Protect Online Consumers, Merchants Act 2023

State policy and purpose

Section 2 declares it State policy to promote and maintain a robust electronic commerce (e-commerce) environment by building trust between online merchants and online consumers.
Section 2 recognizes the value and potential of the digital economy to increase competition and improve productivity.
Section 2 requires the State to guarantee effective regulation of e-commerce to protect consumer rights and data privacy, encourage innovation, promote competition, secure internet transactions, uphold intellectual property rights, ensure product standards and safety compliance, and observe environmental sustainability.

Coverage, scope, and exclusions

Section 3 applies the Act to all business-to-business and business-to-consumer internet transactions within the mandate of the Department of Trade and Industry (DTI).
Section 3 applies when one (1) of the parties is situated in the Philippines or when the digital platform, e-retailer, or online merchant is availing of the Philippine market and has minimum contacts therein.
Section 3 excludes online media content from coverage.
Section 3 excludes consumer-to-consumer (C2C) transactions from coverage.

Core definitions and key concepts

Section 4(a) defines Business-to-business Transaction as internet transactions between businesses, such as between a manufacturer and a wholesaler, or a wholesaler and a retailer, whether the parties are natural or juridical persons.
Section 4(b) defines Business-to-consumer Transaction as internet transactions between businesses and end-users.
Section 4(c) defines Consumer-to-consumer (C2C) Transactions as transactions between end-users for personal, family, or household purposes and not done in ordinary course of business.
Section 4(d) defines Digital Platforms as ICT-enabled mechanisms that connect and integrate producers and users in online environments where goods and services are requested, developed, and sold, and data is generated and exchanged, including e-marketplace, mobile application platforms, online delivery platforms, social media platforms, and travel platforms.
Section 4(e) defines E-marketplace as a digital platform that connects online consumers with online merchants, facilitates shipment/logistics and post-purchase support within such platforms, and otherwise retains oversight over consummation of the transaction.
Section 4(f) defines E-retailer as a natural or juridical person selling goods or services directly to online consumers through its own website, webpage, or application.
Section 4(g) defines Goods as physically or digitally produced items over which ownership or proprietary rights may be established and transferred by entering into a transaction.
Section 4(h) defines Internet Transaction as sale or lease of digital or non-digital goods and services over the internet; it states that internet transactions also refer to e-commerce.
Section 4(i) defines Online Consumer as a natural or juridical person who purchases, leases, receives, or subscribes to goods or services over the internet for a fee.
Section 4(j) defines Online Merchant as a person selling non-financial goods or services to online consumers through an e-marketplace or third-party digital platforms, and also treats an e-retailer as an online merchant when it offers the same goods/services outside its own website through a third-party digital platform and the online consumer purchases through that platform.
Section 4(k) defines Producer as the manufacturer or importer of goods, or any person purporting to be manufacturer, who places its name, trademark, or other distinctive sign on goods.

Extraterritorial coverage and equal treatment

Section 5 provides extraterritorial application: a person who engages in e-commerce and avails of the Philippine market to the extent of establishing minimum contacts is subject to applicable Philippine laws and regulations.
Section 5 prohibits evasion of legal liability in the Philippines despite lack of legal presence in the country.
Section 6 requires equal treatment of online and offline commercial activities unless otherwise specified.
Section 6 mandates that persons engaged in e-commerce must not enjoy beneficial treatment more favorable than offline enterprises, nor be placed at a disadvantage.

E-Commerce Bureau: creation, structure, and powers

Section 7 requires the creation of the E-Commerce Bureau under the DTI within six (6) months after the Act’s effectivity.
Section 7 provides that the Bureau is headed by a Director and at least one (1) Assistant Director with competencies in e-commerce and online transactions and the laws and processes related thereto.
Section 7 empowers the DTI Secretary to determine the Bureau’s organizational structure and staffing pattern subject to approval by the Department of Budget and Management and consistent with civil service laws, rules, and regulations.
Section 8 authorizes the Bureau to formulate policies, plans, and programs for robust and dynamic e-commerce development.
Section 8 requires the Bureau to implement, monitor, and ensure strict compliance with the Act.
Section 8 directs the Bureau to exert efforts to enforce registration of digital platforms and online merchants and to require submission of necessary information for policy-making and program development, consistent with data minimization and proportionality under data privacy principles.
Section 8 empowers the Bureau to receive and refer business and consumer complaints on internet transactions to the appropriate government agency under the DTI “no-wrong door policy.”
Section 8 authorizes the Bureau to investigate motu propio and recommend the filing of the appropriate case for violations of the Act.
Section 8 requires the Bureau to develop consumer education and information programs emphasizing rights, responsibilities, and red flags in internet transactions, with special attention to vulnerable and disadvantaged consumers.
Section 8 directs collaboration with the BSP and other agencies to develop frameworks to incentivize digital payments and promote their education and adoption among businesses and consumers.
Section 8 requires formalized inter-regulator cooperation mechanisms with law enforcement and relevant government agencies for cross-cutting issues affecting online consumers and the general public.
Section 8 prohibits exercise of Bureau powers in a way that stifles innovation, restricts competition, creates barriers to entry, or impedes ease of doing business.

Complaints, Online Business Database, and Trustmark

Section 9 provides that the Bureau shall refer complaints involving violations of other laws committed in the course of e-commerce to the appropriate regulatory authority for action.
Section 9 allows the DTI to initiate a formal complaint with appropriate regulatory authorities in appropriate cases.
Section 9 requires the Bureau to track each complaint/referral and coordinate speedy resolution.
Section 10 requires the Bureau, within one (1) year from effectivity, to establish the Online Business Database (OBD) of digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce in the Philippines.
Section 10 requires the OBD to provide government and online consumers access to contact information of online businesses.
Section 10 directs the DTI to use existing business databases and coordinate with other agencies maintaining similar databases.
Section 10 requires DTI (in consultation with DICT, NPC, PCC, SEC, CDA, and other concerned agencies) to issue regulations governing development, management, operation, and maintenance of the OBD consistent with Republic Act No. 11032 and Republic Act No. 11032’s relevant framework.
Section 11 directs DTI to encourage development of an E-Commerce Philippine Trustmark (“Trustmark”) to provide assurance of safety and security in internet transactions.
Section 11 provides that the Trustmark may be established and operated by an industry-led private sector governance body.

DTI powers: jurisdiction, subpoenas, compliance, takedown

Section 12 vests the DTI with regulatory jurisdiction over the use of internet for conducting e-commerce by e-marketplaces, online merchants, e-retailers, digital platforms, and third-party platforms.
Section 12 makes DTI jurisdiction ancillary to regulatory jurisdiction granted by existing laws to other agencies such as DICT, BSP, and NPC.
Section 12 requires DTI to give reasonable notice and coordinate with the appropriate regulatory agency prior to enforcement of Act provisions.
Section 12 requires that nothing in the Act diminishes or deprives other agencies of regulatory jurisdiction over services they regulate despite an e-commerce aspect.
Section 13 empowers the DTI Secretary to issue summons, subpoena ad testificandum, and subpoena duces tecum to compel attendance and document production in investigations or proceedings before the Bureau.
Section 13 authorizes filing of a contempt case under the Rules of Court for failure to comply with subpoena ad testificandum and subpoena duces tecum.
Section 13 provides that a subpoena duces tecum is valid if it covers matters within DTI jurisdiction, is reasonably relevant, and identifies or describes the information/document sought to be produced.
Section 14 empowers the DTI Secretary to issue a compliance order requiring conformity with the Act, Republic Act No. 7394 (Consumer Act of the Philippines), or other applicable DTI trade and consumer protection issuances.
Section 15 empowers the DTI Secretary, after investigation or verification, to issue an ex parte takedown order directing removal of a listing or offer on a webpage, platform, or application.
Section 15 allows takedown when the listing/offer involves: (a) sale/lease of goods or services prohibited or regulated (including endangered animals, illicit drugs, fireworks and other explosives, and counterfeit goods) when the prohibited nature is apparent from the photo or description in the post; (b) sale/lease subject of a cease and desist order by an appropriate government agency; (c) reposting and proliferations after a takedown order; or (d) transactions in DTI jurisdiction purporting to sell/lease that threaten public or personal safety or compromise financial or personal information.
Section 15 permits other regulatory government agencies to request DTI to issue takedown orders for violations within their jurisdiction.
Section 15 clarifies that other agencies may still exercise their own regulatory authority, including issuing orders directly to the erring entity to prevent or stop sales within their jurisdiction.
Section 15 requires that the violating entity be given an opportunity to be heard within forty-eight (48) hours from issuance of the takedown order.
Section 15 directs takedown orders against the e-retailer or online merchant and the owner or operator of the e-marketplace or digital platform, and requires service on entities needed for enforcement, including the registered internet service provider involved, related payment gateways, and other government agencies.
Section 15 limits takedown orders to a maximum of thirty (30) days unless extended or made permanent by judicial order or decision.
Section 16 authorizes the DTI Secretary to establish a publicly accessible blacklist of websites/webpages/applications/social media accounts or similar platforms that fail to comply with a compliance order, or are subject to takedown orders under Chapter III, or cease and desist orders issued by an appropriate government agency, indicating the specific violation.
Section 16 requires the blacklist entry for failure to abide by a compliance order to specify the act or requirement subject of the compliance order.
Section 16 requires the blacklist to be publicly available and furnished to digital platforms and financial regulators.
Section 16 requires the DTI to remove blacklist entries promptly after compliance/correction, either motu proprio or upon request, without necessity of a hearing.

Online Dispute Resolution and required development

Section 17 requires DTI, within six (6) months from effectivity, to develop a platform facilitating an alternative mode of dispute resolution for online consumers, online merchants, e-retailers, e-marketplaces, and other digital platforms.
Section 17 requires DTI, in consultation with other concerned agencies, to issue implementing rules and regulations on ODR procedure, and on the development, management, operations, and maintenance of the ODR platform.

Parties’ duties and conduct in transactions

Section 18 requires DTI, in consultation with relevant government agencies, to provide a Code of Conduct for businesses engaged in e-commerce consistent with international trends, developments, standards, and best practices.
Section 18 requires DTI, when necessary, to issue guidelines, rules and regulations including voluntary and binding co-regulation mechanisms considering the role, size, and impact in internet transactions.
Section 19 requires the online consumer to exercise ordinary diligence in any internet transaction.
Section 19 prohibits an online consumer from canceling confirmed orders when the purchased items have already been paid for, are paid for, are perishable, are in the possession of a third-party delivery service, or are otherwise in transit—unless one of the enumerated exceptions applies.
Section 19 allows cancellation only if: (a) the online consumer uses electronic/digital payment and authorized crediting despite cancellation; (b) the online consumer reimburses the third-party delivery service as a pre-condition; (c) the transaction allows cancellation for a fee; or (d) the parties agree otherwise.
Section 20 grants the online consumer the right to pursue repair, replacement, refund, or other remedies provided under Republic Act No. 7394 or relevant laws when there is defect, malfunction, loss without the consumer’s fault, or failure to conform with warranty or other merchant/e-retailer liability arising from the contract.
Section 20 requires that when replacement or refund is used, the online merchant is entitled to return of original goods delivered within a reasonable period from receipt, without cost to the online consumer, unless parties agree otherwise.
Section 20 requires immediate reimbursement to the online merchant/e-retailer when refund is already paid but goods cannot be returned due to the online consumer’s fault, subject to proportionate reduction in price if appropriate.

E-marketplace and digital platform duties

Section 21 requires e-marketplace obligations unless otherwise provided in the Act.
Section 21(a) requires e-marketplace to ensure its platform transactions are clearly identifiable as e-commerce, identify the person on whose behalf the transaction is made, and identify promotional offers (including discounts, premium, gifts) with accessible, clear, and unambiguous qualification conditions.
Section 21(b) requires e-marketplace to require online merchants to submit, prior to listing: (1) merchant name and at least one (1) valid government identification (individuals) or business registration documents (juridical entities); (2) geographic address of the online merchant; (3) contact details including mobile or landline number and a valid e-mail address; and (4) membership details in any professional body when connected with exercise of a regulated profession.
Section 21(b) requires transparency: except for government identification/registration documents and required contact details, the information must be published/posted on the e-marketplace/digital platform unless the platform facilitates communication between merchants and consumers or provides a link to the OBD.
Section 21(c) requires e-marketplace to maintain an updated and regularly verified list of all online merchants registered under its platform containing the information required under Section 21(b).
Section 21(c) requires e-marketplace to provide specific information upon issuance of a subpoena by competent authority in an investigation based on a sworn complaint where (i) the e-marketplace or e-retailer is used in a crime or (ii) it was used to commit a malicious, fraudulent, or unlawful act, and the complaint cannot ascertain the perpetrator’s identity.
Section 21(d) requires e-marketplace to protect consumer data privacy at all times under Republic Act No. 10173 and comply with minimum information security standards set by the Bureau, NPC, and other relevant agencies.
Section 21(d) provides that digital platforms and e-marketplaces are covered by Republic Act No. 10173 and NPC issuances.
Section 21(e) requires e-marketplace to prohibit sale of regulated goods unless necessary permits/license information are provided and merchants contractually obligate compliance with sale procedures, limitations, and other conditions under law or local government regulation.
Section 21(f) requires an effective and responsive redress mechanism for reporting violations posted on the platform.
Section 21(g) requires online merchants to clearly indicate: (1) name and brand of goods/services; (2) price; (3) description; and (4) condition in their online product offers.
Section 21(g) requires e-marketplace and other digital platforms to observe ordinary diligence; failure subjects them to penalties under Section 29.
Section 22 imposes obligations on other digital platforms that do not retain oversight over the consummation of the transaction.
Section 22(a) requires platforms to enable consumers to distinguish between commercial and non-commercial/private accounts.
Section 22(b) requires platforms to prohibit sale/advertisement of regulated goods without necessary permits/license information and contractual obligation by merchants to comply with sale procedures/limitations/conditions under law or local regulation.
Section 22(c) requires merchants to indicate: (1) name/brand; (2) price; (3) description; (4) condition; and (5) contact information on their online offers.
Section 22(d) requires an effective and responsive redress mechanism for reporting users/information deemed in violation of relevant laws.
Section 22(e) requires platforms, as far as practicable, to maintain an updated list of accounts using the platform for e-commerce and to provide specific information upon issuance of subpoena in the same crime/unlawful-act and inability-to-identify-perpetrator circumstances described in Section 21(c).
Section 22(f) requires platforms to protect consumer data privacy under Republic Act No. 10173 and comply with minimum information security standards set by the Bureau, NPC, and other agencies, with coverage by Republic Act No. 10173 and NPC issuances for digital platforms and e-marketplaces.
Section 22 requires ordinary diligence in performing obligations; failure subjects platforms to penalties under Section 29.

E-retailer and online merchant responsibilities

Section 23(a) requires e-retailers and online merchants to indicate the price of goods/services offered consistent with Article 81 of Republic Act No. 7394.
Section 23(b) requires that goods are received in the same condition, type, quantity, and quality as described and stated, and in applicable circumstances possess functionality, compatibility, interoperability, and fitness for the intended purpose.
Section 23(b) requires conformance to samples/pictures/models shown upon consumer request and to additional descriptions/specifications provided in response to consumer inquiries.
Section 23(b) requires goods to be fit the particular purpose communicated at contract perfection and accepted by the merchant.
Section 23(c)(1) requires delivery of goods together with accessories and all other packaging, installation inclusions, any user manual, or other instructions as advertised/described, if applicable, with relevant information stated in packaging and printed/written in Filipino and/or English.
Section 23(c)(2) requires qualities and performance capabilities that are standard and normal for goods of the same type, which a consumer may expect given the goods’ nature and public statements/testimonials in earlier links of the chain of transactions, unless the merchant shows one of the enumerated defenses: not reasonably aware, statement corrected before contract conclusion, or purchase decision could not have been influenced.
Section 23(d) requires digital goods/services providers to ensure qualities and performance features regarding functionality, compatibility, interoperability, accessibility, continuity, and security that are standard and normal for digital goods/services of the same type as advertised/described.
Section 23(e) requires completion of any service performance offered through a digital platform in accordance with the contract and as advertised.
Section 23(f)(1) requires an e-retailer to publish on its homepage its corporate/trade/business name as appropriate; its physical shop/business address; contact details including mobile/landline and valid e-mail address; and membership details in a professional body when connected with a regulated profession.
Section 23(f)(1) requires submission of the foregoing to the Bureau and accompaniment by at least one (10) government identification card or registration document as valid proof of identity.
Section 23(g) requires delivery-engaged e-retailers/online merchants to have the right to require consumers to provide at least a valid e-mail address or mobile phone number before entering into a transaction.
Section 23(h) requires e-retailers/online merchants to issue paper or electronic invoices or receipts for all sales.
Section 23(i) requires e-retailers to have an accessible and efficient redress mechanism for handling complaints from clients.

Internal redress, liability allocation, and platform exposure

Section 24 requires an aggrieved party to use the internal redress mechanism of the digital platform, e-marketplace, or e-retailer prior to filing a complaint in court or before any appropriate government agency, or resorting to alternative dispute resolution.
Section 24 deems the internal redress mechanism exhausted if the complaint remains unresolved after seven (7) calendar days from filing.
Section 25 establishes primary liability of the e-retailer or online merchant to indemnify the online consumer in civil actions or administrative complaints arising from the internet transaction, without prejudice to other penalties under Section 29 and other laws.
Section 25 treats the liability of the e-marketplace or digital platform as one and the same as the online merchant upon a finding that both are the same entity.
Section 26 establishes subsidiary liability of e-marketplaces/digital platforms when the facilitated transaction leads to loss/damage and one of the enumerated circumstances exists: failure to exercise ordinary diligence under Sections 21 and 22; failure after notice to act expeditiously to remove/disable access to infringing/prohibited content or to act on takedown orders; or failure, after notice, to provide contact details when the online merchant has no legal presence in the Philippines.
Section 26 limits subsidiary liability to the extent of damages suffered by the online consumer as a direct result of the transaction, without prejudice to other liabilities under the Act or other laws.
Section 26 provides a limitation: digital platforms/e-marketplaces are not liable for good-faith reliance on an online merchant’s representations, warrantless, or submitted registration documents even if later proved inaccurate/false/untrue, provided evidence of good faith and reasonable effort to ascertain and maintain accuracy/authenticity/veracity of submitted information/documents is shown.
Section 27 imposes solidary liability on e-marketplaces/digital platforms if, after notice, they fail to act expeditiously to remove/disable access to goods/services that are prohibited by law, imminently injurious, unsafe, or dangerous.
Section 27 provides that solidary liability is without prejudice to appropriate penalties under Section 29 or other laws.

Damages, claims period, and governing law

Section 28 allows a consumer to claim damages by filing a case before the court or the DTI within two (2) years from the time the cause of action arose.
Section 28 provides that the right to damages is governed by the Civil Code, Republic Act No. 7394, and other existing laws.
Section 33 requires application of Civil Code provisions on sales, obligations, and contracts when construing parties’ rights and responsibilities.

Administrative penalties and takedown refusal fines

Section 29 requires the DTI to impose administrative fines against covered parties for specified violations and acts.
Section 29(a) requires punishment under laws/rules/regulations that prohibit or regulate such acts for an online merchant/e-retailer that sells/leases/permits sale/lease of goods or services (digital or not) that are imminently injurious, unsafe, dangerous, or illegally done through the internet.
Section 29(b) requires additional penalties for deceptive, unfair, or unconscionable sales acts/practices done through the internet, on top of penalties under Republic Act No. 7394.
Section 29(b)(1)-(3) sets fine ranges for deceptive, unfair, or unconscionable sales acts: P20,000.00 to P100,000.00 for the first offense; P100,000.00 to P500,000.00 for the second offense; and P500,000.00 to P1,000,000.00 for the third and subsequent offenses.
Section 29(c) penalizes willful or unreasonable refusal to comply with takedown orders under Section 15(a), (c), and (d) with fine ranges: P20,000.00 to P100,000.00 for the first offense; P100,000.00 to P500,000.00 for the second offense; and P600,000.00 to P1,000,000.00 for the third and subsequent offenses.
Section 29(d) requires additional penalties for any person found in violation of Section 19 or 20, on top of the value of goods/services subject of the transaction:
- For goods/services amounting to not more than P100.00: a fine not less than P100.00 but not more than P5,000.00.
- For goods/services amounting to more than P100.00 but less than P1,000.00: a fine not less than P1,000.00 but not more than P10,000.00.
- For goods/services priced at P1,000.00 or more: a fine not less than the value but in no case shall exceed P20,000.00.
Section 29(e) provides fines for violations by an online merchant/e-retailer/e-marketplace/digital platform of Sections 21, 22(b), (c), (d), and 23(a), (f), or (i) with escalating ranges based on offense number:
- P5,000.00 to P10,000.00 for the second offense.
- P10,000.00 to P50,000.00 for the second offense.
- P50,000.00 to P100,000.00 for the third and subsequent offenses.
Section 29 requires the DTI Secretary to increase the schedule of fines every five (5) years to maintain their real value from the time it was set.
Section 29 requires the DTI Secretary, when fixing fines, to consider both the gravity and **duration