Thailand’s Royal Decree on Digital Platform Services – Update from the Draft to the Recently Enacted Law

(1) Digital Platform Services which are subjected to the Royal Decree

Under Section 3 of the Royal Decree, digital platform services which are regulated under the Royal Decree (the “Digital Platform Services”) are defined as “the provision of an electronic medium which has a data management system to create a connection by using a computer network between business operators, consumers or users that results in an electronic transaction, whether or not any service fee is collected therefrom, except for Digital Platform Services which are used for offering goods or services of a sole Service Provider itself or by its affiliated companies acting as a representative of the said Service Provider, whether or not such goods or services are offered to third parties or affiliated companies”. The definition of Digital Platform Services under the Royal Decree focuses on digital platforms which are used as mediums to provide a connection between business operators and consumers that results in an electronic transaction, such as, social networks, marketplace websites, or search engines.

Notwithstanding the above, the Royal Decree shall not apply to the following Digital Platform Services:

• (a) Digitals Platform Services which offer goods or services of a sole Service Provider itself or by its affiliated companies acting as a representative of the said Service Provider (as mentioned above in the definition of Digital Platform Services);
• (b) Digital Platform Services which are governed under the regulations of the Bank of Thailand and the Securities and Exchange Commission (Section 4 (1));
• (c) Digital Platform Services provided by government agencies that are not directly related to commercial business or are not primarily focused on making a profit, provided that such platforms have already been notified to the ETDA (Section 4 (2)); and
• (d) Other Digital Platform Services which may be exempted by ETDA’s announcement (Section 8 paragraph 3).

It is noteworthy that a marketplace website, which acts as a medium between sellers of products and consumers, does not fall within the exemption in (a) above, and thus, the operation of a marketplace website shall require notification under the Royal Decree. This notification requirement under the Royal Decree is in addition to the notification to the Office of the Consumer Protection Board under the Direct Sale and Direct Marketing Act B.E. 2545 (2002) which is the law that currently governs the operations of e-commerce business in Thailand.

(2) Notification requirement and other duties under the Royal Decree

Under the Royal Decree, the Service Providers of the Digital Platform Services shall have the duty to notify ETDA before starting business operations as well as comply with other duties stipulated therein. The stringency of such duties can be classified into four (4) categories depending on the scale and characteristics of the concerned Digital Platform Services as follows:

In addition to the above, the Service Providers in category (a), (b) and (c), shall have the duty to implement remedy measures and compensate affected persons from providing digital platform services business. In case of cessation of business operations, they shall have the duty to notify ETDA as well as their users in advance, within the timeframe specified in the Royal Decree depending on the types of Digital Platform Services provided.

(3) Digital Platform Services provided outside Thailand

Under Section 9 of the Royal Decree, Service Providers of Digital Platform Services who are located offshore, but provide their services to users in Thailand (the “Offshore Service Providers”) shall also have the duty to notify ETDA of their business operations. In this regard, the Offshore Service Providers will be deemed as providing services to users in Thailand if they have any one of the characteristics as prescribed under Section 10 of Royal Decree, such as, the display of their services whether in part or in whole is in Thai language, the domain name of websites contain indication of Thailand such as “.th”, Thai law is used as the governing law of the transactions concluded on the platforms, or the Offshore Service Providers have offices or staff to support users in Thailand.

In addition to the notification requirement, Offshore Service Providers are also required to appoint a coordinator in Thailand for their business operations under Section 11 of Royal Decree. The coordinator shall act as a contact person of the Service Providers in Thailand with ETDA and shall perform relevant duties, such as, filing annual reports or notifying any change to the terms and conditions of the Digital Platform Services to ETDA. The coordinator of the Offshore Service Providers must be appointed in writing, reside in Thailand and shall not perform any activity that is subject to the Foreign Business Act B.E. 2542 (1999).

Section 11 Paragraph 2 of the Royal Decree clarifies that the duty to appoint the coordinator in Thailand shall not be deemed as the requirement to establish the entity of the Offshore Service Providers in Thailand. Moreover, contrary to the Draft Royal Decree, Section 11 of the Royal Decree no longer stipulates that the coordinator shall act as a representative to the Offshore Service Providers which shall assume any liability relating to the provision of Digital Platform Services.

(4) Penalty

Any Service Provider of Digital Platform Services who fails to comply with the notification requirement under the Royal Decree or violates any provision therein may be subjected to the order issued by ETDA under Section 13 paragraph 3 of the Royal Decree suspending the provision of its service in Thailand until the violation under the Royal Decree is rectified. In addition, such Service Provider can also be subject to imprisonment for a term not exceeding one (1) year or to a fine not exceeding 100,000 THB, or to both, under the Electronic Transactions Act B.E. 2544 (2001).

Next step

Service Providers who are currently operating their Digital Platform Services before the enforcement of the Royal Decree are allowed to continue their business operations, provided that they notify ETDA within 90 days after the Royal Decree becomes effective on 20 August 2023. Until then, it can be expected that ETDA may issue relevant sub-regulations as well as guidelines to clarify issues under the Royal Decree, especially the characteristics of platforms which fall under the definition of the regulated Digital Platforms Services.