Currently, numerous digital platform service providers are functioning as online intermediaries, covering various types and forms of businesses. As a result, they have become increasingly crucial to Thailand's economy and society. Therefore, the Thai government is acting to regulate and oversee these service business activities as an overall policy to ensure financial and commercial stability, enhance trust, safety, and consumer protection, and prevent any potential online harm to the public.
A Royal Decree (Decree), promulgated in Thailand on 22nd December 2022 under the Electronic Transaction Act B.E. 2544 (2001) (ETA) and will become fully effective 240 days after the promulgation date, which will be on 30th August 2023.
The Decree imposes some demanding requirements on operators, and its regulatory intent is the collection of tax and consumer protection.
The definition of "digital platform service" under the Decree is "the provision of a digital service platform as a medium where operators on the platform and consumers are connected through a computer network to facilitate electronic transactions." The definition is broad, so most digital platforms providing services in the Thai market are deemed to fall under the Decree.
The Decree prescribes that any digital platform that provides:
- Service in Thailand.
- Has an annual income of more than THB1.8 million (~USD53,000) by a natural person operator.
- Or THB50 million (~USD1.5 million) by a juristic person operator.
- Or any platform that provides to more than 5,000 users per month must submit annual information about the operator, the digital platform, its users, any complaints from users, and a local coordinator (if the digital platform operates overseas) to the Electronic Transactions Development Agency (ETDA)."
Moreover, the Decree also prescribes the characteristics of a digital platform that provides services in Thailand, such as displaying the platform in the Thai language, either entirely and partially, specifying the payment method, or providing the option to pay in Thai Baht, establishing an office, a department, or personnel to provide support or assistance to users within Thailand, etc.
Regarding overseas digital platform operators, a coordinator in Thailand must be assigned in writing and not a foreign business operator under the Foreign Business Act. Nonetheless, an overseas digital platform operator is not required and is optional to establish an entity in Thailand. Nevertheless, the coordinator will have considerable responsibilities. For example, a coordinator must coordinate with the relevant government authority on filings, submissions, and points of contact.
The digital platform must inform the terms and conditions of use and provide mitigation and compensation measures to compensate those damaged through the digital platform operation and the complaint channel.
The Decree prescribes that a large-scale digital platform service, or a digital platform service with unique characteristics, will bear greater responsibility, including risk assessment and implementing risk management measures, maintaining system security, managing data leaks, cyber-security breaches, appointing officials to oversee compliance with the law, and undergoing external audits.
The following will determine a large-scale digital platform service or a digital platform service with unique characteristics:
(1) Generated income of over THB300 billion per year for each type of service or over THB1 trillion per year for all classes combined or a user base exceeding 10% of the total population.
(2) The risks to financial and commercial stability, the reliability and acceptance of electronic data systems, or the potential harm that may occur to the public and have a high-level impact that could result from the platform's operation.
(3) The impact on the stability of the state, public health, environment, energy, communication and telecommunications, transportation and logistics, and public utilities.
If the annual information provided (as described above) needs to be corrected or completed, or if a digital platform operator needs to be compliant, an ETDA officer will suspend the digital platform services until the information is updated, finished, or compliant is achieved. For example, action should be taken within 90 days. In that case, an ETDA officer will cancel the submission and inform the operator promptly by letter.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
