore, officers and employees could be required to respond to interviews/questions. However, in practice, it is possible to inform the officers if such employees do not have information required by the officers.
Any information provided verbally would be recorded in writing. It would be read over to the individual, and after correction (if any), be signed by the individual.
Officers or employees have a right to legal counsel (whether in-house or external). Legal counsel can be involved throughout the investigation process. Where a business operator is required to provide documents or evidence, legal counsel can assist to review those documents and/or evidence and provide advice. Where an officer or employee is being interviewed, they may also be accompanied by legal counsel, however, the OTCC may require that counsel does not respond on behalf of the officer or employee.
Where there is a dawn raid, a business operator can also reach out to legal counsel and request that officials wait for the legal counsel to arrive, provided that the legal counsel will arrive within a reasonable timeframe.
There is no requirement for individuals to obtain separate counsel. However, for hardcore cartel offences, individuals (ie, directors or responsible persons for us acts) can also be subject to penalties. Therefore, it may be appropriate for such individuals to obtain separate counsel.
The principal initial steps that defence counsel should undertake during the initial phase of enforcements should be as follows:
The OTCC may issue a written request for:
Other types of information could be obtained in dawn raids (see 2.5 Procedure of Dawn Raids). Further, a leniency programme, if implemented, could play an important role for the OTCC when obtaining information.
There is no distinction between information that is available by searching on a local computer and information that would have to be sent into the jurisdiction. A company or individual must provide such documents or information in relation to the subject matter of the investigations, even if the information is located in other jurisdictions or stored in electronic form in the cloud.
Pursuant to the Criminal Procedure Code, privilege is available to prevent the disclosure of any confidential document or fact entrusted or imparted by a party or witness to the lawyer in their capacity as a lawyer. The laws provide that when a party to the case or a person is required to give testimony or produce the aforesaid evidence, they are entitled to refuse to produce such evidence.
However, the court may order that such party or person give or produce such evidence if it is of opinion that the refusal is groundless.
Please note that the provisions on privilege only apply in court proceedings or criminal investigations. The law is silent when it comes to other proceedings.
Privilege against self-incrimination is available as general right under the Constitution of Thailand.
As mentioned in 2.4 Spoliation of Information, the TCA provides for offences in relation to the non-cooperation/obstruction of the OTCC’s investigation, which carry a sentence of imprisonment, a fine, or both.
The OTCC are entitled to request and/or confiscate any materials which they reasonably consider to be necessary for their investigation. Therefore, any documents containing confidential or proprietary information can also be obtained by the OTCC. Documents of third parties are not under exceptions. However, the TCA has a provision to ensure that information confidential in nature should not be disclosed. Such obligation also applies to OTCC's officials.
The defence counsel for the target of a cartel investigation raises legal and factual arguments by making written statement to the OTCC once being notified of alleged violation or during the investigation. Defence counsel also have an opportunity to present arguments during investigation.
The OTCC is empowered to fine a business operator who violates the TCA in accordance with guidelines issued by it. Although to date, there are no specific guidelines with respect to leniency, it is envisioned that the OTCC could use its discretion to favourably reduce the administrative penalty for persons who assisted in identifying the prohibited conduct, in a similar way to leniency schemes in other countries.
In general, the OTCC will request for interview or a written statement (along with other evidences) from the company under investigation and the company may have to send an employee who has the knowledge or was involved in the investigating matter to attend the interview or give a statement because such employee has relevant input. In this case, the statement is given on behalf of the company.
The TCA grants the OTCC a rather broad authority for fact-finding. Apart from inquiring the company, the OTCC may request from any person (including other operators in the same industry) an interview or a written statement, as well as any document or evidence. Therefore, the OTCC can issue a request letter directly to the employee. In such a case, the employee will be giving a statement on their behalf.
In doing so, the OTCC has to issue an official request letter detailing the interview date and time or the documents required from the employee. Failure to comply with the request letter may result in criminal liability, as noted in 2.4 Spoliation of Information.
The OTCC may, at its discretion, issue to any person (including target company) a request letter for an interview, documents or evidence as it deems necessary for the fact-finding. Failure to comply with the request letter may result in criminal liability, see 2.4 Spoliation of Information.
Since the OTCC has the authority to conduct fact-finding from any person as it deems necessary, it is possible that the OTCC may do so to the entities operating outside Thailand. Nevertheless, it may be difficult for the OTCC to enforce the request or penalty for compliance failure against entities which are not located within the OTCC's territorial jurisdiction.
In practice, it is also possible that the OTCC may request the company under investigation to facilitate the authority by co-ordinating with and obtaining such document from the entities operating outside of Thailand. This is provided that the company under investigation has certain relationship with the entities operating outside of Thailand, eg, being affiliates or trading partners.
The OTCC has a plan to implement inter-agency co-operation with other governmental agencies within Thailand. The co-operation is likely to be in the form of linking or granting the OTCC with an access to the corporate databases of each governmental agency. However, to date, there has not been an official announcement on whether such co-ordination has been successfully implemented.
The information that is likely to be shared with the OTCC includes information relating to merger and acquisition, change of shareholding structure, and import/export sales volume.
The OTCC has certain co-operation agreements in place with foreign competition agencies for knowledge exchange. However, there has not been any official record that the co-operation extends to investigation or case enforcement.
The OTCC has the authority to initiate an investigation and issue a decision imposing criminal and administrative penalty for all offences under the TCA by itself. After a complaint is filed, or the OTCC becomes aware of any potential violation of the TCA, the OTCC will conduct a fact-finding process to confirm if there is merit to the case and propose the Commission to approve the case initiation. If an approval is granted, then an ad-hoc sub-committee will be appointed to handle the investigation. Subsequently, the OTCC, via a sub-committee, will issue to the alleged defendant a written notification of charges brought against such person and request an interview or submission of evidence.
The information submitted by the interested parties to the OTCC will be kept confidential by the OTCC, and the TCA does not explicitly provide that the defendant has the right to obtain such information from the OTCC. Therefore, the request for such information may be made by the defendant and will granted by the OTCC on a case-by-case basis, provided that the disclosure must be for the benefit of the investigation or any proceedings of the OTCC.
After the delivery of a decision, the alleged defendant must challenge the decision with 15 days from the date of receiving the decision in order to be eligible to appeal the OTCC's decision to the Administrative Court. The OTCC is then required to address the objection made within 30 days. If the OTCC's response is still unsatisfactory, the alleged defendant may submit a claim to the Appeal Court to revoke or revise the OTCC's decision within 90 days from the date the party knows or should have known the ground of appeal.
The actions that may be brought by the OTCC are limited only to criminal and administrative actions.
The TCA nevertheless allows the interested party to claim for civil damages against the person who violates the TCA. The parties wishing to bring a civil action, Consumer Protection Board, or consumer protection organisation, have to submit a complaint to the civil court having jurisdiction over the case to claim for damages. The statute of limitation for claim of damages for violation of the TCA is one year from the date the injured party becomes aware or should have become aware of the grounds for claiming damages.
Enforcement actions will generally be brought against all relevant parties for the same offence and relevant facts. In case where the defendant is a company, the director or authorised person of the company will also be alleged with the same offense and subject to the same proceeding as the company. It is unlikely that the parties would be able to request for a separate proceedings or investigation.
The burden of proof is varied in different type of proceedings.
For proceedings initiated by the OTCC, the OTCC may impose an order when it can be reasonably believed that the relevant party violates and will violate the TCA.
For administrative proceedings, the court is empowered and can take active role in the fact-finding process, while the person making a claim has the burden to prove that their claim is true (except which such claim is a general knowledge or indisputable fact). The administrative court’s fact-finding will rely heavily on documentary evidence.
For criminal proceedings, the burden of proof lies with the claimant and it is assumed that the defendant is not guilty until proven otherwise.
In an investigation to impose criminal or administrative penalties under the TCA, the OTCC will act as the fact finder and applies the law to the facts.
In an administrative court proceeding, the court will act as the fact-finder and in the criminal proceeding, the court will consider the evidence gathered by the police and submitted by the parties.
Currently, the OTCC relies heavily on the evidence submitted by the parties under the investigation and other relevant parties that submit the evidence to the case as required by a request letter. Nevertheless, the OTCC may, at its discretion, gather information from other sources available to them, including evidence from other jurisdictions and evidence submitted voluntarily by other interested parties.
Please note that a leniency programme has not yet been implemented by the OTCC.
In summary, for criminal court proceeding, the evidence considered will be limited to those submitted by the parties to the case. The evidence is inadmissible if such evidence has not been obtained legally. The following evidence is generally inadmissible, except when allowed at the discretion of the fact finder:
For administrative court proceedings, the evidence is not limited to those submitted by the parties to the case, but extends to those found by the fact-finder or submit by other interested parties. Evidence not submitted by the parties to the case is admissible on the condition that the parties to the case are given a chance to consider, review and introduce evidence to prove otherwise.
Most experts are either economist or academics who are an economic, market or technical experts. The experts may be retained by the parties under investigation or the OTCC.
As noted, client-attorney privilege is recognised, but may be rebutted by the order of the court in court proceedings if it views that the privilege is groundless.
Regarding multiple or simultaneous proceedings, they may be possible where the violation of the TCA concerns multiple defendants and the case against them are proceeded in parallel.
It is also possible that multiple proceedings may occur when the OTCC imposes a cease and desist order on the defendant during an investigation to prevent the defendant from continuing the violation or commit another violation of the TCA, and the defendant fails to comply with the same. In such a case, another proceeding or violation of the OTCC’s order may be brought against the defendant in parallel with the ongoing investigation.
The Commission is empowered to determine the penalties for the violation of the cartel provisions of the TCA (including the power to settle the case on the violation of Section 54 of the TCA on hardcore cartels which carries criminal penalties).
When imposing penalties, the Commission must take into consideration the severity of the violation and impact to the system or competition in the market. In most decisions of the Commission, the penalties would often be imposed on both corporate entities and individuals (eg, a person responsible for the violation of the TCA or failing to take action resulting in the violation).
At the moment, the Commission has not published a formal guideline on settlement, or even a leniency scheme. Nevertheless, in practice and in our experience, the Commission would generally take into account the offenders’ co-operation with the investigation and handing over useful information for the investigation. This co-operation will be factored in when the Commission determines the penalties (along with others factors such as severity of the violation and impact to the system or competition in the market).
Thai courts are not legally bound by the decisions of the Commission. Therefore, the courts remain at their freedom to conduct hearing and trial, while the decision of the Commission could be relied upon among other evidences in the proceedings.
Many pieces of Thai legislation contain requirements on the qualification of the directors for corporate entities, including, for example, the Public Company Limited Act, Foreign Business Act, and Direct-Sale and Direct-Marketing Act. Nevertheless, according to the TCA, if the offender agrees to settle the penalties as imposed by the Commission, the criminal case will be deemed settled and the offender will not have criminal record.
A person violating the hardcore cartel provision will be subject to a criminal penalty of up to two years’ imprisonment, a fine of up to 10% of the turnover in the year of violation, or both. If the violation is committed by a juristic person, an individual (eg, a person responsible for the violation or failing to take action resulting in the violation) shall also be subject to the same penalties.
The Commission is empowered to determine the penalties based on various factors, including the severity of the violation, impact to market or general consumers, and a level of co-operation of the offender during the investigation (eg, to provide useful information on a timely and efficient manner as requested).
There is no concept of the civil sanction or penalties under the TCA. However, the administrative penalties (ie, a fine) will be imposed by the Commission for the violation of the non-hardcore cartel provision (ie, a vertical cartel or certain forms of horizontal cartel on certain matters having less severity to the competition in the market). The fine can be imposed at the rate of up to 10% of the turnover in the year of violation.
The TCA also provides the right to claim for civil damages, see 3.7 Procedure for Issuing Complaints/Indictments in Civil Cases.
Being a relatively new regulator, the Commission has not yet made clear if the effective compliance programme can be used as a factor in considering imposing penalties. Nevertheless, the Commission is required by law to thoroughly consider and take into account all relevant factors before passing its decision and impose penalties. As such, it is currently believed that if it can be proven that the management has taken reasonable care in preventing the violation of the competition law (by putting in place a compliance programme in the organisation), this would play a role in the Commission’s determination of penalties (especially for the individual’s penalty).
The TCA and its subordinate legislations do not provide mandatory consumer redress at the moment. However, a person suffered damage from the violation is entitled to file a civil case for compensatory damages, see 5. Private Civil Litigation Involving Alleged Cartels.
An appeal process for the Commission’s decisions and orders is available. For the offences with administrative penalties (ie, non-hardcore cartels), the party may submit the appeal to the Commission within 15 days from the date the party receives the order. The Commission must also inform the parties of the appeal right and process in its order. The party may also submit the appeal to the Administrative Court within 90 days from the date the party knew or should have known the grounds of appeal.
For the offences with criminal penalties, the case will be prosecuted by the prosecutor pursuant to the criminal procedural law if the offender refuses or does not settle the case within the timeline prescribed by the Commission.
A person injured due to a violation of the TCA is entitled to the right of civil action to claim for compensatory damages. The Consumer Protection Committee or a consumer protection-related association or foundation certified under the Consumer Protection Law is also empowered to initiate such action on behalf of the injured person.
The action to claim damages must be submitted to the court no later than one year from the date the injured person is aware of or should have been aware of the incident/violation.
A class action lawsuit is available for the violation of the TCA. In order to initiate the class action lawsuit, the plaintiff has to be able to substantiate the basis for the class action to the satisfaction of the court. These include, among others, the fact that the members of the class action group are the interested parties and can be identified, the common nature of the violation committed against the group of injured persons, and the class action lawsuit is more efficient and fairer to the parties than the regular lawsuit.
To date, there has not yet been a cartel case brought to the consideration in Thai court. With that said, the passing-on defences have, therefore, never been tested before the court.
The evidence gathered from an investigation or proceeding is admissible.
To date, there has not yet been a cartel case brought to the consideration in Thai court. Thus far, experience has shown that the timeframe for the court to render a judgment could be many months due to the court process (eg, scheduling the hearings, submission of evidences, etc).
The claimant may include compensation for attorney fees as part of its request in the lawsuit. The court is empowered to grant such compensation at its discretion.
Legally speaking, unsuccessful claimants are not obliged to pay defence costs or attorney fees. However, if a defendant includes compensation for the attorney fees in the request part of the statement of defence, the court is empowered to grant such compensation accordingly.
The TCA provides that any claim for compensation from the violation of the TCA shall be under the jurisdiction of the Central Intellectual Property and International Trade Court. Submission of an appeal to the higher courts is permissible. This is, however, under the condition that the court of first instance has reviewed and accepted the appeal for the consideration of the appeal court.
There is no other pertinent information.
The website of the OTCC provides basic guidance and a comprehensive flowchart on the process for the adjudication of claim both where the violation carries criminal penalties (ie, hardcore cartels) and where the violation carries administrative penalties.
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