Little is it known that the implementing rules and regulations or IRR of Republic Act No. 11967 or the Internet Transactions Act (ITA) was finally signed last May, about five months after the law was enacted.
RA 11867 and its IRR primarily aim to promote and maintain a robust electronic commerce environment in the country by building trust between online merchants and online consumers and 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, among others.
The law applies to both business-to-business (B2B) and business-to-consumer (B2C) internet transactions within the mandate of the Department of Trade and Industry where one of the parties is situated in the Philippines or where the digital platform, e-retailer, or online merchant is availing of the local market and has minimum contacts here. It does not include online media content and consumer-to-consumer (C2C) transactions.
It has extraterritorial application so that one who engages in e-commerce, who avails of the Philippine market to the extent of establishing minimum contacts here, shall be subject to applicable Philippines laws and regulations and cannot evade legal liability in the country despite lack of legal presence here.
The ITA called for the creation of the E-Commerce Bureau under the DTI whose functions include exerting efforts to enforce the registration of digital platforms and online merchants, receiving and referring business and consumer complaints on internet transactions to the appropriate government agency, investigating motu propio and recommending the filing of the appropriate case for violations of the law, among others.
Within one year from the effectively of the law, this bureau is mandated to establish a database of digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce in the Philippines that will provide the government and online consumers access to their contact information.
Under this new law, the DTI secretary, after investigation or verification, may issue an ex parte takedown ordering the removal of a listing or offer on a webpage, platform or application, regardless of the intended nature of the transaction, for the sale or lease of prohibited or regulated goods or services such as counterfeit goods or drugs provided that the prohibited nature of the goods and services is apparent from the photo or description in the post, among others.
The DTI secretary may also order the establishment of a publicly accessible list of websites, webpages, online applications, social media accounts, or other similar platforms that fail to comply with a compliance or takedown orders. The blacklist shall be made publicly available
But what’s even better about this new law is that it provides for remedies available to online consumers in case of defect, malfunction, or loss without the fault of the online consumer or in case of failure to conform with warranty or any liability of the online merchant or e-retailer arising from the contract. These remedies include the online consumer’s right to pursue repair, replacement, refund, or other remedies provided by RA 7394 or the Consumer Act or other laws.
Meanwhile, the online consumer is required to exercise ordinary diligence in any internet transaction and to observe certain obligations such as not cancelling confirmed orders for the delivery of purchased goods when the said items have already been paid for by or the goods are perishable in nature and are already in the possession of a third-party delivery service or otherwise in transit to the online consumer unless the online consumer uses electronic or digital payment and has already authorized the crediting of the amount despite cancellation, or the transaction allows cancellation for a fee, or the parties agree otherwise, among others.
On the part of e-marketplaces, they are mandated to require, as far as practicable, all their online merchants whether foreign or Filipino to submit a number of documents and information prior to listing including their contact details (mobile or landline number and a valid e-mail address), geographic address where the merchant is located; to provide an effective and responsive redress mechanism for online consumers and merchants to report a user or information posted on the platform that are deemed in violation of relevant laws, to name a few.
In the case of e-retailers and online merchants, the law requires them to ensure that the goods received by the online consumer are fit for the purpose for which they were intended, that these goods have the same specifications as provided by the seller, among others.
The e-retailer or online merchant shall be primarily liable for indemnifying the online customer in civil actions or administrative complaints arising from the internet transaction while the e-marketplace or digital platform that facilitated the internet transaction subject of the action shall be subsidiarily liable to the online customer if it failed to exercise ordinary diligence, if the online merchant has no legal presence in the Philippines, etc.
Statista.com projects that revenues in the local e-commerce market will reach $14.66 billion this year and that revenues will show an annual growth rate of 11.27 percent from 2024 to 2029, resulting in a projected market volume of $25.01 billion by 2029.
The number of users in the market is expected to amount to 31.6 million users by 2029 while user penetration is seen growing from 19.3 percent this year to 31.9 percent in 2029.
With this phenomenal growth, it is about time that the government provide adequate protection to online consumers, that it weed out undesirable online merchants which prey on unsuspecting customers, that online transactions be kept safe. After all, the online customer’s trust is key.
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