DFDL Thailand

In January 2022, Thailand’s Trade Competition Commission (“TCC”) issued three merger decisions that provide important guidance on the application of Thailand’s merger regime. The three issued decisions interpret what constitutes a business operator for purposes of the TCA.

In January 2022, Thailand’s Trade Competition Commission (“TCC”) issued three merger decisions that provide important guidance on the application of Thailand’s merger regime. Pursuant to Section 51 of the Trade Competition Act B.E. 2560 (2017) (“TCA”), a business operator who carries out a business merger which may result in a significant reduction of competition in any market shall either notify the result of such business merger to, or obtain permission from, the TCC.

The three issued decisions interpret what constitutes a business operator for purposes of the TCA. Each decision involved mergers between two foreign entities. In determining whether each of the transactions involved business operators, the TCC focused on two key issues:

  • Does the relevant merging entity or an entity that would have the status of a Single Economic Entity with the merging entity exist in Thailand?
  • Does the relevant merging entity generate revenue in Thailand?

With respect to the latter question, the TCC provided further guidance on how to interpret generating revenue in Thailand with its focus on a physical or legal presence in the jurisdiction. In one of the decisions, although a merging entities was stated to generate revenue in Thailand through online channels and domestic retail and wholesale distributors, the TCC stated that neither it, nor any entity that would have the status of a Single Economic Entity with it, existed in Thailand. On the basis of the lack of presence in Thailand, the online revenues were not sufficient for the merging party to be considered a business operator under the TCA. 

In two of the three decisions, the TCC determined that one of the merging parties was not a business operator under the TCA. Since both parties were not business operators, the TCC found that the merger did not fall within the TCA’s merger regime. In the remaining decision, both merging foreign parties had affiliates operating in Thailand and were both deemed to be business operators. The TCC found that this merger was therefore subject to the TCA’s merger regime.

While these decisions are only legally binding on the parties involved; in practice, particularly since they have been published, it is reasonable to presume that the TCC will follow these interpretations. While, a court may interpret the application of the merger regime differently; we are not aware of any challenge to these decisions and nor would we expect the parties to challenge them.

 

The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.

 

Contacts

 

Kraisorn Rueangkul
Partner, Thailand
kraisorn@dfdl.com

David Fruitman
Regional Competition Counsel
david.fruitman@dfdl.com

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