Review of Industrial Organization 21: 185–204, 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
The New Competition Law in Thailand: Lessons
for Institution Building
Faculty of Economics, Thammasat University, Bangkok, Thailand
Abstract. The new competition law in Thailand, which replaces the totally ineffective 1979 anti-
monopoly law, aims to enhance the competitive process by improving the enforcement mechanism.
Unfortunately, the Trade Competition Commission’s rulings on the ﬁrst two complaints about al-
legedly illegal conduct by two large companies with obvious market power were disappointing.
Although political pressure was a signiﬁcant factor affecting the decisions, this paper argues that
there were also other important issues. The complex legal, business, and economic problems in both
cases, the weakness of the competition law, poor institutional design, inadequate resources and lack
of experience among the ofﬁcials involved have all contributed to the unfortunate decisions, and will
certainly affect the performance of competition law enforcement in the future.
Key words: Competition institution, competition law, market domination, tie-ins.
JEL Classiﬁcations: K21, L4, L5.
The new competition law promulgated in Thailand in 1999 has received wide pub-
lic attention and created high expectations that it would enable the prosecution of
the monopolists that have been exploiting consumers. Two major cases were ﬁled
with the Ofﬁce of the Trade Competition (OTC) in late 1999. After almost six
months of investigation, the Trade Competition Commission (TCC) ruled that the
two accused ﬁrms did not technically violate the law because the ministerial noti-
ﬁcation on the deﬁnition of market dominance had not yet been decreed, and so the
charges against both ﬁrms were dropped. The rulings led to widespread criticism
in the press. Since then the public seems to have lost faith in the enforcement of
Thai competition law.
This paper analyzes the causes of this failure to enforce the law. In fact, the
rulings were hardly a surprise for any observer who had closely monitored the law,
as there had been several newspaper reports based on informed sources at the Min-
The author is particularly grateful to Ammar Siamwalla, David Round and Suthee Suppanit for
their helpful suggestions on an early draft. The views expressed and any errors or omissions are the