QuestionsQuestions (PRC Resolution NO. 2008-462, S. OF 2008)
The short title is the “Internet Transactions Act of 2023.” The policy is to promote a robust e-commerce environment by building trust between online merchants and consumers, and to ensure effective regulation protecting consumer rights, data privacy, innovation, competition, secure transactions, IP rights, product safety, and environmental sustainability.
It applies to all B2B and B2C internet transactions under DTI’s mandate where one party is in the Philippines or where the platform/merchant avails of the Philippine market with minimum contacts. Excluded: online media content and C2C transactions (between end-users for personal/family/household purposes not in ordinary course of business).
RA 11967 subjects persons engaging in e-commerce to Philippine laws when they “avail of the Philippine market” to the extent of establishing “minimum contacts,” preventing evasion of liability despite lack of legal presence in the Philippines.
Online consumer: buys/leases/receives/subscribes to goods or services over the internet for a fee. Online merchant: sells non-financial goods/services to online consumers through an e-marketplace or third-party digital platform (and an e-retailer is also an online merchant when selling outside its own site via third-party platforms). E-retailer: sells directly to consumers through its own website/webpage/application. E-marketplace: connects consumers with merchants, facilitates shipment/logistics/post-purchase support, and retains oversight over transaction consummation.
The Bureau is created within six months from effectivity under the DTI. It is headed by a Director with at least one Assistant Director with competencies in e-commerce and related laws/processes. It formulates and implements e-commerce policies, ensures compliance, handles and tracks complaints, develops consumer education, coordinates with agencies, investigates violations, and monitors implementation.
Within one year from effectivity, the Bureau must establish a database of digital platforms, e-marketplaces, e-retailers, and online merchants in the Philippines, providing government and online consumers access to contact information. It must leverage existing databases and be governed by regulations consistent with data minimization and RA 11032 principles.
DTI Secretary may issue summons, subpoena ad testificandum, and subpoena duces tecum in investigations/ proceedings before the Bureau; noncompliance may lead to a contempt case under the Rules of Court. He/She may also issue compliance orders requiring conformity with RA 11967, RA 7394, and other DTI-issued consumer/trade protection issuances.
After investigation/verification, the DTI Secretary may issue an ex parte takedown order directing removal of a listing/offer when: (a) goods/services are prohibited/regulated (e.g., endangered animals, illicit drugs, fireworks/explosives, counterfeit goods) and prohibited nature is apparent from photo/description; (b) goods/services are subject of a cease-and-desist order by a competent agency; (c) items were previously subject of takedown but reposted and proliferated; or (d) other transactions within DTI jurisdiction threaten public/personal safety or compromise financial/personal information.
The entity must be given an opportunity to be heard within 48 hours from issuance of a takedown order. The order remains effective for a maximum of 30 days unless extended or made permanent by a judicial order/decision. Copies are served not only to the e-retailer/online merchant but also the e-marketplace/digital platform and entities whose cooperation may be needed (e.g., registered ISP, payment gateways, and relevant agencies).
The DTI Secretary may establish a publicly accessible blacklist of platforms/accounts/websites that fail to comply with compliance orders or are subject to takedown/cease and desist orders, indicating the specific violation. It must be publicly available and furnished to digital platforms and financial regulators. Entries are removed promptly after compliance/correction, motu proprio, or upon request, without necessity of a hearing.
Within six months from effectivity, DTI must develop an ODR platform (alternative dispute resolution) to facilitate disputes among online consumers, merchants, e-retailers, e-marketplaces, and other digital platforms. DTI must issue IRR on ODR procedure and development/management/operations.
E-marketplaces must ensure transactions are identifiable as e-commerce, identify the persons on whose behalf the transaction is made, and clearly show promotional offers and conditions. They must require, prior to listing, submission of merchant identification documents/registration details, geographic address, and contact details (mobile/landline and email), plus professional membership details if regulated professions apply. Non-sensitive items must be published/posted or linked to the OBD.
They must take necessary precautions to protect consumer data privacy at all times, comply with minimum information security standards of the Bureau/NPC and relevant issuances, and are covered by RA 10173 (Data Privacy Act of 2012) and NPC issuances.
An aggrieved party must first avail of the internal redress mechanism of the platform/e-marketplace/e-retailer before filing a complaint in court or with a government agency or resorting to ADR. It is deemed exhausted if unresolved after seven calendar days from filing the complaint.
E-retailers/online merchants are primarily liable for indemnifying consumers in civil actions or administrative complaints. E-marketplaces/digital platforms are subsidiary liable if they failed ordinary diligence in compliance duties, failed after notice to remove infringing/listed goods subject to takedown, or failed to provide merchant contact details when merchant has no legal presence. E-marketplaces/digital platforms are solidarily liable if they fail after notice to remove/disable access to prohibited, imminently injurious, unsafe, or dangerous goods/services. Also, the digital platform generally isn’t liable for good faith reliance on merchant representations/documents, provided it shows good faith and reasonable efforts to verify.
Consumers may pursue repair, replacement, refund or other remedies under RA 7394 and relevant laws for defects, malfunction/loss without consumer fault, or failure to conform with warranties. For damages, the consumer may claim damages by filing a case before court or DTI within two years from the time the cause of action arose; Civil Code/RA 7394 and other laws govern.
For deceptive, unfair, or unconscionable sales/practices via the internet: fines increase by offense number (P20,000–P100,000 first; P100,000–P500,000 second; P500,000–P1,000,000 third/subsequent) in addition to RA 7394 penalties. For willful/unreasonable refusal to comply with takedown orders: fines range P20,000–P100,000 first; P100,000–P500,000 second; P600,000–P1,000,000 third/subsequent. Additional takedown (permanently removing listings) may be imposed when applicable, without prejudice to other civil/criminal liabilities.