A. Draft a Relatively Detailed Competition Law
The first observation is that in designing competition authority and drafting a competition law, it is important to assess the integrity and capability of various institutions that may be involved in the drafting and implementation of the law. For example, in the case of Thailand, the legislative process is generally much more transparent than the political process, as it is subject to parliamentary scrutiny, while cabinet meetings and decisions are often made with little monitoring and participation by outsiders, be they the opposition party, the media, or the public. Under such circumstances, it would be preferable to draft a relatively detailed competition law to minimize the discretionary power of the administrative authority, in particular when it is prone to political influences.56 It was perhaps a mistake that the Thai competition law leaves a vital element of the law-i.e., the dominance and mergers thresholds-at the discretion of the administration.

B. Ensure Effective Checks and Balances Within the Regime
One may argue in this case that, even if the thresholds required for implementation were available, the law would have never been enforced or enforced only selectively. That is why it is also important to establish effective checks and balances within the system. An appellate body that is independent from the commission may help to ensure impartiality of the decisions of the Commission. In Thailand, members of the appellate body are also appointed by the cabinet,57 which does not bode well for independence from politics. However, Thailand has had a relatively respectable and independent Administrative Court that can help check that procedures taken by the competition authority comply with the due process and transparency prescribed by the Administrative Law.58

Recently, Thais have grown accustomed to resorting to the Administrative Court when the administration issues orders or make decisions that are in clear conflict with public interest.59 It is only a matter of time before the TCC's neglect of its duty to enforce the law and its non­compliance with the governance standard prescribed in the Administrative Law will be challenged in the Administrative Court.

C. Prescribe Procedural Transparency, Accountability, and Due Process in the Competition Law
Most administrative laws provide only general rules designed for broad application to all sorts of administrative procedures and thus are inadequate to guarantee an effective and objective implementation of the competition law. It is therefore recommended that the competition law contain provisions concerning the governance standard of the implementing procedures, such as those concerning information disclosure, procedures for handling complaints, handling of conflict-of-interest issues of commissioners and staff of the Competition Office, and ex parte communications with outsiders. A competition authority in a developed country is likely to comply with higher governance standards already in their general working environment. This is usually not the case for most developing countries. That is why one needs to spend much time and effort in building good administrative governance to ensure a successful competition regime.

D. Build a Strong Competition Constituency at the Grassroots Level
In a country like Thailand, where political will to enforce the competition law is clearly absent, reliance on public pressures from consumer organizations, civil societies, academic institutions, NGOs, and the media is vital for a competition law to succeed.

In this regard, building public awareness about competition law and policy becomes a prerequisite. One must realize that while a competition law can be passed overnight, an effective implementation will take much longer where local political, legal, institutional, and social environments do not yet support it. It is important that the academics work closely with NGOs and the media. The academic role is to provide education and information on the issues at hand to other parties, while NGOs and civil societies are activists. They are vocal and have the special capability of organizing social movements on a grand scale. Well-informed NGOs are a formidable force facing the government. The public and the media, on the other hand, have their own specialized role in reaching out to the masses. A journalist can usually communicate with the public better than an academic. Hence, academics and journalists make a very effective team if they work closely together.

There are also positive signs that, six years from the promulgation of the competition law, a competition culture has begun to take root in Thailand, albeit with little contribution from the competition regime itself. For example, a planned privatization of the state-owned electricity generating authority was abruptly halted one day before the planned IPO in November 2005 by the Administrative Court.60 A planned hostile takeover of Matichon, a newspaper with a reputation for being independent, by a politically connected entertainment conglomerate called "Grammy" was cancelled due to massive public protests.61 In another case, the application to list on the Thai stock exchange by Thai Beverage Co. Ltd., the producer of Chang Beer who was involved in tied-selling, was blocked by protests from civic and religious groups.62 Companies with notorious competition records that may have eluded state sanctions in the past, now face public sanctions.

In the case of the IPO by the state-owned electricity company, several NGOs filed the case in Administrative Court on the grounds that the government was privatizing a state monopoly without a proper regulatory body in place and that the process was illegitimate. Three years ago, these groups were against any sales of state assets. Today, they appreciate the importance of competition and regulation. It is a great milestone for Thailand, indeed. Similarly, a merger was once considered a business decision that did not concern the public. Today, critics cite the need to implement the competition act in order to systematically prevent mergers and acquisitions that lead to excessive market concentration.63

Passing a competition law and implementing it is always an uphill battle. This is because the law not only runs against the interests of large and powerful businesses, but it is also often associated with western capitalism or free-market propaganda. It can easily fall prey to nationalistic fervor that is, in some cases, drummed up by local monopolists themselves. Thus, competition policy advocacy will be as important, if not more important, than competition adjudication. A country needs to build a wide competition constituency among the academics and civil society, as well as the media. It is indeed a Herculean task that is worth undertaking.


Footnotes

56. In Thailand, the Minister alone nominates the candidate for the highest ranking bureaucrat, the Permanent Secretary, for Cabinet approval. The Permanent Secretary then nominates the second-highest ranking bureaucrats, the Director-Generals of various Departments within the Ministry, with the endorsement of the Minister, for Cabinet approval.
57. Trade Competition Act, § 42 (1999), available at http://www.apeccp.org.tw/doc/ Thailand/Competition/thcom2.htm.
58. Tulsathit Taptim, Person of the Year Ackaratorn Chularat.' Defender of the Charter, THE NATION, Dec. 30, 2005.
59. For example, in November 2005, the Consumers Foundation succeeded in securing an injunctive relief order from the Administrative Court to postpone the initial public offering of shares of the state electricity generation company. The Foundation accused the government of failing to hold public hearings and alleged that the process was in contradiction with the local law. The injunctive order came just one day ahead of the government's planned flotation of the shares. Kenneth Crawford, Court Short-circuits Giant Thai Energy IPO, ASIA TIMES ON-LINE, Nov. 15, 2005, http://www.atimes.com/ atimes/Southeast Asia/ GK I7Ae02.html.
60. A Needed Ruling in Favour of Caution, THE NATION, Nov. 16, 2005, http://www.thaiwac.ias.chula.ac.th/Thai/Preview E.php?qID=247.
61. Matichon Takeover Canceled, THE NATION, Sep 15, 2005, http://www.komchadluek.net/breaking/ read.php?tang=en&newsid=82397.
62. Thai Beverage PLC: Brewer Aiming for Dual Listing, THE NATION, Jan. 4, 2006, http:/iwww.nationmultimedia.com/2006/O 1/04/headlines/index.php?news=headlines_l95680 99.html.
63. Planned Merger Awaiting Discussion with Matichon, THAI RATH, Sept. 15, 2005, http://www.thairath.co.th/thairath I /2548/page 1/sep/ 16/p 12.php.

 
* "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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