The Trade Competition Commission (the Commission) has issued draft notifications which are supplementary to the Trade Competition Act 2017 (the Act). The provisions of these draft notifications clarify and demarcate certain key terms and prescribe other procedures, which are necessary for the enforceability of the Act. A public hearing for these draft notifications was conducted on 5 September 2018.

Below is a summary of the draft notifications.

1. Mergers by way of purchasing assets or shares in order to control the policies or management of the company

The following purchases are considered purchases for the purpose of controlling the seller company’s policies, business management, administration and arrangements and are deemed "mergers”, which are governed by section 51 of the Act. Consequently, these purchases may require a pre-merger approval from or a post-merger filing to the Commission:

  1. Asset purchase – a purchase of more than 50 percent of the total assets value of another business operator relating or connected to the ordinary business operations of that other business operator;
  2. Share purchase –
    1. a purchase of shares, warrants, or other convertibles amounting to more than 25 percent of the total voting rights of another business operator under the laws relating to securities and the Stock Exchange of Thailand; and
    2. a purchase of more than 50 percent of voting shares of another business operator.

2. Post-merger filing – rules and procedures

The post-merger filing obligation will be imposed on mergers that may cause a substantive lessening of competition in a given market. Such merger is defined as any merger where, before or after the merger, there is a business operator generating from one billion baht of revenue, but which does not have a monopoly power or dominance over that market. The said revenue includes revenues of other business operators that the company has a policy relationship with or an authority over.

A monopoly is defined as a situation where, in a market, there is only one business operator who has the power to determine the prices and supply of its goods and services freely, and who has a revenue of more than one billion baht.

3. Pre-merger approval – rules and procedures

According to section 51, paragraph 2 of the Act, any merger which results in a monopoly or a business operator holding dominant position must be approved by the Commission. Any business operator contemplating a “merger” which requires an approval from the Commission would have to submit an application to the Commission and pay the relevant fees. Supporting documents to be submitted with the application include, for example, business integration plan, market analysis, market concentration and impact on competition assessment. The Commission cannot take longer than 90 days to complete the review of the application. If the business operator disagrees with the Commission's decision, it can appeal to the Administrative Court within 60 days of the decision.

4. Market dominance

Under the draft notifications, a business operator will be deemed as having a “dominant position in the market” if in that market: (i) it has 50 percent or more of the market share and sales turnover of more than one billion baht; or (ii) it is one of the three top business operators which have an aggregate market share of 75 percent or more, provided that it has sales turnover of more than one billion baht. The criteria is the same as stated in the current Act.

5. Rules, guidelines and procedures for imposition of penalties

The Commission has the authority to determine if and what penalties can be imposed on business operators violating the provisions of the Act. Penalties include imprisonment and fines, or both.

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