New Draft Notification Imposes Additional Obligations on Specific Digital Platform Operators (Thailand)

Author: Salin Kongpakpaisarn, Pundaree Tanapathong (Co-author)

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Publisher: Nagashima Ohno & Tsunematsu

Journal / Book: NO&T Asia Legal Review No.92 (December, 2024)

Notes: Related Newsletter
Thailand’s Royal Decree on Digital Platform Services – Update from the Draft to the Recently Enacted Law (January, 2023)

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*Please note that this newsletter is for informational purposes only and does not constitute legal advice. In addition, it is based on information as of its date of publication and does not reflect information after such date. In particular, please also note that preliminary reports in this newsletter may differ from current interpretations and practice depending on the nature of the report.

Introduction

Following our previous article (“Thailand’s Royal Decree on Digital Platform Services – Update from the Draft to the Recently Enacted Law”, NO&T Asia Legal Review No.55 (January, 2023)) discussing the implementation of the Royal Decree on Digital Platform Services B.E. 2565 (2022) (the “Royal Decree”), over 1,800 digital platform service providers have notified the Electronic Transaction Development Agency of Thailand (“ETDA”) of their business operations.

The Royal Decree imposes different obligations on platforms of different sizes and characteristics, whereby certain digital platform service operators are subject to more stringent obligations as outlined in the Royal Decree and further specified by the Electronics Transaction Committee because of, among other things, the risks they pose to financial and commercial security, reliability and credibility in data messaging systems or the public and the high level of potential impact the operation of their platforms may have. In this regard, the Electronics Transaction Committee has issued a new draft notification that outlines further obligations for certain digital marketplace platform service providers.

Key Provisions of the Draft

Under the draft Notification of the Electronics Transaction Committee re: Additional Obligations Imposed on Digital Marketplace Platform Service Providers with Specific Characteristics in accordance with Section 18(2) of the Royal Decree on Digital Platform Services B.E. 2565 (2022) B.E. …. (the “Draft”), a “Digital Marketplace Platform Service” is defined as a digital platform service which acts as an intermediary for the purchase, sale or exchange of goods which also provides services to facilitate sales, such as chat messaging systems for products inquiries, product baskets, delivery arrangements or payment systems. Digital Marketplace Platform Service providers that meet the criteria to be subsequently prescribed in a notification of ETDA issued under Section 18(2) of the Royal Decree (the “Platform Service Providers”) will be subject to the additional obligations imposed under the Draft, which may be summarized as follows:

Domestic registration: Platform Service Providers are required to register as a juristic person under Thai law.
Identity verification for registration of Merchants: Prior to authorizing the sale or advertisement of products which are regulated by the Thai Industrial Standards Institute (“TISI”) or the Food and Drug Administration (“FDA”) (the “Controlled Products”) by merchants on the Digital Marketplace Platform Service (the “Merchants”), Platform Service Providers are required to verify the identity of Merchants either by using (i) an identity proofing system with an identity assurance level of at least IAL2, or (ii) collection of certain information from the Merchant (e.g., name, address, telephone number, email, copy of identity card, bank account in Thailand, etc.).
- Once the Platform Service Providers have received the information above from the Merchants, the Platform Service Providers are required to consider whether such information is reliable, complete and current by inspecting the database of relevant governmental authorities or requesting that the Merchants submit credible information to supplement their consideration.
- Platform Service Providers shall be required to retain such information for the term of the service agreement and for 10 years thereafter.
Provision of Merchant information: Platform Service Providers are required to either (i) maintain a registry of Merchant information for periodic submission to ETDA or (ii) cooperate with the TISI, FDA or other relevant governmental authorities in providing Merchant information.
Terms and Conditions: Platform Service Providers must stipulate policies relating to the sale or advertisement of products in the digital marketplace platform, including measures in the case of non-compliance, in the terms and conditions for the use of the platform. The terms and conditions must require Merchants to:
1. Obtain the legally necessary certificates, licenses or other documents from the relevant governmental authorities prior to sale or advertisement of the Controlled Products on the platform, regardless of whether the product was manufactured in Thailand or abroad; and
2. Not sell or advertise products which are legally prohibited from being sold or advertised on digital platforms or which infringe on intellectual property rights.
- In the case of non-compliance with the requirements imposed for Merchants under the Draft, the Platform Service Providers may take certain actions including the termination or suspension of services.
Regulation of sale or advertisement of Controlled Products: Platform Service Providers must require Merchants to:
1. Submit the notification, certification, license or other documents required under applicable laws to verify that the Controlled Product meets legal standards. The Platform Service Providers must verify the legitimacy of such documents from the database of the TISI and FDA before allowing such products to be sold or advertised on the digital marketplace platform;
2. Display the prescribed details of Controlled Products on the digital marketplace platform, (e.g., product name, image, description, standard mark, registration number, information on the manufacturer or importer, etc.). Platform Service Providers must inspect whether the Merchant has displayed all required details of the Controlled Products and procure a channel for users of the digital marketplace platform to (“Users”) verify certain information against the database of the TISI and FDA; and
3. Display a sign or statement to indicate that certain products are Controlled Products while displaying such products for sale or advertisement on the digital marketplace platform.
Notice-and-takedown mechanism: Platform Service Providers are required to implement notice-and-takedown mechanisms to allow Users to notify Platform Service Providers of products which are illegal. Such mechanisms must at least include notifications of issues relating to: (i) sale or advertisement of Controlled Products, (ii) products which are prohibited from being sold on digital platforms and (iii) products which infringe intellectual property rights. Platform Service Providers are required to display the steps and measures taken to protect Users, remedy any damage, inspect, filter and report the results of inspection of User notifications to the notifying User and the relevant Merchant within 24 hours. The Platform Service Provider must allow the Merchant to appeal the notification within 3 days from the date the Merchant is notified.
Annual compliance reports: Platform Service Providers are required to report their compliance with this Draft in the form prescribed thereunder annually, together with their annual report regarding digital platform operations under the Royal Decree.

Conclusion

Since the Draft was subject to public hearings during the period from 30 October 2024 to 30 November 2024, further revisions may be made before the final draft is approved. Digital Marketplace Platform Service operators are advised to follow updates on the Draft and the notification of ETDA to be issued under Section 18(2) of the Royal Decree to review and assess whether they fall under the scope of Platform Service Providers, and to ensure they are prepared to comply with any additional obligations once the Draft is enacted.

December 20, 2024

This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.

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