March 2023
John P. Formichella & Naytiwut Jamallsawat
Currently, numerous digital platform service providers are functioning as online intermediaries, covering various types and forms of businesses, and they have become increasingly crucial to Thailand’s economy. The Thai government is increasingly acting to regulate and oversee these service business activities as an overall policy to ensure financial and commercial stability and enhance trust, safety, and consumer protection.
A Royal Decree (Decree), promulgated in Thailand on 22 December 2022 under the Electronic Transaction Act B.E. 2544 (2001) (ETA) and will become fully effective 240 days after the promulgation date, which will be on 30 August 2023.
The definition of “digital platform service” under the Decree is “the provision of a digital service platform as a medium where operators on the platform and consumers are connected through a computer network to facilitate electronic transactions.” The definition is broad, so most digital platforms providing services in the Thai market are deemed to fall under the Decree. Note that internationally based service providers without a physical presence in Thailand must also comply with the Decree. Enforcement is a different question that we do not address herein.
The Decree prescribes that any digital platform that provides (i) a service in Thailand (from inside or outside of Thailand), (ii) has an annual income of more than THB1.8 million (~USD53,000) by a natural person operator, (iii) or THB50 million (~USD1.5 million) by a juristic person operator, (iv) or any platform that provides service to more than 5,000 users per month, must submit information (on an annual basis) about the operator, the digital platform, its users, any complaints from users, to the Electronic Transactions Development Agency (ETDA).
If the digital platform operates overseas (providing services to the Thai market), it must appoint a “local coordinator” to provide the information to the ETDA.
Moreover, the Decree also prescribes requirements for a digital platform that provides services in Thailand, such as displaying the platform in the Thai language, either entirely or partially, specifying payment methods, or providing an option to pay in Thai Baht, or personnel to provide support or assistance to users within Thailand, etc.
Regarding overseas digital platform operators, Thailand’s aforementioned “local coordinator” must be appointed in writing and may not be a foreign business operator under the Foreign Business Act. In other words, the “local coordinator” must be a Thai national. Nonetheless, an overseas digital platform operator is not required to establish an entity in Thailand but may do so at its option. The local coordinator will have considerable responsibilities. For example, a coordinator must coordinate with the ETDA on filings and act as a point of contact.
The Decree prescribes that a large-scale digital platform service, or a digital platform service with unique characteristics, will have greater responsibilities, including risk assessment and implementing risk management measures, maintaining system security, managing data leaks, cyber-security breaches, appointing officials to oversee compliance with the law, and undergoing external audits.
The following will determine a large-scale digital platform service or a digital platform service with unique characteristics:
(1) a service that generates an income of over THB300 billion per year for each type of service, or over THB1 trillion per year for all types of services combined or has a user base exceeding 10% of the total population of Thailand.
(2) Poses a risk to financial and commercial stability (as determined by Thai authorities), the reliability and acceptance of electronic data systems, or potential harm that may occur to the public and have a high-level impact that could result from the platform’s operation.
(3) Impact on the stability of the state, public health, environment, energy, communication and telecommunications, transportation and logistics, and public utilities.
Number (3) above is language commonly used in Thai lawmaking.
If a digital platform operator is non-compliant with the Decree, an ETDA officer will suspend the digital platform services until the information is compliant.
For further inquiries, please contact John Formichella or Naytiwut Jamallsawat at info@fosrlaw.com
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