Brief Notification for the Digital Platform Services

The Notification of the Electronic Transactions Commission regarding the Nature of the Digital Platform Services Requiring a Notification of the Brief List (“Notification”) was published in the Royal Gazette on 18 August 2023 by virtue of Section 8 of the Royal Decree on the Operation of Digital Platform Service Business that are Subject to Prior Notification B.E. 2565 (2022) (“Royal Decree”) and it will be enforced on 21 August 2023 onwards.

This Notification is aimed to prescribe details of the qualification of the digital platform service providers under Section 8 of the Royal Decree  which is  (1) earning a yearly gross income in Thailand of not more than 1,800,000 Baht as a natural person, or not more than50,000,000 Baht as a juristic person, and (2) Digital platform service providers with no more than 5,000 monthly average users (“Digital Platform Service Providers”) to notify information listed below (a brief list) to ETDA prior to operating their platforms:

  • Platform operator’s information, i.e., natural person’s name-surname or juristic person’s name, national identification number or juristic person registration number, address, juristic person’s accounting period, and contact channel which can be URL or application.
  • Digital Platform Service Providers’ information, i.e., name, type, and channel of the Digital Platform Service Providers.
  • Digital Platform Service Providers’ point of contact in Thailand.

In the Notification, we noticed that there are additional qualifications of the Digital Platform Service Providers specified therein which we view that those are in conflict with the principle of definition of the term “digital platform services” and Section 8 of the Royal Decree as it shall not include a digital platform service that is intended for offering goods or services of a single digital platform service operator or an affiliated company which is an agent of such operator, irrespective of whether the goods or services are offered to third persons or to affiliated companies.

Furthermore, the aforementioned Digital Platform Service Providers must notify the ETDA of the following information on an annual basis, i.e., (1) within 60 days of the end of the calendar year in the case of a natural person’s platform operator or (2) at the end of the fiscal year in the case of a juristic person platform operator:

  • Value of transactions incurred on the service platforms (if any)
  • Gross income from providing the service platform in Thailand (if any)

This Notification is only applicable to smaller size Digital Platform Service Providers. However, Digital Platform Service Providers in general are still obligated to comply with. The sanction for failure to notify the required information would be subject to the competent official issuing of an order prohibiting the Digital Platform Service Providers from providing the digital platform services.

Author: Panisa Suwanmatajarn, Managing Partner.

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Details of Terms and Conditions for the Digital Platform Service Businesses

On 21 August 2023, the Royal Decree on the Operation of Digital Platform Service Businesses that are Subject to Prior Notification B.E. 2565 (2022) (“Royal Decree”) has come into force. In this regard, Section 17 of the Royal Degree requires the digital platform service and the search engine Providers that meet certain requirements to prepare and publish the terms and conditions with minimum information as prescribed in the Royal Decree (“Terms and Conditions”). The Royal Decree itself, however, did not provide details or clarifications in regard to such minimum requirements. As such, the Electronic Transaction Development Agency (“ETDA”) has issued a Notification of ETDA number Thor.Por.Dor. 4/2566 on the Details on the Publication of Terms and Conditions of Services for Users’ Knowledge (“Notification”).

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The Notification consisted of various details important for the digital platform service providers to comply with. The key provisions can be categorized as provisions that further clarify Section 17 of the Royal Decree and provisions that assign additional obligations to the digital platform service providers. Some of the key provisions are summarized as follows:

  1. The Terms and Conditions must be in Thai, easily understandable by the platform’s users, made easy in terms of accessibility, and composed of enough details for the user to make an informed decision whether to use the platform or not. The digital platform service providers must also notify the ETDA and provide evidence showing that they have published the Terms and Conditions for the users’ knowledge.
  2. Where the digital platform service providers treat each of the products, services, or contents of the business users differently, the digital platform service providers must clearly specify the differences in the Terms and Conditions.
  3. In addition to the prescribed minimum requirement in Section 17 of the Royal Decree, the digital platform service providers that meet the requirement of Section 16 (1) of the Royal Decree must also prescribe an additional item, such as an additional distribution channel, the ownership or entitlement in intellectual property after entering into the Terms and Conditions, ancillary or complementary goods and services that is offered to the users before the transaction is concluded, conditions for suspending or terminating the provision of services, etc.
  4. The Notification further provides an example, easing the digital platform service providers to comply with Section 17 of the Royal Decree, that is, the example of algorithms required to be included in the Terms and Conditions are given, for example, price, keywords, user demographic, quality of products, quality of seller, users’ review towards the goods or services.  
  5. Where Section 17 (8) of the Royal Decree requires the digital platform service providers to include in the Terms and Conditions, “an actions to be taken to illegal goods, services, or contents”, the Royal Decree further clarifies that the digital platform service providers must specify if the processes, measures, or mechanism used by the digital platform service providers in determining if a good, service, or contents are illegal or not, are done by an algorithm decision-making, or by human review. The Notification further requires the digital platform service providers to have in place a notice-and-takedown mechanism and details thereof.
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Please be reminded that the aforementioned information is only a brief detail prescribed under the Notification. Terms and Conditions to be prepared in accordance with the Notification are said to be of complex structures and details. Digital platform service providers must pay attention to the details to avoid any incompliance with the law.

Author: Panisa Suwanmatajarn, Managing Partner.

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ETDA’s Recommendation for an Online Merchant Management System with Cash on Delivery Service

The Electronic Development Transactions Agency (ETDA) has recently proposed a draft of ICT Standards for Electronic Transactions, specifically recommending guidelines for an online merchant management system that offers cash-on-delivery (COD) services. The purpose of this recommendation is to establish consistent practices for service providers in this field, addressing emerging challenges and mitigating potential risks associated with COD transactions. Ultimately, the goal is to enhance customer confidence and trust in the process of buying and selling products through COD.

The recommendation is structured into four main sections: scope, definition, introduction of COD, and conditions for online merchant delivery management services. Key points from each section are summarized as follows:

  • Authentication of COD online merchant service providers are required to authenticate online merchants before allowing them to activate their services on the platform. This includes notifying the merchants about the authentication criteria and the information that needs to be collected, such as their names, identification numbers, and bank account numbers, to be in compliance with relevant laws.
  • Online merchant delivery information must be maintained. Such information includes tracking numbers and recipient details. Additionally, any unusual behavior exhibited by online merchant service providers must be monitored.
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  • Provisions of recipient information on parcel cover sheets
    • Information on parcel cover sheets: service providers are obligated to include clear and visible information on the parcel cover sheets. This includes the service provider’s names, contact information, websites or communication channels, and details related to recipients’ support.
    • Information for assisting recipients: service providers must provide information on how the system assists recipients. This includes details on scenarios where the system can assist, channels for reporting problems, and any evidence that recipients may need to submit for investigation.
  • Monitoring and addressing online merchant delivery behavior to prevent scams related to COD transactions: service providers must continuously monitor and track incidents involving online merchants. They should establish procedures for addressing suspicious behavior, which include the following steps:
    • Suspected scammers: if more than 10% of recipients report unexpected deliveries or parcels, they did not purchase from a specific merchant. In this case, the service providers must permanently terminate that merchant’s account.
    • Non-compliant items: if the items received by recipients do not meet the specifications as specified, service providers should notify the online merchants and request information to investigate and resolve the issue for both the merchants and the recipients.
    • Incident recording for future analysis: service providers are required to maintain records of incidents involving online merchant behaviors, which can be analyzed in the future for further insights.
    • Gathering evidence and reporting wrongdoings: if evidence related to scams or other wrongdoings is gathered, service providers should report the findings to the relevant authorities.

It is important to note that the above conditions and procedures are recommendations with no legal enforcement. They serve as guidance for service providers in the industry to establish best practices and maintain a high level of service quality and protection to the customers.

Author: Panisa Suwanmatajarn, Managing Partner.

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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.