BANGKOK, Thailand – Legal experts are questioning the basis and transparency of a temporary order by Thailand’s Trade Competition Commission (TCC) requiring some digital platforms to suspend planned increases in fees, saying that high platform fees alone may not be enough to establish a violation of competition law.
The TCC invoked Section 60 of the Trade Competition Act to impose the temporary protection measure. However, legal academics say the commission should clearly explain the criteria behind the order, including why the fee increases are considered potentially unlawful and why immediate intervention is necessary.
Assoc. Prof. Kanoknai Nitithamwanich, a lecturer at Thammasat University’s Faculty of Law and a specialist in competition law, said an increase in fees that is exploitative could potentially raise competition-law concerns.
The key issue, she said, is whether the TCC has explained the elements it considered and why a temporary protection measure under Section 60 was necessary. For such a measure, Kanoknai said the commission should at least explain how likely it is that the conduct could constitute a legal violation and how urgent the situation is. Without an order, she said, there would need to be a risk that the resulting damage could become serious and difficult to remedy later.
She also questioned the basis for determining that an increased fee is “excessive” and what standards are being used to decide whether the additional charge is “unfair”. If these issues are not clearly explained, Kanoknai said, questions could arise over whether the temporary protection order complies with the law.
Questions over transparency
Kanoknai also raised concerns about the transparency of the TCC’s order. She noted that the commission has not officially disclosed which platforms received the orders, what specific conduct is being investigated, or whether the measure is limited to suspending the conduct or also includes remedial requirements. She also questioned whether temporary protection orders of this nature should be disclosed to the public.
Meanwhile, Asst. Prof. Dr. Theetat Chawitchinda, a lecturer at the National Institute of Development Administration’s Faculty of Law and deputy director of the NIDA Research Institute, framed the central issue differently: does a high GP actually amount to harm to competition? Before asking whether the TCC should stop a platform from increasing its GP, he said, it is necessary to establish how charging a high GP could constitute a violation of competition law. Competition law, Theetat explained, is not simply a price-control law. Its purpose is not to determine what price a product or service should have.
A high price therefore does not automatically constitute an infringement of competition law. Conversely, a low price is not necessarily beneficial to competition, as pricing below appropriate levels in order to eliminate competitors can also raise competition concerns. The focus should therefore extend beyond the price itself to market power and how that power is used, he said.
Market power matters
This issue can be particularly complicated in digital-platform markets, where network effects, customer bases, data, payment systems, delivery networks, ratings and reviews can all contribute to an ecosystem that encourages buyers and sellers to remain on the same platform. The question is therefore whether businesses affected by a fee increase can realistically move to another platform, Theetat said.
The issue of excessive pricing can be relevant to the abuse of dominant market power. Theetat referred to the European Court of Justice’s ruling in United Brands v Commission, which considered whether a price could be excessive when there is no reasonable relationship between the price charged and the economic value of the product or service provided.
However, applying such principles to digital platforms requires consideration of a range of factors, including platform operating costs, the economic value of the services provided, investment in technology and infrastructure, and comparisons with fees charged by competing platforms.
Theetat said overseas cases should be viewed as comparative legal examples rather than rules that can simply be transferred directly to Thailand. The Thai market has its own legal and economic context, he said, making it necessary to consider how international principles should be adapted rather than assuming that an approach used in the European Union or United Kingdom should automatically apply in Thailand.
Beyond the percentage
The discussion therefore goes beyond whether a particular GP percentage is “too high”. A fee of 30%, for example, cannot by itself establish a chain of conclusions that the fee is excessive, exploitative and illegal, Theetat said.
Instead, several questions need to be examined: how much market power does the platform have? Do businesses have genuine alternatives? Does the fee reflect the economic value of the services provided? And is there a legitimate business justification for the level of the charge?
Ultimately, the legal question is not simply how many percentage points a platform can charge. It is whether a high fee reflects the value created by the platform or results from a situation in which business partners have limited alternatives because of the platform’s market power. Those questions will be central to determining whether a fee increase is merely a commercial decision or becomes an issue under competition law. (Story & Photo: Khaosod)
