The Trade Competition Commission of Thailand (TCCT) plans to strengthen regulations to address unfair competition in the digital platform industry.
The regulator recently imposed a fine of 3.48 million baht on Shopee (Thailand) for allegedly enrolling vendors in two promotions without their consent. The conditions for them to withdraw from these campaigns included extra fees.
The Shopee case marks the first time an e-marketplace platform was found to have violated the law and was ordered to pay a fine.
The commission accepts complaints about e-commerce platforms from merchants, mainly concerning fee increases and changes to contract terms. Many complaints were reviewed and found not to constitute legal violations, noted the TCCT. As of July, seven cases remain under consideration.
The regulator also exercised its authority under Section 60 of the Trade Competition Act of 2017 to order e-commerce platforms to suspend fee increases for six months and submit supporting data and reasons for fee adjustments.
The TCCT plans to examine the basis for the increases and assess whether gross profit (GP) rates and other fees are fair and appropriate.
If a platform fails to submit such information within the specified period, the regulator said it will make a decision based on the information available.
The commission has not set a percentage cap on GP rates. Instead, it plans to examine the criteria used by the platform to assess whether the fees are fair.
Regarding the Shopee ruling, on Aug 20 the TCCT unanimously found the platform had unfairly used its market domination to the detriment of merchants, violating Section 57(2) of the Trade Competition Act.
The case concerned its special free-shipping promotion and 10% “Coins Cashback” programme.
According to the ruling, Shopee automatically enrolled selected sellers in seven-day free trials of the two schemes without their consent.
Vendors who did not withdraw within the required period remained in the programmes and were liable for additional service fees ranging from 3-7%, depending on the programme and product category, on top of normal platform charges.
The commission found vendors could face unexpected costs, reduced profits or losses because they had set their prices without accounting for the additional fees.
Leaving the programmes also required sellers to follow Shopee’s procedures and deadlines.
Shopee argued the programmes benefited merchants by increasing product visibility, orders and sales. The platform said it subsidised the promotions, sent notifications during the trials and provided ways for sellers to withdraw from the schemes.
The company maintained vendors had accepted its terms of service and that the free trials allowed them to assess the benefits before paying.
The e-commerce platform is allowed to challenge the order in Administrative Court within 90 days of notification.
The Bangkok Post asked Shopee for comment, but the platform has not replied.
Warawan Chitaroon, a TCCT commissioner, told the Bangkok Post it would step up oversight of digital platforms because of their widespread impact and strong bargaining power, particularly over small and medium-sized enterprises.
“Some legal experts have questioned the TCCT’s authority to use Section 60 of the Trade Competition Act to freeze GP fee increases for six months. We maintain that the order falls within our legal authority,” she said.