11 August, 2017
The Direct Sales and Direct Marketing Act (No. 3), B.E. 2560 (2017) was recently published in the Royal Gazette and it will become effective from 15 September 2017. One of the major changes to the existing Direct Sales and Direct Marketing Act B.E. 2545 (2002) ("DSA") concerns the definition of "Direct Marketing," which has been amended to exclude certain types of sales of products or services via e-commerce. In other words, certain types of e-commerce businesses, to be announced in a separate Ministerial Regulation later, will be clearly exempted from the DSA requirements like, for example, registration prior to engaging in the businesses and subsequent obligations as a direct marketing registrant.
Since the DSA became effective in 2002, the previous definition of "Direct Marketing" had made it difficult for some businesses to interpret whether they were to be regarded as a type of direct marketing businesses under the DSA, especially those operating electronically over the Internet. “Direct Marketing” was then broadly defined to refer to marketing of goods or services in such a manner as to constitute the communication of data in order to offer goods or services directly to consumers at a distance, expecting each consumer will respond and purchase goods or services from an operator. Certain groups of people have raised the question of whether the ambit of the definition of “Direct Marketing” would cover all kinds of electronic commerce businesses, as the very nature of such businesses means that a buyer and a seller are at a distance from one another.
With the goal of addressing this issue, the Direct Sales and Direct Marketing Act (No. 3), B.E. 2560 (2017) was announced in mid-May 2017 to amend, among other things, the definition of "Direct Marketing." Additional language was inserted after the existing definition which reads "[…] sale of goods or services via electronic commerce method which is not deemed as direct marketing shall be subject to rules and conditions prescribed in the Ministerial Regulations." A list of types of electronic commerce businesses to be exempted is not provided in this amendment. Such a list will be made available in a forthcoming Ministerial Regulation.
This exemption should not only serve to provide clarification amongst e-commerce business operators. As an added benefit, it should also help encourage small business operators, such as start-ups and sole proprietors, to enter the e-commerce market, which is currently a major global trend. With the exemption, such operators will be able to conduct their business without concern for certain legal barriers and compliance with the Act.
The Ministerial Regulation in question is currently under consideration by the Office of Consumer Protection Board and is expected to be issued within one year from the effective date of the Direct Sales and Direct Marketing Act (No. 3), B.E. 2560 (2017), meaning by or before 15 September 2018.
For further information, please contact:
Nont Horayangura, Partner, Baker & McKenzie
nont.horayangura@bakermckenzie.com
