TCCT to introduce new rules to curb e-commerce giants, protect small retailers

The move follows a public hearing that highlighted unfair practices, including excessive commission cuts, exclusive logistics arrangements, and cross-platform data exploitation.

Sutham Yoonaitham, TCCT vice-chairman, said that ex-post regulation—intervening only after problems occur—was no longer sufficient. Instead, ex-ante preventive measures are required to address tipping points where markets flip into monopoly or oligopoly under the control of large players. 

He warned that without clear and timely regulations, Thailand’s domestic players risk losing out to global platforms using the same business models, such as Google, Apple, Facebook, Amazon, and Microsoft . The new framework aims to ensure fair competition, protect consumer rights, and align Thailand with international standards.

The draft guideline on unfair trade practices and monopolistic behaviour in e-commerce is open for public consultation until September 18, after which it will be submitted for board approval. Sutham expects the rules to come into effect by October 2025.

Violators could face criminal penalties under the Trade Competition Act, he cautioned, stressing that the initiative represents a crucial step in bringing Thailand’s e-commerce regulations up to global standards and levelling the playing field for businesses of all sizes.

Small retailers squeezed as logistics monopolised

Pawoot Pongvitayapanu, adviser and honorary president of the Thailand E-commerce Association, warned that Thailand’s e-commerce market in 2025 is being dominated by foreign platforms—Shopee, Lazada, and TikTok Shop—led by Shopee, which has surged to number one with revenues of 85.79 billion baht and profits of over 5.42 billion baht in just one year.

While the platforms flourish, Thai small retailers are increasingly selling at a loss. They face commission fees of 15–25% but are left with margins of less than 10%, forcing many to shut down. 

Platforms that should act only as intermediaries have effectively taken control of the entire system—consumer data, logistics, advertising channels, and even financial flows, he said. Retailers, he added, have no bargaining power, not even the right to choose their delivery service.

Pawoot also highlighted the flood of untaxed, substandard Chinese products undercutting Thai producers. “A pack of Chinese tissues can sell for 9.5 baht, while Thai products cost 64 baht. Chinese sellers avoid shipping fees, rent, and advertising, yet still seize all the customers. It is destroying Thai producers, and the state has done nothing,” he said.

Delivery services are another choke point. TikTok Shop, for example, forces sellers to use only J&T Express, raising questions of profiteering. 

According to the Marketplace Thailand 2024 report, Shopee’s logistics arm SPX Express posted 23.49 billion baht in revenue and 469 million baht in net profit, while Lazada Express generated 14.32 billion baht in revenue with net profits of 1.74 billion baht.

“The logistics monopoly is no small issue,” Pawoot stressed. “Sellers are forced to use platform systems for sales, shipping, customer data, and advertising. Everything is centralised in the hands of the platforms.”

TCCT draft targets unfair fees and forced logistics

Piyaphat Thab-in, head of the Legal Management Group and acting director of the Legal Management Division at the TCCT, said the draft guideline on unfair trade practices and monopolistic behaviour in e-commerce aims to prevent market dominance and anti-competitive practices.

She noted that the sector has long been a “red ocean” requiring close regulation, citing excessive platform fees, forced use of in-house logistics services, and mandatory participation in low-price promotions—all of which have left small sellers at a severe and continuing disadvantage.

The guideline is based on Sections 54–58 of the Trade Competition Act, particularly Section 58, which provides mechanisms to regulate unfair practices by dominant players. 

These include setting product prices within the system, discriminatory treatment between retailers, algorithmic ranking that favours in-house shops, and the compulsory use of proprietary logistics services.

The draft sets out four key principles:

• Business must be conducted fairly.
• Discrimination or exclusion is prohibited.
• Business conditions must be justifiable.
• Market competition must not be diminished.

It also lists specific prohibited practices, such as: forcing shops to set minimum prices, downgrading shops that do not buy advertising, simultaneous fee hikes without coordination, and exploiting sellers’ data to benefit the platform’s own businesses.

Additionally, the guideline imposes strict rules on logistics, banning platforms from requiring sellers to use only their fulfilment or delivery services, restricting access to third-party logistics providers even when cheaper or more convenient, or charging hidden shipping fees without disclosing the true costs. 

Such practices, Piyaphat stressed, significantly undermine the freedom and competitiveness of small retailers.

Although many platforms are registered abroad, if their operations affect competition in Thailand, the TCCT can enforce these guidelines immediately, she said.

She emphasised that this marks the first serious application of Section 58 to close regulatory loopholes that allow cross-border digital platforms to dominate domestic markets without proper oversight.

Clear rules, algorithm safeguards, and seller choice in logistics

Songpol Suwanpong, assistant secretary to the Attorney General and deputy spokesman of the Office of the Attorney General, said the draft regulation provides clear rules for online platforms, particularly those linking multiple parties such as sellers, logistics providers, and other service operators.

He described it as an important mechanism to ensure transparent enforcement of competition law, reduce excessive discretionary power, and explicitly define the term algorithm, which lies at the heart of platform systems.

Algorithms, he noted, can be used to control the behaviour of both traders and consumers—for example, through search result rankings or by forcing the use of a single logistics provider—practices that are prone to abuse and risk being deemed unfair.

He further suggested refining the legal language, especially in cases where the term “and/or” appears between provisions, as it may cause confusion. 

Some may interpret it to mean that both conditions must apply for an offence to be established, whereas in fact, under the main law, meeting just one condition is sufficient, he said.

One of his key recommendations is to allow sellers the freedom to choose their own logistics providers, with at least three options available, rather than being locked into a single carrier by the platform’s system. 

He also proposed that authorities consider setting a cap on commission fees to prevent sellers from shouldering excessive costs.