The bill on digital regulation, a double-edged sword

An online shopper browses products on an e-commerce platform in Thailand. (Photo: Varuth Hirunyatheb)

A draft royal decree intended to regulate digital platforms providing services in Thailand has drawn criticism among legal and technology experts that it is impractical against strict requirements.

The Agency for the Development of Electronic Transactions (ETDA) is preparing to unveil a draft royal decree regulating digital platforms which are the subject of prior notifications for public hearing tomorrow.

The decree, which is a law subordinate to the law on electronic transactions, stipulates a set of requirements of these platforms, defined as operators providing a space of connection between businesses and consumers.

Under the law, platform operators must notify authorities of their intention to do business in the country while the notification process will be announced by the Electronic Transactions Commission.

The decree also states that foreign platforms that provide services in Thailand must have their representatives in the country who take responsibility for their services.

ETDA has the authority to issue necessary and appropriate conditions for the services of a platform depending on the type of service, including service charges, feedback mechanisms, dispute resolution, access and use of data, mitigation measures for damage caused by the services, notices and opt-out mechanisms and verification of user identity.

A variety of masks offered on an e-commerce site.

LARGE LOAD

“It is still unclear what additional requirements digital platform operators will have to comply with. Strict requirements could place a significant burden on digital platform operators,” said Dhiraphol Suwanprateep, partner at Baker law firm. & McKenzie. Bangkok Post.

Most of these requirements are confidential in nature, he said.

“I hope they will be kept as such and will not be disclosed to their competitors and to independent government agencies.”

According to the draft, digital platform operators should cooperate when receiving any order under the laws or a court order to comply with this decree and other laws, he added.

“What this means for companies is that it could open the floodgates to orders from authorities asking them to comply with strict requirements. It remains to be seen how authorities will approach this obligation,” he said.

The objective of this decree is to regulate digital platforms so that they are fair and transparent as well as to improve consumer protection.

“The law should allow digital platform operators to design their relevant terms within the appropriate framework as long as it is not against the law,” said Dhiraphol.

Digital platforms outside of Thailand that provide services to consumers in Thailand are also subject to this legislation.

This involves all operators whose platform is presented in Thai, has registered a Thai domain name (.th), allows payment in Thai currency, uses Thai law as the law governing the contract governing transactions, pays a supplier search engine to allow consumers in Thailand to access the service, has an office, unit or staff in Thailand to assist users in the country, issues tax invoices to consumers in Thailand, or others, as prescribed.

“The implication of this is that the decree could potentially apply to all digital platforms around the world, even those that do not target or have no intention of marketing in Thailand but simply have a few clients residing. in the country, ”Mr. Dhiraphol said.

The violation could result in the ban on operations or the withdrawal of the trade notification, he said.

EXECUTION IN QUESTION

“The application of this extraterritorial application could also be a problem in practice,” Dhiraphol said.

“Even if the draft royal decree would oblige offshore digital platforms to establish a local representative, it would be doubtful whether the regulator could effectively remedy the non-compliance with this draft royal decree through the intermediary of a local representative, especially where criminal penalties are involved. “

Strict regulations, which imply significant costs for traders for legal and regulatory compliance, could create a barrier to entry for new digital platforms and even lead to the exit of existing ones in the country, he said.

It would also mean that users in Thailand would lose opportunities to use global platforms which can benefit them in everyday life.

“The question is whether the Thai authorities are prepared to pay the cost of imposing such stringent regulations by providing users with equally effective local alternatives. This is yet another question that must be taken into account,” did he declare.

Paiboon Amonpinyokeat, an independent legal expert, indicated that the draft decree is not likely to be adopted by the Council of State because it annulled various laws such as the Consumer Protection Law, the Law on direct sales and direct marketing, computer crime law. and Unfair Competition Law.

As the draft decree was formulated on the basis of Articles 32 and 33 of the Electronic Transactions Law, which aim to promote financial and commercial stability, the details of the draft appear to run counter to this principle by imposing a strict control.

DOUBLE EDGE SWORD

Suthikorn Kingkaew, project manager at Thammasat University’s Research and Advisory Institute, said the new decree will give the government a strong tool to monitor digital platforms as it will require registration and full compliance.

However, this control can present a double-edged sword for Thailand, he said.

“This law can be used for the benefit of Thai society by leading to better consumer protection and fairer treatment of local businesses operating on digital platforms,” ​​Suthikorn said.

“At the same time, it can allow the government to interfere with the global operations of platforms, especially social media and audiovisual services which provide Thai society with the freedom to access information.”

Pawoot Pongvitayapanu, an expert in the e-commerce market, said that even though the legislation does not apply to small platform operators with less than 1.8 million baht in annual revenue, it still affects 70-80% of operators. of the market.

This will force digital operators to notify and inform those responsible for new services, he said.

“How can we make sure that the number of officials receiving such a notification will be sufficient?” He asked.

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