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Thailand: Platforms warned against collusive pricing
The Office of Trade Competition Commission (OTCC) has warned online shopping platforms about the risk of participating in collusive pricing behaviour.
According to Visanu Vongsinsirikul, secretary-general of the OTCC, his office sent a letter to online shopping platform operators on April 12 in order to caution them to be wary and avoid collusive pricing behaviour.
Specifically, the letter warned non-mall sellers that are not official retail stores to avoid the practice of simultaneously raising commission fees for all categories of goods sold on such platforms. Such a practice could potentially constitute collusive pricing, Mr Visanu said.
If it were found that such behaviour violated the Trade Competition Act of 2017, the OTCC is ready to take legal action, said Mr Visanu. He referred to the issue of price increases causing concern within society and affecting both sellers on online platforms and consumers.
The OTCC has invited these online retail platform companies to discuss the matter and clarify the issue on March 24 and is closely monitoring their behaviour.
Both Lazada and Shopee declined to comment on the issue.
Mr Visanu told the Bangkok Post that during OTCC’s discussions regarding the issue with online retail platforms, both Lazada and Shopee explained that they increased fees as advanced planning concerning their marketing plans.
Both Lazada and Shopee increased their fees last year from 1% to 2% and on April 2023 from 2.14% to 3.21-4.28%, depending on the product categories.
Weerapong Goo, chief executive of Lazada Thailand, earlier said the increased fee would be used to “reinvest” in its infrastructure and services to serve both sellers and buyers.
Mr Visanu warned that if in future both these giant players were found to have raised their fees at the same time and offered the same fees on multiple occasions, they may then be considered to have breached Section 54 and Section 72 of the trade competition law and could face a fine equivalent to 10% of their revenue.
According to Mr Visanu, there are now more than 25 cases under investigation for truth-finding by the OTCC, and two cases have been already investigated and found guilty and are undergoing legal action, namely a supermarket business and a business that supplies items to monks. Once the investigation process has been completed, the verdict would later be announced to the public, he said.
According to OTCC’s report, complaints about unfair trade competition have risen on a yearly basis since the Trade Competition Commission was established as an independent agency on Oct 5, 2017.
The office has received 99 complaints about unfair trade competition. Of the total, two were filed in 2017, 11 in 2018, 20 in 2019, 30 in 2020, and 36 in 2021.
Based on the business category, commerce has attracted the most complaints totalling 38 cases, mainly regarding retail, franchises and e-commerce platforms.
Based on the type of offence, complaints about unfair business practices stood at 66, alleged abuse by a dominant market power stood at 13, while allegations of business collusion to create a monopoly, reduction of competition or the restriction of competition received six complaints.
Source: https://www.bangkokpost.com/business/2553844/platforms-warned-against-collusive-pricing