Thailand: Legal Experts Question Digital Platform Fee Hikes

Legal experts in Thailand are questioning the basis and transparency of a temporary order by the Trade Competition Commission (TCC) that requires some digital platforms to suspend planned fee increases. They argue that high platform fees alone may not be sufficient to establish a violation of competition law and that the commission needs to clearly explain the criteria behind its decision. Assoc. Prof. Kanoknai Nitithamwanich, a competition law specialist from Thammasat University's Faculty of Law, stated that exploitative fee hikes could indeed raise competition law concerns. However, she emphasized that the TCC must clearly articulate the factors it considered and the reasons for invoking Section 60 of the Trade Competition Act for a temporary protection measure. According to Kanoknai, such measures require the commission to explain the likelihood of the conduct constituting a legal violation and the urgency of the situation. Without such justification, she noted, there should be a risk of serious and irremediable damage. She also raised concerns about the lack of clarity regarding the standards used to determine if a fee is "excessive" or an additional charge is "unfair." If these points are not clearly explained, questions could arise about the legality of the temporary protection order itself. Asst. Prof. Dr. Theetat Chawitchinda from the National Institute of Development Administration's Faculty of Law offered a different perspective, framing the central issue as whether high platform fees actually harm competition. He explained that competition law is not merely about price control; its purpose is not to dictate prices. Therefore, a high price does not automatically equate to an infringement of competition law. Conversely, low prices can also raise concerns if used to eliminate competitors. The focus, he stressed, should extend beyond price to market power and its exercise. This issue is particularly complex in digital platform markets, where network effects and other ecosystem elements can lock in buyers and sellers. The critical question, Theetat noted, is whether businesses affected by fee increases have realistic alternatives to other platforms. He referred to the European Court of Justice's ruling in United Brands v Commission regarding excessive pricing, where the price charged was considered in relation to the economic value of the service. However, Theetat cautioned that applying such principles to digital platforms requires considering various factors, including operating costs, technological investments, and fees charged by competitors. He also stressed that international legal examples should be viewed as comparative references, not direct rules, given Thailand's unique legal and economic context. The debate extends beyond the mere percentage of a fee. Theetat argued that a 30% fee, for instance, cannot, by itself, lead to the conclusion that it is excessive, exploitative, and illegal. Instead, several questions must be examined: the platform's market power, the availability of genuine alternatives for businesses, whether the fee reflects the economic value of the services, and if there is a legitimate business justification for the charge. Ultimately, the legal question hinges on whether a high fee reflects the value created by the platform or stems from its market power, leaving business partners with limited options. These considerations will be central to determining if a fee increase is a mere commercial decision or a matter of competition law. Information Source: Pattaya Mail