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New Regulation for Digital Platform Services in Thailand:

The Royal Decree on Digital Platforms

April 30, 2023

On 23 December 2022, the Thai government introduced a comprehensive regulation for the operation of online platform businesses in Thailand with the Royal Decree on the Operation of Digital Platform Services Subjected to Prior Notification. This Decree will become effective 240 days after publication in the Royal Gazette. Both foreign and domestic providers of online platform services, who provides services to users residing in Thailand, will be required to comply with the decree by notifying their operations and adhering to legal and operational requirements. Failure to comply with this regulation will result in severe consequences.

The Royal Decree on Digital Platforms has been established to create a comprehensive and updated regulatory framework for the digital platform industry in Thailand. The focus is on promoting fairness and transparency in business practices. This decree regulates the relationship between digital platform providers and their users, establishing rules and obligations for digital platforms. These obligations include the requirement to be transparent in providing information about their services and to ensure that their terms and conditions are just and non-discriminatory.

Digital Law
Abstract

On December 23, 2022, the Thai government introduced a Royal Decree on the Operation of Digital Platform Services Subjected to Prior Notification, which will become effective 240 days after publication in the Royal Gazette. The decree aims to establish a comprehensive regulatory framework for the digital platform industry in Thailand, promoting fairness and transparency in business practices. The scope of the regulation is broad, covering providers of digital platform services, even if they have their business establishment outside of Thailand, but still offer their services to Thai residents. Digital platform services are defined as electronic intermediaries that manage data and connect traders, consumers, or service recipients through computer networks to facilitate electronic transactions, regardless of whether a service fee is charged. Providers of digital platform services that fall under the notification requirement are those with annual revenue exceeding THB 50 million or an average monthly active user count of more than 5,000 people. The consequences of failing to adhere to the provisions of the Royal Decree on Digital Platforms can result in both criminal and administrative penalties.

What are "Digital Platform Services"?

The definition of "Digital Platform Services" in the decree refers to electronic intermediaries that manage data and connect traders, consumers, or service recipients through computer networks to facilitate electronic transactions, regardless of whether a service fee is charged. The platforms covered under this decree are not explicitly stated, but it is expected that e-marketplaces like Shopee and Lazada, as well as application stores, will be considered "Digital Platform Services." However, this definition clearly excludes digital platforms that used for the offering of goods or services of a sole platform provider itself or its affiliated companies which are agents of such platform provider. This indicates that so-called brand.com, a brand owner who sells its own products or services, is not regarded as a digital platform service for purposes of this decree.

The Extraterritorial Scope

The Royal Decree on Digital Platform has a broad scope, covering providers of digital platform services even if they have their business establishment outside of Thailand but still offer their services to Thai residents. Such foreign providers must notify their operations to the Electronic Transaction Development Agency (ETDA), the relevant regulatory authority. The decree specifies several situations in which a foreign platform is considered to be providing services in Thailand, such as when information is displayed in Thai language, the domain name includes ".th" or references to Thailand, payment can be made in Thai Baht, the applicable law is Thai, the place of dispute resolution is a Thai court, advertising fees are paid to search engines to target Thai users, or when there is business operation or support personnel in Thailand.

Digital Platform under the Law

The providers of digital platform services that fall under the notification requirement of the Royal Decree on Digital Platforms are those with annual revenue exceeding THB 50 million (approximately USD 150,000) or an average monthly active user count of more than 5,000 people. The decree categorizes providers into different types, including those who do not charge service fees, those who do charge fees, large providers, and those whose operations may impact the economy or security of the country. These categories come with varying obligations and responsibilities under the decree.

Duty of Digital Platform Providers

The primary obligation of providers of Digital Platform Services is to notify ETDA about their business operations. The Royal Decree on Digital Platforms imposes new regulations aimed at increasing transparency and accountability regarding the use of algorithmic processes, advertising practices, and moderation of illegal content. Providers are required to establish complaint-handling, compensation and redress mechanisms, and submit an annual report detailing their terms and conditions to the relevant regulator.

It is noteworthy that large digital platform service providers, with annual revenue exceeding THB 300 million (approximately USD 9 million), are subject to several obligations. These include setting up a risk assessment mechanism, appointing a compliance officer and an independent auditor, and submitting an annual risk report. They must also allow the regulatory authority access to data related to their operations.

Liability of Digital Platform Providers

The consequences of failing to adhere to the provisions of the Royal Decree on Digital Platforms can result in both criminal and administrative penalties. Service providers who are required to notify their operations but fail to do so face criminal liability of imprisonment for a year or a fine of THB 100,000. Additionally, providers who are found to be in violation of the Decree's requirements may face fines of up to THB 1 million and be ordered to cease their operations in Thailand. The Electronic Transaction Development Agency (ETDA), the competent regulatory authority, also has the power to publicly announce the names of non-compliant providers, which can harm their reputation.

In conclusion, the Royal Decree on Digital Platforms is a significant regulatory development in Thailand's digital landscape. It aims to establish a comprehensive framework for digital platform providers and increase transparency and accountability in their operations. The regulation applies to both foreign and domestic providers of digital platform services that offer their services to Thai residents, and non-compliance with the requirements can result in criminal and administrative penalties. Providers that meet the criteria of annual revenue exceeding THB 50 million or an average monthly user count exceeding 5,000 must notify their operations to the Electronic Transaction Development Agency (ETDA) before November 17, 2023. It remains to be seen how this regulation will affect the industry and the wider digital economy in Thailand.

For more information about the digital platform law, please visit

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