Thailand’s Attempt at Regulating Digital Platforms
Digital platforms are currently playing important roles in bringing convenience to people in Thailand, especially, playing roles as online marketplaces, food delivery service providers and ride-hailing service providers. Thailand’s authoritative body, whose main responsibilities are to oversee and regulate online transactions, the Electronic Transactions Development Agency of Thailand (“ETDA”) under the supervision of the Ministry of Digital Economy and Society, views it necessary to regulate digital platforms to maintain financial and commercial stability and ensure the creditability of online transactions.
In late 2021, ETDA proposed to the Cabinet the Draft Royal Decree on the Supervision of Digital Platform Services Subjected to Prior Notification (the “Draft Royal Decree”). Later, on 25 October 2021, the Cabinet approved the Draft Royal Decree in principle. The Draft Royal Decree was then passed to the Council of State of Thailand. At the stage of being reviewed and considered by the Council of State, the Draft Royal Decree was arranged for the first and second public hearings in January and March 2022, respectively. Currently, the Draft Royal Decree is still under review and consideration by the Council of State.
At the second public hearing, the Draft Royal Decree proposed the definition of “digital platform service” as the provision of electronic intermediation service that handles information with the purpose to create connection, by using computer networks, between business users, consumers, or other users to create electronic transactions with or without any renumeration.
The Draft Royal Decree sets out regulations on digital platform industry by requiring digital platform service providers to notify ETDA of the required information (“Required Information”). Some significant changes would be brought to digital platform industry as the Draft Royal Decree would also impose compliance obligations on digital platform service providers unless exempted.
We have summarised the major requirements and compliance obligation under the Draft Royal Decree below.
Notification of the Required Information to ETDA prior to commencing business
Based on the Draft Royal Decree, any digital platform provider having one of the following characteristics would be required to notify ETDA of the Required Information (further explained below) prior to the commencement of its business:
- a digital platform operated by an individual that generates, from Thailand, gross revenue of more than THB 1.8 million annually;
- a digital platform operated by a legal entity that generates, from Thailand, gross revenue of more than THB 50 million annually; or
- a digital platform that has, in Thailand, more than 5,000 monthly users on average.
The Draft Royal Decree also requires any cross-border digital platform service provider to notify the Required Information to ETDA and appoint its point of contact in Thailand in writing, if, amongst other criteria:
- some or whole parts of their digital platforms are displayed or shown in Thai language;
- their domain names are registered under “.th” or “.thai” or any other name that would mean Thailand or they use Thai language domain name; or
- their digital platforms require payment to be made in Thai Baht currency or enable payment to be made in Thai Baht currency as an option.
The Required Information needed to be notified to ETDA
The Draft Royal Decree requires digital platform service providers, whether it is located in Thailand or outside Thailand, to notify the following information to ETDA:
- information related to the digital platform service providers, i.e. official name, address, fiscal year, contact information;
- information related to the digital platform service, i.e. name of digital platform service, the value of transactions made on the digital platform, gross income generated in Thailand;
- information related to digital platform service users, i.e. number of users;
- information related to complaints, i.e. number of complaints; and/or
- information related to the point of contact in Thailand.
The digital platform service providers not having the characteristics mentioned in (a), (b) or (c) above may only be required to notify the brief information of the Required Information (1), (2), and/or (5) above.
The Draft Royal Decree requires digital platform service providers to comply with the obligations in relation to their operation. However, these obligations do not apply to digital platform service providers not having the characteristics mentioned in (a), (b) or (c) above.
Compliance obligation imposed under the Draft Royal Decree include:
- Annual information update: Digital platforms providers both located in Thailand and outside Thailand are required to submit an annual report to ETDA within 60 days from the ending of fiscal year. The annual report shall include the information required under the Draft Royal Decree including registration number, address, fiscal year, value of transactions on digital platforms, gross revenue generated in Thailand on their digital platforms, etc.
- Relief measures and indemnification or remedy for damage: Digital platform service providers are required to put in place relief measures and indemnification or remedy for damage such as a complaint management process and user support channels.
- Terms and conditions of services: Some specific types of digital platform service providers, such as the digital platform service providers as intermediary for the offering of goods or services to consumers, are required to inform users of terms and conditions of services before or at the time of the provision of their services.
The Draft Royal Decree would not apply to the following cases:
- digital platforms under the laws regulated by the Bank of Thailand;
- digital platforms under the laws regulated by the Office of Securities and Exchange Commission; or
- digital platforms operated by non-commercial or non-profit government agencies which has been notified to ETDA.
If you have any questions or require any additional information, please contact Threenuch Bunruangthaworn, Archaree Suppakrucha or Wichittra Pholphrueksa of ZICO Law Thailand or the partner you usually deal with.
This alert is for general information only and is not a substitute for legal advice.