On September 21, 2022, the Electronic Transactions Development Agency (ETDA) held another public hearing on the draft Royal Decree on Digital Platforms and its sub-regulations.
This updated draft Royal Decree on Digital Platforms (which is subsequent to a previous round of updates last year) is anticipated to be the final draft before it is proposed to the king for endorsement. Thereafter, it will be published in the Government Gazette and will become effective 240 days after the publication date.
The key issues under the latest draft royal decree are as follows:
Exemption for certain regulated businesses. The current draft royal decree exempts business operators that are regulated by the Bank of Thailand or the Securities and Exchange Commission, as well as digital platforms operated by government agencies for noncommercial purposes, from the application of the royal decree. Nevertheless, these business operators must ensure that their digital platform has transparency, fairness, and standards which are not less than those required under the Royal Decree.
Definition of digital platform. According to the public hearing, the definition of a digital platform has been amended to exclude digital platforms that are used to offer the goods or services of a digital platform provider or its affiliate acting on its behalf, regardless of whether the offering of such goods or services is made to a third party or the affiliate.
Appointment of a local contact. Instead of appointing a local representative with no limit of liability, the current draft royal decree only requires offshore digital platform providers to appoint a local contact to coordinate with the ETDA. The local contact must not operate any business in Thailand under the Foreign Business Act.
Notification of the ETDA. Digital platforms as defined under the royal decree must notify the ETDA of certain information—such as the name of the business operator and its digital platform, contact details of the business operator, and the type of services offered through the digital platform—prior to commencing business operations. Beyond this, two digital platform types must notify the ETDA of additional information upon meeting a certain threshold:
- Digital platform services having revenue (before subtracting expenses) from the provision of digital platform service in Thailand of more than THB 1,800,000 per annum (for individuals) or more than THB 50,000,000 per annum (for corporate entities); or
- Digital platform services having more than 5,000 users (see definition below) in Thailand in a month.
Apart from notifying the ETDA of the digital platform operations, these two types of digital platforms must also comply with other requirements for operation of a platform, as prescribed by the royal decree. Digital platforms that do not meet the thresholds specified above are not required to comply with the requirements for operation of a platform prescribed by the royal decree.
Large Digital Platform Services. This refers to digital platform services with revenue (before subtracting expenses) exceeding THB 300,000,000 per annum for each type of service or exceeding THB 1,000,000,000 per annum for all types of service, or with users in Thailand exceeding 10% of the country’s total population.
These large digital platform services are subject to additional requirements. For example, they will be required to conduct risk assessments and implement risk management measures, security measures for their systems, and crisis management measures. They also need to appoint a compliance officer, conduct external audits, and comply with other obligations to be prescribed by the ETDA.
Number of Users. Users are defined as people who use a digital platform, including business operators and consumers. User numbers under the royal decree are calculated based on the average monthly active users (AMAU), which measures the average number of unique and active users who use a digital platform within the specified period, regardless of whether the user has an account with the digital platform or has logged in to use the digital platform. If a user does not log in or sign in, digital platform providers may find other means to identify the unique user, such as IP address, cookies, or RFID.
There are also other criteria on how the number of users is to be counted. For example, bots or scrapers are excluded from the calculation, but users who visit a digital platform without making any purchase are included when calculating the AMAU. Unusual monthly active users can be excluded pursuant to certain criteria.
Notification of terms and conditions. The draft royal decree specifies the digital platform providers that are required to notify their users about the terms and conditions for using the platform, before or at the time of use:
- Digital platforms that:
- provide services to users at a distance, with compensation;
- act as an intermediary for the offering of goods or services to users, regardless of whether transactions related to the goods or services are made on the platform in whole or in part; and
- enter into an agreement with merchants that operate on the platform.
- Search engines.
Cessation of Business Operations. The draft royal decree stipulates that digital platforms must notify the ETDA prior to the anticipated date of business cessation. Certain digital platforms must also notify the ETDA of remedial plans and measures to protect users. Business ceases when a notification is issued by the competent officer.
Remedies. The digital platform provider is required to implement remedy measures to reduce damage and remedy users who incur damages from a digital platform. Examples of remedy measures include implementing a complaint procedure, offering a help desk for users, and other measures as prescribed by the ETDA.
After enactment of the draft royal decree, the ETDA will issue subordinate regulations on the requirements and obligations described above. The ETDA will also work on other subordinate regulations such as criteria for impact assessment of digital platform operations, rules and conditions for the issuance of certification marks, and specification of digital platforms not subject to notification obligations.
For further information, please contact:
Athistha (Nop) Chitranukroh, Partner, Tilleke & Gibbins