ICLE Comments on Proposed Thailand Regulation of Digital Platform Businesses

Geoffrey A. Manne, Dirk Auer, Dario Oliveira Neto, & Mario A. Zúñiga August 28, 2026

Office of the Trade Competition Commission of Thailand View Original Source

• 
  Back
  to Top

I. Introduction

The International Center for Law & Economics (ICLE) welcomes the opportunity to respond to the Office of the Trade Competition Commission of Thailand’s (TCCT) public consultation on rules governing digital-platform businesses. ICLE is a nonprofit, nonpartisan global research and policy center that applies law & economics methodologies to public-policy debates. ICLE scholars have commented on digital-market legislation and enforcement guidelines in the European Union, the United Kingdom, the United States, Canada, Brazil, Japan, and Vietnam. They have also published extensively on the design and effects of ex ante digital-competition regimes.

We understand the consultation to cover three principal materials:

1. The TCCT Notification on unfair trade practices and monopolization in multisided platform businesses engaged in e-commerce, which took effect March 25, B.E. 2569 (2026) (the “Guidelines”);
2. The TCCT’s market-study report on the size of the market for online marketplace platform providers, or e-marketplaces (the “Market Study”); and
3. The TCCT’s proposal to classify large “gatekeeper” platforms by size and impose corresponding duties (the “Proposal”). The Proposal would establish ex ante regulation of digital markets.

The questionnaire asks how the Guidelines should be developed and improved. We answer in light of the consultation’s broader stated purpose of developing rules to oversee digital-platform businesses. We therefore address all three materials because the Proposal presents the central policy choice now before the TCCT.

Our comments make four points:

• The Market Study depicts a sector marked by active and changing competition, rather than entrenched market power.
• The TCCT should enforce and evaluate the months-old Guidelines before adding another layer of ex ante regulation.
• Several provisions of the Guidelines warrant targeted revisions.
• Any designation-based regime, if pursued, would require substantial safeguards.

II. The Market Study Shows Active Competition

The TCCT’s E-Marketplace Market Study presents concrete evidence of active competition. It reports that platform operators earned THB 98.08 billion, or approximately $3 billion, in B.E. 2567 (2024). Shopee accounted for 50.94% of that revenue, followed by Lazada at 28.85%, TikTok Shop at 12.30%, LINE Shopping at 6.45%, and all other operators at 1.46%. The study treats these shares as evidence of durable market power sustained by first-mover advantages and network effects, through which a platform becomes more valuable as more users join.

Evidence elsewhere in the study cuts against that interpretation. TikTok Shop entered Thailand in B.E. 2565 (2022) and captured 12.30% of platform revenue within roughly two years. Its gross merchandise value grew by more than 500% during the first eight months of B.E. 2568 (2025), and it attracted approximately 2.4 million sellers.

The regional evidence is equally significant. TikTok Shop reached second place in Indonesia with an approximately 39% market share, just behind Shopee at 40%. It also reached second place in Vietnam with roughly 24%. The study acknowledges that TikTok Shop could challenge Thailand’s leading platforms, as it has in neighboring countries. That record contradicts claims that high entry barriers have entrenched the incumbent platforms. A new entrant has already shown that those barriers are surmountable.

Concentration at a single point in time differs from entrenchment. Concentration describes current market shares. Entrenchment concerns whether rivals can challenge those positions and therefore requires evidence about entry, expansion, and switching over time. The TCCT’s data establish concentration. Where the data address entrenchment, they weigh against it.

The study also defines the relevant market to include social-commerce services with full-featured capabilities, yet calculates revenue using registered platform entities. That measure likely omits at least some informal social-commerce channels and cross-border sellers. The reported CR3 and CR4 figures, which measure the combined shares of the three and four largest firms, should therefore be treated as upper bounds. We encourage the TCCT to publish parallel market shares based on gross merchandise value and transaction volume.

The TCCT should also examine seller multihoming, which occurs when a seller uses several platforms at once. Measure 10 of the Proposal protects businesses’ right to do so and thus assumes that multihoming is feasible. When sellers can list on several platforms at low cost, revenue share overstates any single platform’s power to raise prices or reduce quality.

The study’s account of rising seller commissions deserves particular scrutiny because it bears much of the case for intervention. Commissions increased from roughly 1% in B.E. 2565 (2022) to between 5% and 8% by B.E. 2568 (2025). According to the study, platforms spent the preceding decade subsidizing buyers and sellers through below-cost fees and consumer discounts. The subsequent increase is consistent with the end of a price war and a shift away from artificially low introductory rates. It does not, by itself, establish exploitation. Current commission rates also remain a fraction of the distribution margins that sellers bear in offline retail.

Two-sided platforms serve interdependent groups, such as buyers and sellers. The allocation of prices between those groups is itself a form of competition, and charging below cost on one side can be efficient (Jean-Charles Rochet & Jean Tirole, Platform Competition in Two-Sided Markets, 1 Journal of the European Economic Association 990 (B.E. 2546 (2003))).

III. Regulate Conduct by Its Effects

The Guidelines identify several practices that may constitute unfair conduct: below-cost pricing, rate-parity clauses, resale price maintenance, default carrier settings, mandatory use of a platform’s payment channel, coerced advertising purchases, exclusive dealing, quantity discrimination among carriers, data use, and self-preferencing. Each practice can harm competition, but none is inherently anticompetitive. Several are ordinary methods of competition in multisided markets.

The TCCT should assess these practices under the standard rule of reason, which weighs competitive harms against benefits based on market evidence. None should carry a prima facie presumption of unlawfulness in e-commerce or any other market. The Proposal also should not prohibit them categorically through ex ante regulation.

A multisided platform sets a structure of prices across its user groups, rather than a single price. Output depends on how the total charge is allocated between buyers and sellers. Serving one group below cost while the other funds the difference can therefore be both routine and efficient. This principle is central to the economics of two-sided markets. The U.S. Supreme Court adopted it in Ohio v. American Express, holding that courts cannot assess conduct affecting one side of a transaction platform without considering its effects on the other.

A presumption against below-cost pricing to buyers would penalize a mechanism that builds the buyer base on which sellers depend, including the small and medium-sized enterprises (SMEs) that the Proposal seeks to protect. The Guidelines appropriately recognize recoupment, which occurs when a firm later raises prices enough to recover the losses incurred through below-cost pricing. The TCCT should require proof of recoupment for any predatory-pricing finding, rather than treating it as merely one factor among several.

Parity clauses require the same effects-based analysis. The clause’s breadth does not establish its competitive effects. A wide parity clause governs a seller’s prices across all sales channels, including the seller’s own website. Authorities most often condemn this form, yet it also addresses the most direct form of free riding. A buyer can use a platform to search, compare offers, and read reviews compiled at the platform’s expense, then complete the purchase on the seller’s website at a price that a platform charging a commission cannot match.

A narrow parity clause does not prevent this diversion because it constrains only the seller’s prices on rival platforms. A wide clause can protect investments in product discovery, matching, and consumer trust that helped produce the sale. European practice has not converged. Some European Union member states prohibit wide clauses but allow narrow clauses, while others prohibit both. Empirical research on the effects of these bans remains mixed.

Either form of parity clause can foreclose rival platforms when the platform imposing it has become unavoidable for buyers and sellers. Establishing that harm requires evidence about customer diversion, multihoming, and entry. The TCCT should decide such cases on their evidence, rather than treating a clause’s form as conclusive.

Self-preferencing, the tying of logistics and payment services, and default settings present similar questions. A platform that integrates delivery and payment services and makes them the default can reduce fraud, delivery failures, and dispute-resolution costs. These concerns are central when buyers transact with distant sellers whose goods and business practices they cannot inspect in advance.

A general requirement that a platform treat rivals’ offerings at least as favorably as its own would impose a duty that no integrated offline retailer bears. Comparable digital integration does not warrant a different rule without evidence of distinct competitive harm. The relevant economic question is whether the conduct forecloses an equally efficient rival and thereby harms consumers. Each prohibition should require proof of foreclosure and consumer harm, while allowing platforms to offer objective business justifications.

Measure 15 of the Proposal would restrict a platform’s use of nonpublic commercial data. We urge the TCCT not to adopt it. Platforms use transaction data generated in their marketplaces, including data concerning individual sellers, to identify unmet demand and develop products that serve it. This is competition on the merits. It can create a second source of supply in a product category that previously had only one.

Physical retailers have used scanner and supplier data to develop private-label goods for decades. Competition law generally treats that practice as stronger competition. A supermarket need not disregard its own sales figures before developing a store brand, and no economic basis supports treating comparable conduct by a digital platform differently. The affected seller may lose sales, but consumers gain another source of supply, often at a lower price. The new product also constitutes entry into the seller’s market.

A ban would shield incumbent sellers against entry, contrary to the Trade Competition Act’s focus on protecting competition. Any restriction should apply only when the TCCT establishes that the data use forecloses an equally efficient rival and harms consumers.

The Guidelines took effect March 25, B.E. 2569 (2026). They already address in detail much of the conduct that the Proposal would regulate ex ante, including self-preferencing, reduced visibility, tying, restrictions on multihoming, discrimination, commercial-data use, mandatory use of affiliated logistics and payment services, and unilateral changes to contractual terms without notice. The Trade Competition Act backs these rules with substantial penalties.

The Proposal would principally add a designation process and affirmative duties for large platforms. The evidence presented in the consultation does not establish the need for that regime. The TCCT should enforce the Guidelines and evaluate their results before imposing another regulatory layer.

If the TCCT nevertheless proceeds, the experience of earlier regimes should inform its expectations and design. Initial empirical assessments of the European Union’s Digital Markets Act (DMA) report measurable costs to consumers without corresponding gains in market contestability. The forced separation of Google Maps from other Google services increased European users’ search steps by more than 21% without shifting traffic to rival mapping services (Pape & Rossi, Marketing Science, forthcoming B.E. 2569 (2026)). Amazon displayed 18% fewer products in its European search results following the DMA (Peukert et al., B.E. 2568 (2025)).

Consumer surveys also report added friction without perceived improvements in prices or privacy (ECIPE, What About Us?, B.E. 2568 (2025)). Gatekeepers have delayed European product launches or released versions with fewer features, imposing an “innovation tax” on European users (Manne, Oliveira Neto & Auer, B.E. 2569 (2026)). Mario Draghi’s report attributes much of Europe’s productivity gap with the United States to weaknesses in its technology sector and the burdens imposed by regulation (Draghi, The Future of European Competitiveness, B.E. 2567 (2024)).

If the TCCT pursues a designation regime, it should include at least five safeguards:

1. Designation based on demonstrated and durable market power in a specific service. Revenue, user numbers, and transaction value measure size or commercial success. They do not, by themselves, establish market power. The Market Study’s own evidence of changing market shares shows the risk. Thresholds calibrated in B.E. 2564 (2021) would have designated Lazada while missing both TikTok Shop and TEMU.
2. Service-specific and time-limited designation. Each designation should apply for three to five years and undergo mandatory review based on subsequent market developments.
3. A consumer-welfare requirement and a genuine efficiencies defense. The TCCT should require each intervention to promote consumer welfare and preserve the Guidelines’ justification-based approach. Security, privacy, quality, and other efficiencies should qualify as legitimate justifications.
4. Proportionate measures that begin with transparency. The TCCT should use disclosure and notice requirements before prohibiting self-preferencing, requiring unbundling, or mandating data access. Any data-use rules should define their scope precisely. Platforms should remain free to use aggregated and anonymized data, subject to privacy and security safeguards. Japan’s narrowly tailored Mobile Software Competition Act offers a more targeted model than the DMA.
5. A regulatory impact assessment and clear legal authority. The TCCT should assess the Proposal’s likely costs and benefits before adoption. It should also determine whether Section 17(3) of the Trade Competition Act authorizes notifications imposing affirmative duties on designated firms or whether those duties require legislation. Built-in coordination with the Electronic Transactions Development Agency (ETDA) would reduce duplicative enforcement.

IV. Regulation Must Be Certain and Proportionate

The Proposal identifies Certainty, Transparency, and Proportionality as its organizing principles. We share those commitments. Applying them raises several concerns.

Several provisions of the Notification depend on whether conduct occurred “without reasonable justification,” yet do not identify who must establish that justification or what evidence would suffice. Firms cannot plan around a standard whose meaning becomes clear only after enforcement begins. The TCCT should not place the entire burden of proving a legitimate business justification on defendants. It should also establish safe harbors that identify conduct the TCCT will not pursue.

The compliance costs contemplated in Chapters 2, 4, and 6 are largely fixed. They would therefore burden smaller platforms and new entrants most heavily, even though those firms are the most likely to constrain incumbents. Regulating fees on one side of a platform also tends to shift charges to the other side instead of eliminating them. A restriction on seller fees may produce higher advertising prices or reduced discounts and services for buyers. Any assessment of Measures 4 through 6 should model these responses.

Measures 1 and 2 would use quantitative thresholds to designate large platforms as gatekeepers and impose corresponding conduct duties. This design follows the European Union’s Digital Markets Act. The DMA’s obligations reflect a market structure, institutional capacity, and enforcement history that differ from Thailand’s. Its costs and benefits also remain contested within the European Union. Adopting the same list of per se duties would accept the costs of mistaken intervention before evidence establishes the need for those duties in Thailand.

Those costs are asymmetric. A false positive occurs when a rule prohibits beneficial conduct. In a dynamic market, that error can harm consumers, deter similar conduct by other firms, and prevent products or features from being developed. The resulting losses may be difficult to detect or reverse. A false negative allows harmful conduct to continue temporarily, but entry and later enforcement can correct it.

The TCCT’s own evidence shows two entrants gaining substantial shares within four years, indicating that entry can provide such correction in this market. The likely sources of complaints also warrant attention. Rivals commonly initiate complaints under conduct rules because they have a commercial interest in constraining competitors. That interest may conflict with consumer welfare. A fairness standard that does not require proof of consumer harm would give rivals a direct means of influencing enforcement priorities.

V. Conclusion and Recommendations

The record supports targeted revisions to the newly effective Guidelines, followed by a defined period of enforcement and evaluation. It does not establish a need for an additional designation-based regime. We therefore recommend that the TCCT:

1. Retain case-by-case enforcement as the primary instrument. Defer any designation-based regime imposing ex ante conduct duties until evidence shows that entry no longer disciplines the leading platforms. Make implementation and evaluation of the existing Guidelines the principal outcome of this consultation, and publish an assessment after a defined enforcement period.
2. Require proof of likely recoupment for predatory-pricing findings. Apply price-cost tests to the platform as a whole, accounting for both the buyer and seller sides.
3. Refine the Guidelines’ pricing and self-preferencing provisions. Require evidence of an agreement before imposing liability for “parallel pricing.” Remove the excessive-pricing benchmark based on a firm’s own past rates. Eliminate the prohibitions based on prices below average total cost while retaining the predation standard. Recast the self-preferencing provisions to require deception or demonstrated exclusionary effects.
4. Assess parity clauses according to their effects. Do not infer unlawfulness from a clause’s width. Wide clauses address the diversion of platform-generated sales to a seller’s own channel, which narrow clauses cannot prevent. Any challenge should require evidence that the clause forecloses rival platforms under the circumstances of the case.
5. Require proof of foreclosure and consumer harm. Apply this requirement to prohibitions on self-preferencing, tying, default settings, and exclusive dealing. Platforms should have a defense based on objective business justification.
6. Do not adopt Measure 15. Retailers have long used their own sales data to develop and improve private-label products. A platform’s comparable use of marketplace data, including seller-specific data, can give buyers a second source of supply. Any restriction should require proof that the data use forecloses an equally efficient rival and harms consumers.
7. Publish additional measures of market share. Provide shares based on gross merchandise value and transaction volume, together with evidence on seller multihoming, before using those shares to designate a platform or trigger an obligation.
8. Clarify the burden of proof and establish safe harbors. Require the TCCT to establish the absence of a legitimate business justification. Publish safe harbors identifying conduct that the TCCT will not pursue so firms can plan under a known standard.

ICLE would be pleased to provide further analysis or the supporting economic literature upon request. Automated translation tools were used to prepare the Thai version of these comments. ICLE can provide the original English version upon request.