Thailand’s New Digital Law: Critics Fear Stifled Innovation
Thailand is taking significant steps to regulate its burgeoning digital platform economy with the proposed Digital Platform Economy Act, currently undergoing public consultation. This ambitious legislation, drafted jointly by the Electronic Transactions Development Agency (ETDA), the Council of State, and the Trade Competition Commission of Thailand (TCCT), aims to bolster economic and social security in the digital realm. The public hearing period, which began on January 15th, concludes on February 16th.
The Act, slated to take effect 180 days after publication in the Royal Gazette, seeks to establish a comprehensive framework for digital platforms operating within Thailand. Its primary objective is to foster trust in online transactions and protect consumers, while simultaneously promoting fair competition and encouraging self-regulation among platform operators. Enforcement will be shared between the Digital Economy and Society Ministry and the Commerce Ministry, with a newly established digital platform economy committee providing policy guidance. This committee, chaired by a cabinet-appointed expert in the digital economy, will be crucial in navigating the complex and evolving landscape of online platforms.
The proposed law encompasses a broad spectrum of digital intermediaries, including those facilitating communication, data storage, and online transactions. Platforms will be categorized based on their function as mere conduit, caching, hosting, or other types of intermediaries. Crucially, platforms enabling transactions between users will be designated as «digital platform services» and face additional regulatory scrutiny.
These digital platform services will be required to designate a liaison with the ETDA and fulfill various obligations, including informing users of their rights and responsibilities and establishing efficient complaint mechanisms. Platforms must respond to complaints within 24 hours and provide investigation results within 60 days. «Significant digital platform providers,» defined by factors such as annual revenue exceeding 1 billion baht, monthly user bases exceeding 6 million, or potential societal and economic impact, will face further requirements, including disclosing detailed transaction data to the regulatory committee. This applies to both domestic and international platforms operating within Thailand.
Legal experts have noted the significant influence of the EU’s Digital Services Act (DSA) and Digital Markets Act (DMA) on the draft legislation. Pattaraphan Paiboon, a partner at Baker McKenzie, highlighted the law’s broader scope compared to existing regulations, focusing on both consumer protection and competition. The Act will replace the 2022 Royal Decree on the Operation of Digital Platform Services Businesses and serve as the primary law governing digital intermediary and platform services. Ms. Paiboon emphasized the expanded definition of digital platform services, potentially encompassing a wider range of online services, from cloud storage and web hosting to social media, online marketplaces, and news services. A key change is the removal of the exemption for platforms selling their own products or those of affiliates, bringing previously exempt businesses under the new law’s purview.
The Act also introduces regulations for «gatekeepers»—dominant platform providers with significant market influence—imposing specific obligations and potential penalties for non-compliance. These penalties, based on global revenue, can escalate into daily fines for continued violations.
Concerns have been raised regarding potential overlaps with existing laws, including the Cybersecurity Act, the Antitrust Act, and the Computer Crime Act. Paiboon Amonpinyokeat of P&P Law Firm noted the potential redundancy created by this overlap, particularly considering Thailand already has legislation addressing areas covered by the EU’s DSA.
Furthermore, some experts have expressed apprehension about the potential burdens imposed on platforms, particularly the 14 obligations for gatekeepers. Suthikorn Kingkaew of Thammasat University cautioned against overreach that could stifle innovation and platform differentiation. He specifically highlighted concerns about requirements for account and application interoperability, arguing that such measures should be implemented judiciously, only where clear evidence of anti-competitive behavior exists.
The proposed Digital Platform Economy Act represents a significant development in Thailand’s regulatory landscape, aiming to navigate the complexities of the digital age. While the law promises to enhance consumer protection and promote fair competition, concerns regarding regulatory overlap, potential overreach, and the impact on innovation warrant careful consideration during the ongoing public consultation process. The final form of the legislation will undoubtedly play a pivotal role in shaping the future of Thailand’s digital economy.
