Thailand – Royal Decree on Controlling the Online Service Platform Business

Thailand – Royal Decree on Controlling the Online Service Platform Business

Thailand faces the similar problems as EU due to COVID-19 pandemic where people shift from physical sale to online sale. Throughout the operation of online platform for business, both producers and customers counter several troubles such as details of the product, ambiguous service terms, limited choices of delivery, delay in delivery, damages, products are not as advertised, fraud, unable to track the orders of products, unfair prices, or the problems of complaint system and their quality to tackle the complaint sent in. On the service providers’ side, they are in need of certain standard or guideline to a clearer operation from the governmental units. Another issue is the foreign or international online service platforms that have not registered their identity in Thailand making it harder to follow up of feedback or dispute arise in which sometimes create bias or unfair treatment and protection of international service providers and Thai service providers.

As such the regulator introduces legal instrument to govern this online platform and digital service business especially such as the EU implement platform to business regulation (P2B) to attend operation of online intermediation services and business users. Leads to process of commencing a guideline to govern the online platform in Thailand, currently there is no rule or regulation issued to attend this matter but only a drafting of Royal Decree on Controlling the Online Service Platform Business that Must Be Registered B.E. …. (“Royal Decree”) as a scope of controlling to ensure security, safety, creditability in giving service to the customer which can develop a certain standard or qualification in giving fair and quality service.

Before introduction of this draft, the service provider must register under Business Registration Act B.E. 2499 (1956) as certified of legal existence where the noncompliance result is in a form of fine. Under the Direct Sale and Direct Marketing Act B.E. 2560 (2017), online sellers with sales over 1.8 million baht per year must register the business as noncompliance result is in a form of fine and imprisonment. Not only the registration compliance, but the providers must also display the products or services in an appropriate manner as stated under Rule 4 of Announcement of the Central Committee on the Price of Goods and Services No. 70 B.E. 2563 (2020). However, the mentioned existing laws cannot solve the current problems, therefore, the new draft will come up to assist these existing laws.

The draft royal decree introduces similar but new and different contents with clearer and wider range of definition and information of the business conducting on the digital platform, for instance define the term of online service platform, service providers on the online platform, users of the online platform. The draft emphasis clearer details of the types and characters of online service platform that need to notify Electronic Transactions Development Agency (ETDA) before operating the business of the details regarding the businesses and services or products display, relative data of users, complaint mechanisms, terms and conditions of services and products offer to the users, service terms and conditions, suspension or ban from using services of service providers. All these clauses introduce to endorse and support transparency and fairness.

The essence of this draft Royal Decree is to create standard of service that ensure fairness, transparency and protection to the customers. The service providers governed under this draft Royal Decree will be depending on their gross income and numbers of platform users under Section 8 and the foreign service providers for Thai user in Thailand will be under Section 9. The service providers notify the ETDA of the details and information regarding the operation of online platform business will be under Section 11. The service providers under Section 15 must notify the users of service agreement and conditions in accordance with Section 16. Where the service providers do not hold Thai nationality but give services to consumers in Thailand, there must be a Thai representative acting in compliance with this regulation to ensure no bias treatment measures implemented such as complaint channels, dispute resolutions, compensation measures, conditions of displaying, advertising, and categorising products and services.

The P2B and the draft Royal Decree set to promote fair, transparent, and predictable business environment for smaller businesses and traders on online platforms. The P2B applies to the providers of online intermediation services and search engines with certain set of rules. Providers subjected under the P2B is obliged to the conditions and qualifications set forth such as languages of terms and conditions and their informative characters, procedures in amend or change of terms and conditions of services, rights and obligations of the providers under the P2B, voluntary actions that could be done by the providers and notifying to the service providers and customers.

Both P2B and draft Royal Decree have similar purposes and directions. Both oblige the platforms to implement conditions and terms regarding suspension or band of using the services from the platforms. But the P2B provides more details and specifications by categorising providers and conditions for each provider. It also concerns the users of services and contribute provisions to notify them of their rights and obligations.