As mentioned earlier, a Commission's written decision on a particular competition case offers no finding-of-fact reports38 or rationale supporting the decisions of the Commission.39 The views of each commissioner are also unavailable, let alone a record of who is in attendance at these meetings. In fact, for the first few cases under deliberation in the year 2000, records of any formal decisions could only be found in newspaper interviews given by the Secretary of the Commission. Furthermore, no evidence, statistics, data, or interviews resulting from the investigations were available to the public. The minutes for those meetings became available to the public online only in 2005. But, as mentioned earlier, these minutes provided no information to support the Committee's decisions in the competition cases. It is likely that the posting of the minutes was done simply to comply with disclosure obligations stipulated in the Administrative Law. The appalling lack of information available on the TCC's website is clear testimony of the lack of transparency of the competition regime.40

It is interesting to note that many developing countries are quick to adopt western-style institutional structures and procedures when designing their regulatory regimes, be it the composition of the commissioners or the structural and financial independence of the organization. International advisors as well have a tendency to benchmark new competition regimes against those already established in more advanced economies. The problem is that many developing countries operate under a very different political, legal, social, and governance environment. Corruption and political intervention may run broader and deeper than what developed countries are accustomed to. Often rules, social and legal sanctions against favoritism and patronage, or conflicts-of-interest in the administration of a law are absent, weak, or lack compliance.

For example, the Thai Administrative Act, despite its relatively advanced status, is silent on rules concerning communication between commissioners and parties involved in a proceeding.41 Thus, commissioners are able to arrange private meetings with either party without any documentation of what information was submitted or exchanged. Such laxity leaves the administration particularly vulnerable to lobbying. Deunden Nikomborirak and Somkiat Tangkitvanich also found that the law concentrates mainly on procedures concerning the issuance of an administrative order that is binding on the parties but does not cover procedures involving the making of an administrative rule that is binding on all businesses.42 This explains why there has been very little transparency in the process of proposing the dominance threshold-an administrative rule-by the TCC.

The need to establish transparency is not limited to the enforcement procedure. Equally important is the selection process of commissioners. One of the most difficult tasks facing a developing country in setting up a regulatory regime is how to design a selection process that will beget commissioners that are immune to political influence and business lobbying. In such an environment, where the risk of regulatory capture is high, transparency and due process in both the selection of commissioners and the administration of the law is critical to the integrity and the effectiveness of the competition regime.43

It is unfortunate that governance issues are often neglected in the process of drafting a competition law. International benchmarking of laws is often focused on the substantive law and fails to examine whether the institution is independent from the executive power. An independent competition authority that lacks transparency and accountability can potentially inflict greater damage to the economy and individual businesses than one that is subject to ministerial oversight. This is because at the end of the day, while a politician is accountable to his or her electorate, commissioners of an independent institution are not held accountable to anyone.44

In the clear absence of political will and the administration's inability to withstand the interference of its political superiors to enforce the competition law, the fate of Thailand's competition law is in the hands of non-government stakeholders-i.e., the academics, the NGOs, civil societies, and the media. In an environment where money dominates politics, only public pressure can ensure the successful enforcement of a law that threatens the interests of powerful businesses.

This brings us to the third factor contributing to the failure of the competition regime in Thailand: the lack of public support for, and interest in, the law. Upon the inception of the law in 1999, public awareness and support for the law was clearly absent. Most NGOs at the time focused mainly on health and environmental issues, where the effects on the public are more clear, visible, and immediate. Competition law, on the other hand, was perceived as being about "business disputes" that did not involve NGOs. Worse, the word "competition" is often negatively associated with capitalism and free-trade, which left-leaning organizations stand against.

In the academic circle, knowledge of industrial organization is very limited. One study found that in the year 2000 only fifteen universities nationwide offered a course on industrial organization at the undergraduate level and only five at the graduate level.45From 1997 to 2001, there were approximately three to five dissertations that concerned industrial organization issues each year. With extremely limited education in the field, it is therefore of no surprise that there is very little research work on competition-related issues and very little comprehension of the subject among policy makers and law enforcers in Thailand.

The media, the private sector, and the average person also have little knowledge about Thailand's competition law and policy. Most could not, and still cannot, distinguish between "competitiveness" and "competition." Most will mistake competition policy for government measures that help promote the competitiveness of the local industry. In the complete absence of support and interest from the state, NGOs, academics, and the media, the law was doomed to fail.

IV. IMPLICATIONS OF THE LACK OF ENFORCEMENT
The lack of enforcement of the competition law has left small- and medium-sized enterprises ("SMEs") and consumers at the mercy of large incumbents with market power. Obvious anti-competitive practices in the whisky and beer tied-sale case expanded to include the tying of soda and bottled drinking water to whisky and other liquors at the expense of hundreds of large and small competitors in these markets. To counter the unfair practices, small local bottled water producers collectively placed a national television advertisement to condemn such acts. In the absence of strong enforcement or an official remedy by the state oversight body, this costly stunt by the local bottled water producers resulted in only a temporary restraint on such practices, which have since continued.46

In the case of the cable television monopoly, a series of price increases took place with impunity as the regulatory body, the MCOT, never took the initiative to scrutinize the provider's cost figures or examine whether the content offered in each package was commensurate with the fee charged. Because the company was unprofitable, the regulatory body presumed that the price charged to customers was not excessive and thus dismissed the claims of monopoly pricing. As a result, subscribers have been forced to pay increasingly higher monthly subscription fees as the operator continues to add new and very expensive channels, such as the Premiership Soccer League Channel, of which subscribers cannot opt out.47


Footnotes

38. In fact, the Subcommittee responsible for the cable television case produced a relatively comprehensive report that was submitted to the Competition Commission in the year 2000. It found that the cable operator did abuse its monopoly power by denying consumers the choice of a less expensive package, the silver package. It also questioned the need to increase monthly subscription rates given the company's massive financial savings from a merger with its only other competitor in the market in 1998. The committee failed to address any of the subcommittee's findings, besides that the cable television operator is indeed a monopoly in the relevant market. As mentioned earlier, it later decided to transfer the case to the sector regulator. The OTC also failed to inform the public about the existence of the particular report, which is currently available at http://www.info.tdri.or.th/ unpublishedpapers/.
39. Department of Internal Trade website, http://www.dit.go.th, which provides no details regarding the Commission decisions to pursue or not to pursue a case, let alone investigation reports. The commission's deliberation on a particular case is normally three lines long.
40. Trade Competition Commission, http://www.dit.go.th/eng (last visited February 21, 2006). The minutes of each of the nine Commission's meetings are available only in Thai.
41. This is known as the "ex parte" rule. The rule states that no party or participant in the proceeding shall submit ex parte communications to the administrator of the law and its employees regarding any matter pending before the authority. See FDIC Law, Regulations, Related Acts § 308.9, available at http://www.fdic.gov/regulations/laws/rules/2000-1900.html#2000part308.9.
42. Deunden Nikomborirak & Somkiat Tangkitvanich, Research Paper: Building Credibility for a Telecommunication Regulator 2-3, 28 (Thailand Development Research Institute, Thailand's Telecommunication Sector Reform Project, August 2002).
43. Regulatory capture describes a situation where a state regulatory body is influenced by the interest of the industry which it regulates. A detailed description of the term can be found in M.E. Levine, Regulatory Capture, 3 NEW PALGRAVE DICTIONARY OF ECON. AND LAW 267, 267-71 (1998).
44. For example, Nikomborirak & Tangkitvanich found that the independent telecommunications regulator is not accountable to any one since it has its own revenue from licensing fees and the law only requires it to report to parliament once a year. Commissioners can only be dismissed by a two third majority vote of all commissioners, rather than by the senate or the parliament to whom the commission submits annual reports. Nikomborirak & Tangkitvanich, supra note 42, at 2-3, 28.
45. Deunden Nikomborirak, A Survey of Industrial Economics, 4 THAMMASAT ECON. J. 116 (Dec. 2004).
46. Sairung Thongplon & Saowalak Cheevasittiyanon, Building Consumers' Alliance against Monopolies, in BUILDING CONSTITUENCY FOR COMPETITION POLICY AND COMPETITION LAW 8-1, 8-12 (unpublished manuscript), available at www.info.tdri.or.th/unpublished.
47. As mentioned earlier, according to a Subcommittee Report the alternative package, the silver package, did not represent a real choice for subscribers given the channels available and the tariff charged. This package was later called the "Bronze" package with a price reduction in March 2005. See supra note 18, at 29.

 
* "This article is published with the kind permission of Deunden Nikomborirak and the Northwestern Journal of International Law and Business.. This article orignally appeared of the Vol.26 No.3 Spring 2006 edition of theNorthwestern Journal of International Law and Business.
 

 

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