Question & AnswerQ&A (Republic Act No. 11967)
The short title of Republic Act No. 11967 is the "Internet Transactions Act of 2023."
The State's policy is to promote and maintain a robust electronic commerce (e-commerce) environment in the country by building trust between online merchants and online consumers, ensuring effective regulation to protect consumer rights and data privacy, encourage innovation, promote competition, secure internet transactions, uphold intellectual property rights, and ensure product standards and environmental sustainability.
It applies to all business-to-business and business-to-consumer internet transactions within the mandate of the Department of Trade and Industry (DTI), where one party is in the Philippines or where the digital platform, e-retailer, or online merchant avails of the Philippine market and has minimum contacts therein. However, online media content and consumer-to-consumer (C2C) transactions are excluded.
An online consumer is a natural or juridical person who purchases, leases, receives, or subscribes to goods or services over the internet for a fee.
A person engaging in e-commerce who avails of the Philippine market by establishing minimum contacts therein shall be subject to Philippine laws and cannot evade legal liability despite lacking legal presence in the country.
The E-Commerce Bureau, created under the DTI, is tasked with formulating policies for e-commerce development, monitoring compliance, enforcing registrations, investigating violations, coordinating complaints, and promoting consumer education and other functions to foster a dynamic e-commerce environment.
The DTI Secretary can issue summons, subpoena ad testificandum, and subpoena duces tecum to alleged violators or witnesses to compel attendance and production of documents in investigations or proceedings before the Bureau. Failure to comply may result in contempt cases under the Rules of Court.
E-marketplaces must ensure transactions are identifiable as e-commerce, require registration information from online merchants, maintain lists of merchants, protect data privacy, prohibit sale of regulated goods without permits, provide consumer redress mechanisms, and require clear product information. They must exercise ordinary diligence in these duties.
Online consumers have the right to repair, replacement, refund, or other remedies under the Consumer Act of the Philippines or relevant laws. Refunds require return of goods at no cost to the consumer within a reasonable period unless otherwise agreed.
E-retailers or online merchants have primary liability for indemnifying online consumers for issues arising from transactions. E-marketplaces or digital platforms may have subsidiary or solidary liability under certain conditions, such as failure to exercise ordinary diligence or to remove prohibited listings upon notice.
Penalties include fines ranging from P20,000 to P1,000,000 depending on the number of offenses. Additional penalties apply for refusal to comply with takedown orders, violations of cancellation rules, or failure to observe obligations under specified sections. These penalties are in addition to civil or criminal liabilities under other laws.
The OBD is a database established by the Bureau within one year of the Act's effectivity to list digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce in the Philippines to provide government and consumers access to their contact information.
Online merchants must clearly indicate the name and brand of goods or services, price, description, condition, and contact information if offered on platforms that do not retain oversight over the consummation of the transaction.
The Internet Transactions Act Congressional Oversight Committee (ITA-COC) is established to monitor and ensure proper implementation of the Act, composed of key members from the Senate and House Committees relevant to trade, technology, and finance. It exists for five years from the Act's effectivity.
There is an eighteen (18) month transitory period from the Act's effectivity for online merchants, e-retailers, e-marketplaces, and digital platforms to comply with its requirements.
Online consumers shall not cancel confirmed orders after payment or when goods are perishable and already in transit unless they use electronic payment with authorized crediting despite cancellation, reimburse delivery services, the transaction allows cancellation for a fee, or parties agree otherwise.
E-retailers must publish their corporate and trade names, physical address, contact details (phone and email), and, for regulated professions, membership details in professional bodies, and submit valid identification documents to the Bureau.
All digital platforms, e-marketplaces, e-retailers, and online merchants must protect data privacy at all times following Republic Act No. 10173 (Data Privacy Act of 2012) and comply with minimum information security standards set by the Bureau and National Privacy Commission.