Thailand Contemplates EU-Inspired Regulatory Shift

Thailand Contemplates EU-Inspired Regulatory Shift

Importing EU-inspired competition regulation into Thailand – right direction for Thai competition regulation?

With the growth of the platform economy in Thailand, the cabinet has approved the 10 principles on platform economy law which provide a basis for the much-anticipated Platform Economy Act (PEA), a draft of which is underway with a preliminary draft having been distributed for comments from a closed group of stakeholders. The PEA is intended to replace the Royal Decree on digital platforms, passed in 2022, which merely impose notification obligations on platforms. Interestingly, the PEA draws from both the EU's Digital Services Act (DSA) and Digital Markets Act (DMA), combining regulations on illegal content and transparency with regulations that aim to regulate the market powers of the so-called 'gatekeepers' in one Act.

The PEA contains competition chapter for which, the Electronic Transactions Development Agency (ETDA) — the prime regulator of platforms — and the Trade Competition Commission of Thailand (TCCT) — the prime regulator of competition — are made co-regulators. This co-regulating approach, while novel, brings into the question policymakers' intent: whether co-regulating is introduced to supplement the perceived supervisory gap of the prime regulator. Since its inception in 2017, the TCCT has made the digital sector one of its focus areas and has appointed working groups to study this market. The TCCT even issued a subordinate regulation on food delivery platform in 2020 to tackle issues arising in relation to these platforms during COVID-19. The efficiency of enforcement under this co-regulating approach is another question as TCCT is envisaged to work with ETDA to enforce this competition chapter of the PEA.

Also uncertain is the relationship between the PEA and the Thailand Trade Competition Act (TCA) as the application of the latter is excluded where sector-specific law already regulates competition matters in that sector. Because the competition chapter of the PEA regulates 'gatekeepers', this begs the question as to whether gatekeepers would be excluded from the purview of the TCA altogether.

Further, the appropriateness of the introduction of ex-ante regulation, a stark difference to the ex-post approach which is adopted under the TCA, is potentially another area of debate. The long-standing ex-post approach considers harm to competition that has taken place while the ex-ante approach relies on foresight on harm that may occur, penalising businesses that take those actions without considering whether harm to competition actually occurs. The use of an ex-post approach to deal with competition issues have proven TCCT's issuance of a subordinate regulation on the food delivery platform sector in 2020 demonstrates that the use of an ex-post approach to supervise the market where there is evidence of potential harm to competition can be effective. 

As the enforcement of the DMA remains controversial and its (intended and unintended) consequences remain to be seen, for a country like Thailand where e-commerce is expected to grow by 25% in the next 3 years, one may wonder whether this regulation will have an impact on Thailand Digital Economy growth and innovation and whether Thailand should adopt this DMA approach right away or wait and see the effects of DMA as well as consider using existing tools under the TCA to tackle emerging competition issues.

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