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November 25, 2024

Thailand Seeks Comments on Principles of Draft Platform Economy Act

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Thailand has released the set of principles that will form the official draft Platform Economy Act (PEA) for a public hearing period that runs until December 15, 2024. The PEA is likely to be positioned as a general or overarching law for digital intermediary services and digital platform service businesses.

In January 2024, an early, unofficial version of the proposed law had been circulated among a limited group of operators in certain industries to get comments for the working group charged with the PEA’s development. Now, however, the proposed principles that will underpin the official draft PEA have been released publicly to gather comments, feedback, and suggestions from any interested stakeholders.

The principles of the draft PEA cover two main areas: user protection and fair competition. The key details in these two areas are outlined below.

User Protection

The main regulator supervising the law’s user protection elements will be the Electronic Transactions Development Agency (ETDA).

The draft PEA is expected to impose user protection obligations on service providers based on their nature, size, and risk level. The principles set out a three-tiered classification system for service providers that will be covered under the draft PEA, as detailed below, ordered from fewest obligations to most:

  • Intermediary Service Provider: This describes a service provider acting as an intermediary between a sender and recipient of information on a computer network, the internet, or a telecommunications network.

    Service providers likely to fall under this category include cloud service providers and web hosting providers.

    Intermediary service providers may be further categorized into the following subtypes:

    • Mere conduit service providers;
    • Caching service providers;
    • Hosting service providers; and
    • Other service providers as prescribed in ministerial regulations.

  • Online Platform: This refers to an intermediary service provider offering data storage services that connect various types of users to enable transactions or interactions between them, whether or not fees are charged. These providers may also offer additional services to facilitate the transactions or interactions.

    Service providers likely to fall under this category include social media platforms, online marketplace platforms, ride-hailing platforms, and search engines.

  • Very Large Online Platform: Online platforms that have a significant impact on the country’s economy and society are categorized as “very large online platforms.” To qualify as a very large online platform, a platform must:

    • Have annual revenue from digital platform services in Thailand exceeding THB 1 billion;
    • Have an average monthly domestic user count exceeding six million; and
    • Pose significant risks to the economy, social security, or public well-being, as determined by the Digital Platform Economy Committee based on ETDA recommendations.

    The ETDA must officially announce the list of the platforms meeting all three criteria before imposing additional obligations.

All types of service providers identified above must appoint a point of contact (POC) responsible for coordination with the ETDA, and notify the ETDA of the POC’s contact information. This requirement applies to both onshore and offshore service providers—a difference from the similar requirement under the Royal Decree on the Operation of Digital Platform Service Businesses that are Subject to Prior Notification B.E. 2565 (2022) (the “DPS Royal Decree”), which limits this obligation to offshore providers only.

The draft PEA principles also introduce a safe harbor mechanism, which exempts intermediary service providers from liability for offenses related to transmitted or stored data if they can prove “no involvement” in the offense. There are three specific safe harbor rules that apply to each type of intermediary service provider. Online platforms, as defined above, qualify as “hosting service providers” and must meet the burden of proof for hosting service providers under the safe harbor rule.

Additional Obligations for Platforms

Online platforms must also fulfill the following obligations:

  • Publication of terms and conditions (T&Cs). Under the Draft PEA, all online platforms are generally required to disclose their T&Cs, unlike under the DPS Royal Decree, which limits this obligation to certain marketplace platforms and search engines.
  • Collaboration with trusted flaggers. Online platforms must work with trusted flaggers—certified individuals who report illegal activities—by providing a dedicated channel for them to open accounts and submit reports.
  • Notice and action mechanism. Online platforms must provide a channel for complaints and reports of illegal activities on the platform.

In addition to these obligations, very large online platforms also have the following obligations:

  • Reporting of required information to the ETDA. The draft PEA requires only very large online platforms to report certain information to the ETDA. This differs from the DPS Royal Decree, under which the obligation to notify the ETDA applies to all in-scope digital platform services.
  • Preparation of an annual transparency report. Under the draft PEA, very large online platforms must prepare an annual transparency report on their digital platform services and keep it publicly accessible at all times.
  • Appointment of an independent external auditor. Very large online platforms must appoint an independent external auditor to conduct audits covering (1) IT systems and (2) compliance with legal requirements.

Extraterritoriality

The principles of the draft PEA address the proposed extraterritorial scope of the law, with the draft PEA applying to platforms meeting criteria similar to those in the DPS Royal Decree—such as offering payments in Thai baht or displaying all or part of their content in Thai. Very large online platforms located outside Thailand that meet any of the criteria will be deemed to serve users in Thailand and will have to report the prescribed information to the ETDA.

Fair Competition

In the area of fair competition, the draft PEA aims to regulate “gatekeepers” (typically market actors that have significant control or influence over access to goods, services, or markets) by outlining both the criteria for being designated as a gatekeeper and the obligations that apply to parties that have been so designated. The main regulator supervising the fair competition elements of the law is the Trade Competition Commission of Thailand (TCCT).

Designation of Gatekeepers

In deciding whether to designate a platform as a gatekeeper, the Platform Economy Committee will:

  1. Determine if the platform qualifies as a core platform service (CPS). Ten types of services are classified as CPSs, including online search engines, online social networking services, and virtual assistants.
  2. Consider whether the CPS meets all relevant gatekeeper criteria. Currently, this includes three proposed qualitative criteria—(1) having a significant impact on Thailand’s economy or society, (2) being an important gateway for business users to reach end users, and (3) having an entrenched and durable position—as well as additional quantitative criteria.

CPS providers must conduct a self-assessment if they meet the qualitative and quantitative gatekeeper criteria and must report the prescribed information to the Digital Platform Economy Committee, which will review the submitted information and announce the list of designated gatekeepers.

Gatekeeper Obligations

After being included in the list announced by the Digital Platform Economy Committee, designated gatekeepers will be subject to additional obligations under the draft PEA. The details of these obligations are still uncertain but pertain largely to two main issues:

  • Required and prohibited actions. Two sets of rules under this ex-ante approach (imposing rules that focus on preventing potential issues or risks before they occur) concern:
    • Most favored nation (MFN) clauses. Designated gatekeepers must not set prices or conditions or take actions that discriminate against or restrict users offering similar products or services to those the designated gatekeepers provide on their platforms.
    • Anti-steering provisions. Designated gatekeepers must allow users to freely communicate with or promote their products or services to consumers without additional charges, whether through the platform or through other channels provided by the service provider.
  • Modification of T&Cs. Designated gatekeepers must allow at least 15 days for user feedback before modifying T&Cs. A summary of the feedback and any amendments must be submitted to the TCCT. This obligation applies only to designated gatekeepers, which is different from the similar obligation under the DPS Royal Decree.

Status

Comments on the principles of the draft PEA will be accepted until December 15, 2024. All input gathered from stakeholders will be presented to the Council of State, which will then evaluate the principles’ appropriateness, assess potential impacts, and contribute to the development of the final draft PEA.

For more information on compliance with Thailand’s requirements for digital platform services, please contact Tilleke & Gibbins’ digital platform specialists Athistha (Nop) Chitranukroh at [email protected], Pornpan Wichawut at [email protected], Rada Lamsam at [email protected], or Karnravee Jitvilai at [email protected].

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