The Commission concurred with the subcommittee that the cable operator was a monopoly, but decided that the case was not within its jurisdiction because cable television is a regulated industry.²⁰ The Commission handed over the case to the Mass Communication Organization of Thailand ("MCOT"), which regulates the cable television industry, on the premise that complaints about the rates and packages offered should be handled by a sector-specific regulatory body rather than the general competition authority. The MCOT confirmed that the tariff was not excessive because the company was facing an operating loss.²¹ The MCOT made no attempt to scrutinize the expense and cost figures of the cable monopoly, a normal procedure for a well functioning regulatory body. The company, however, began to offer the less expensive option in order to comply with the conditions stipulated in the concession. But the channels available in the less expensive package were so unattractive that it did not present subscribers with a real choice. It was only in March 2005 that the company effectively launched different packages in order to widen its customer base after the market became somewhat saturated with other competitors.²²

B. Case Study # 2: Whiskey and Beer Tied-Sales
In the second case, the Surathip Group, manufacturer of Chang Beer and Elephant Brand Beer, and holder of an exclusive concession to produce liquor/whiskey, allegedly tied the sale of its beers to the sale of a highly demanded whiskey/liquor in order to take market share from its competitor in the beer market.²³ While the Commission found that the practice of tying beer to whiskey sales constituted an obvious breach of Section 25 of the Trade Competition Act, which addresses abuse of dominance, it also found that retailers, rather than the manufacturer, were guilty of tying the products. This finding is odd, given that retailers had no incentive to pursue such a practice unless the manufacturer demanded it. The Commission also ignored the fact that the manufacturer held a 25% equity share in many retail stores, meaning that these retailers were likely to have acted on behalf of the major shareholder. Despite the finding of a violation of the Act, the Commission did not undertake legal actions against the retailers because Section 25 of the law was unenforceable in the absence of a dominance threshold.²⁴

C. Case Study # 3: Unfair Trade Practices in Large Retail Trade
In the third case, local suppliers and smaller retail stores filed complaints against large foreign multinationals such as Tesco of the UK and Carrefour and Casino²⁵ of France.²⁶ While foreign retail companies compete rigorously among themselves, their extremely aggressive business culture had caused tremendous friction with both large and small domestic suppliers. The complainants alleged that some of these aggressive business practices, such as mandatory enrollment in price promotion schemes, preferential treatment for house brand products, and various fees including a marketing fee or slot allowance, were unfair trade practices.

In January 2003, to appease a public outcry about unfair trade practices of the large hypermarkets, the TCC proposed to set the sector-specific threshold market share for dominance at 25%. Academics, businesses, and civil society heavily criticized the proposal as discriminatory, claiming it would apply only to retail businesses. A year later, a new Minister with close family ties to a large local conglomerate involved in the retail business withdrew the proposed threshold while it was still awaiting approval of the Cabinet.²⁷

According to the minutes of the Commission's meeting in May 2004, the Commission held that the sector-specific dominance threshold was inappropriate and instead a general threshold should apply across all industries.²⁸ While this view is certainly correct, the move was a mere tactic to further delay the establishment of the definition of dominance and, hence, the enforcement of the law. The secretariat office again was tasked to study and propose the optimum threshold market share and sales value. The whole process had to begin anew, and no real progress was made.

Once again, to appease the persistent public discontent about large retail stores' trade practices, the Thai Trade Competition Commission decided to issue a "Retail Industry Code of Ethics." The Code, a guideline for retailers rather than a law, describes practices considered "unfair," including sales of products below prices quoted on the invoice, retail price maintenance, refusals to deal and price discrimination, exclusive dealings, and product linkage. The Code is very broad in nature, merely listing types of practices considered unfair in the absence of a valid efficiency defense. It does not shed light, however, on what types of defenses would be acceptable to the Commission. As expected, the voluntary Code has had very little impact on the conduct of large retailers.²⁹

D. Case Study # 4: Exclusive Dealings in the Motorcycle Market
The fourth and last study is a landmark case. It is the first case where the TCC found an infraction of the law and decided to take legal actions against the defendant. In December 2004 Honda, a motorcycle manufacturer that holds approximately 80% of the market share, allegedly practiced exclusive dealing by prohibiting retail stores from exhibiting and selling competing brands in the same store. Such an act, when pursued by a supplier with significant market power, constitutes an abuse of dominance, an infraction of Section 25 of the competition law. Retailers complained that the manufacturer threatened to cease the supply of its products and to open competing stores next door if they refused to become an exclusive agent, meaning that retailers could not sell other competing brands.

Interestingly, the Commission found that the company had violated section 29 of the law, which concerns unfair trade practices, rather than section 25. Section 29 concerns trade practices associated with unequal bargaining power between a seller and a buyer, such as that between a large discount store and a small-scale supplier, or a franchisor and a franchisee. Moreover, unlike section 25, section 29 is enforceable without establishing the market dominance of the alleged business. The fact that this case was handled differently from the whiskey and beer abuse of dominance case raised suspicions of selective enforcement of the competition law in favor of powerful local businesses and against foreign companies with little or no political connections.

Footnotes

20. The Trade Competition Act 1999 does not address the issue concerning the overlap of jurisdiction between the general competition authority and the sector-specific regulatory body.
21. It should also be noted that the MCOT enjoys a 6% revenue share generated by the particular cable television operator. In many developing countries, such conflicts of interest that can hamper a regulator's impartiality are commonplace.
22. Naspers, Ltd., Annual Report (Form 20-F), (Sept. 30, 2005), available at http://www.naspers.com/pdfs/20-F.pdf.
23. U.N. Conf, on Trade & Dev. [UNCTAD], Review of the Recent Experiences in the Formulation and Implementation of Competition Law in Selected Developing Countries, 23, U.N. Doc. UNTAD/DITC/CLP/2005/2 (2005), available at http://www.unctad.org/en/docs/ ditcclp20052_en.pdf.
24. Deunden Nikomborirak, Thailand, in COMPETITION POLICY AND DEVELOPMENT IN ASIA (Douglas H. Brooks & Simon J. Evenett eds., 2005).
25. In late 2005, a Thai partner bought back all equity shares of the "Big C" discount stores from the Casino group of France.
26. See Department of Internal Trade website, supra note 15 (list of complaints available in Thai); Nikomborirak, supra note 24, at 264-65 (table 8.7 lists complaints cases).
27. Kallaya Laohaganniyom & Noah Brumfield, Thai Competition Law, in GLOBAL
COMPETITION REVIEW: THE 2005 ASIA PACIFIC ANTITRUST & TRADE REVIEW (2005),
available at http://www.globalcompetitionreview.com/sr/sr_fullpage.cfrn?page_id=124.
28. See Department of Internal Trade website, supra note 15 (minutes of the meeting available in Thai).
29. See id. (Code available in Thai); Mark William, Competition Law in Thailand: Seeds of Success or Fated to Fail?, 27 WORLD COMPETITION 459 (2004) (English translation of the Guideline).