Criticism mounts over digital regulatory bill

Criticism mounts over digital regulatory bill

Opponents say law will increase burden

The royal decree on regulating digital platforms was formulated by the Electronic Transactions Development Agency as a subordinate law of the Electronic Transactions Act.
The royal decree on regulating digital platforms was formulated by the Electronic Transactions Development Agency as a subordinate law of the Electronic Transactions Act.

Criticism has flared over a draft royal decree meant to regulate digital platforms providing services in Thailand as participants at a public hearing on Thursday voiced concerns about unequal enforcement for local and foreign operators, additional burdens on operators, and the risk of abuse of power.

The royal decree on regulating digital platforms that are subject to prior notifications was formulated by the Electronic Transactions Development Agency (ETDA) as a subordinate law of the Electronic Transactions Act.

Chaichana Mitrpant, executive director of the ETDA, said the decree was drafted to address complaints from consumers and businesses who said digital platforms treated them unfairly.

Many consumers on digital platforms are troubled by inferior goods and services, fraud, unfair prices, personal data leakage as well as unfair terms and conditions, he said.

Platforms need to run businesses with standards and guidelines.

"The main problem is foreign platforms are not registered in Thailand and do not have representatives here, making it difficult to follow up with them when complaints or disputes arise," Mr Chaichana said.

The draft decree will be submitted to the ETDA's legal subcommittee for consideration next week before being forwarded to the Electronic Transactions Commission early next month, he added.

The legislation comes with an array of requirements for platforms, including notifying authorities before operating in the country.

Foreign platforms that provide services in Thailand are obliged to have their representatives in the country who take responsibility for their services. They have to report their business size to the ETDA every year as well.

A contentious issue lies in Section 16, which authorises the ETDA to announce necessary and appropriate conditions for services according to business types and risks. Platforms are also obliged to report how they comply with Section 16 to the agency.

Speaking at the hearing, a representative of the Thai Startup Trade Association, said the decree will increase the burden on local startups while it will be difficult to enforce against foreign operators.

Evidence can be seen in VAT collection as the local operators are levied but the opposite is true for foreign platforms, he said.

"This new legislation could push local startups out of Thailand," he added.

Pawoot Pongvitayapanu, an e-commerce market pundit, questioned how to enforce the decree on foreign platforms. "Are we going to block or close them down?," he asked.

The legislation also gives power to officials to enforce the rules, making it possible for corruption or abuse of power, he said. The decree creates more burden on platforms that already have to send reports to various agencies.

"It would be great if data is shared among agencies," Mr Pawoot said.

A representative of e-marketplace Shopee said in a hearing that the ETDA should act as a focal agency gathering notifications from all digital platforms and share it with other agencies.

Dhiraphol Suwanprateep, a partner of law firm Baker & McKenzie, stressed this overburdening legislation could entail a significant cost on business operators for legal compliance, which would become a barrier for new digital platforms or prompt existing operators to move out of the country.

He said platforms should be allowed to keep data themselves. When complaints arise, the ETDA can ask them to hand the data for examination instead of forcing them to report every year.

Worachat Luxkanalode, executive director of Grab Thailand, told the Bangkok Post the firm welcomes the ETDA's move to safeguard consumer interests.

"Grab hopes that the authorities will maintain an open dialogue with operators and take into consideration the highly diverse sectors and business models amongst digital platforms as well as ongoing market dynamism to ensure that Thailand's regulatory environment remains conducive to the flourishing of innovation," he said.

Suthikorn Kingkaew, a project leader at Thammasat University Research and Consultancy Institute, said the draft decree may impede Thailand's digital economy goals without tangible benefits as there are many pre-existing laws and regulations that can be used to regulate platforms for the same effects.

E-commerce giant Lazada said in a statement to Bangkok Post that the measures drawn up should ensure flexibility for all e-commerce platforms to be able to form conditions and frameworks that are compatible among themselves within the law.

"This is to encourage the growth of the e-commerce industry as well as digitalise the Thai economy," it said.

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