Republic of the Philippines Congress of the Philippines Metro Manila Nineteenth Congress Second Regular Session Begun and held in Metro Manila, on Monday, the twenty-fourth day of July, two thousand twenty-three.
AN ACT PROTECTING ONLINE CONSUMERS AND MERCHANTS ENGAGED IN INTERNET TRANSACTIONS, CREATING FOR THIS PURPOSE THE ELECTRONIC COMMERCE BUREAU, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:
Business-to-business Transaction refers to internet transactions of a wholesale nature and is between a manufacturer and wholesaler or a wholesaler and retailer, whether the transacting parties are natural or juridical persons.
Consumer-to-consumer Transaction refers to internet transactions between consumers for personal or household purposes and not done in the ordinary course of business.
Digital Platforms refer to information and communication technology-enabled mechanisms that connect sellers and consumers and facilitate the sale of goods and services. Digital platforms include e-commerce websites, online marketplaces, social media platforms, and travel platforms.
E-marketplace refers to digital platforms whose business model is to provide a platform where multiple sellers can list their products and services, and the platform facilitates the sale of these products and services. E-marketplaces are responsible for ensuring that consumer product standards are upheld, monitor compliance with applicable laws and regulations, ensure product sustainability, and observe environmental compliance.
Vendor refers to a natural or juridical person selling goods or services directly to consumers through an e-marketplace or through a platform.
Goods refer to physically or digitally produced items or materials that are (i) manufactured, (ii) extracted, or (iii) distributed and may be established entirely into a new or proprietary item or be assembled into a final transaction.
Services refer to the sale or lease of digital or non-digital goods and services over the internet for personal or household purposes and shall also refer to e-commerce transactions.
Online Consumer refers to a natural or juridical person who purchases goods or services over the internet for a fee.
Product refers to tangible or intangible goods or services offered through a digital platform. A product shall be considered as a consumer good if it is sold, leased, or distributed to a consumer through the internet.
E-retailer refers to a vendor who sells goods or services directly to consumers through the internet.
Hybrid Application refers to a person who has the intent to establish his/her business on a digital platform and at the same time operate an offline platform. Hybrid applications shall be subject to the applicability of this Act and must be registered and developed in the Philippines despite lack of legal presence in the country.
The Bureau shall be headed by a Director and at least one Assistant Director to be appointed by the President upon the recommendation of the Secretary of Trade and Industry. The DTI Secretary shall determine the staffing pattern and organizational structure of the Bureau, subject to the approval of the Department of Budget and Management (DBM), and consistent with the civil service laws and regulations.
Formulate policies, plans, and programs to ensure the robust and dynamic development of e-commerce;
Lead efforts to enforce the registration of digital platforms and ensure strict compliance with the provisions of this Act, and other relevant laws, rules, and regulations;
Promote consumer education and information dissemination by raising awareness of digital trade-related consumer rights, responsibilities, and opportunities, and by providing standardized consumer information and guidelines;
Assist in the resolution of e-commerce-related disputes and complaints to make informed choices and resolve conflicts, consistent with the laws and regulations;
Collaborate with Bangko Sentral ng Pilipinas (BSP) and other government agencies to develop frameworks to ensure the safe use of digital payment platforms;
Engage with law enforcement and other relevant government agencies to address online concerns that affect online consumers and the general public;
Identify regulatory gaps affecting the commerce and recommend appropriate measures that foster the growth of the sector;
Monitor the implementation of this Act for policy-making and program development purposes;
Investigate, motu proprio, and recommend the filing of the appropriate action on any matter that may prejudice e-commerce;
Coordinate with other public or private entities, through the DTI Secretary, to take action on any matter that affects e-commerce;
Review and refer business and consumer complaints consistent with the "no wrong door" policy of the DTI; and
Perform such other functions as may be necessary to carry out the objectives of this Act. The powers of the Bureau shall not be exercised in a manner that stifles the entry in trade, or impedes the ease of doing business.
Provided, however, That the regulatory authority of the DTI includes, but is not limited to, the following: (a) Security Standards and Privacy Policies; (b) Consumer Protection; (c) Data Privacy; and (d) Anti-Fraud Activities. The DTI shall be reasonably notified, in writing, of any policies, rules, or regulations to be promulgated by other government agencies affecting e-commerce activities, services, digital platforms, and third-party platforms. Nothing in this provision shall be construed as limiting the authority of other government agencies in the exercise of their respective mandates.
A subpoena duces tecum is valid if issued on matters within the regulatory jurisdiction of the DTI and is reasonably necessary or relevant to the subject matter of the investigation or proceeding. The subpoena shall describe the documents sought to be produced, allowing it to be identified.
In establishing the OBD, the DTI shall utilize existing business databases and coordinate with other agencies that already maintain the same or similar databases. The DTI, in consultation with the Department of Information and Communications Technology (DICT), the National Privacy Commission (NPC), the Philippine Competition Commission (PCC), the Cooperative Development Authority (CDA), and other concerned agencies, shall develop and implement rules and regulations for the establishment, operation, and maintenance of the OBD, consistent with Republic Act No. 11032 or the "Ease of Doing Business and Efficient Government Service Delivery Act of 2018."
The takedown order shall be directed against the seller/marketplace or digital platform operator of the concerned online or traditional store. Copies of the order shall likewise be furnished to payment gateways, logistics service providers, and other concerned intermediaries, but not limited to, payment gateways and other government agencies tasked to regulate and monitor e-commerce transactions. The order shall remain in effect for a maximum period of forty-eight (48) hours from the issuance or made permanent by a judicial order or decision.
Sale or lease of goods or services which are prohibited as regulated under this Act and other related laws, rules, and regulations, including the sale of prohibited drugs, firearms, and other regulated goods;
Sale or lease of goods or services subject of cases investigated and adjudicated under this Act or other related laws, rules, and regulations, including the sale of goods or services apparent from the photo or description in posts;
Sale or lease of goods or services subject of cases investigated and adjudicated under this Act or other related laws, rules, and regulations, including the sale of goods or services previously subject of a takedown order or cease and desist order issued under this Act or other related laws, rules, and regulations;
Other violations of consumer protection laws, rules, and regulations, and transactions or activities online, within the jurisdiction of the DTI, that involve the sale of goods or services that compromise financial or personal information. Other regulatory government agencies may request the DTI to include other online sellers or platforms under this provision. Nothing in this Act shall preclude any regulatory government agency from issuing orders directly to any person or entity to stop the sale of goods or services under its jurisdiction. The violating entity shall be given an opportunity to be heard through the right to appeal the necessity of the takedown order.
If the transaction includes the delivery of the purchased goods or entails payment for a fee or service, the online consumer shall pay for the goods or services at the agreed price and at the agreed time, and provide the necessary information for the delivery of the goods or services, or otherwise in relation to the transaction. The online consumer uses electronic or digital payment(s) and authorized the crediting of the amount despite cancellation. The online consumer reimburses third-party delivery service(s). The transaction allows cancellation for a fee, or The parties agree otherwise.
When the online consumer avails replacement or refund as a remedy, the online consumer shall be entitled to the amount of the original good delivered, minus any fee that the online consumer is obligated to pay, provided that the returned goods are in good condition and that the online consumer has already paid for the goods. If the payment is made through a third-party payment service, the refund shall be processed through the same payment service and shall be immediately reimbursed to the online consumer or available subject to provisions on transaction reduction, as may be appropriate.
Ensure that the internet transactions on their platform: (1) Are clearly identifiable as an e-commerce transaction. (2) Identify the person or persons on whose behalf the e-commerce transaction is made. (3) Identify any promotional offer, including any discount, rebate, premium, gift, and promotional-sweepstake, to qualify for free access, is clear, fair, and unambiguous.
Require, as far as practicable, all online merchants listing their platforms to submit the following, prior to which: (1) Name of the online merchant accompanied by at least one (1) government-issued identification card or business registration documents for juridical entities. (2) Geographic address where the online merchant is located. (3) Contact details of the online merchant which must include a valid mobile number and a valid e-mail address, and (4) In instances when the services offered by a qualified professional, a certificate of authority or similar proof of qualification, affiliation with an online merchant registered or delivery, is a member of. Except for the government identification cards or registration details of the online merchants as required under Section 10(a), the following information shall be prominently displayed or posted in the online marketplace or digital platform: (i) official virtual office address; (ii) official email address; and (iii) official telephone number: Provided, That the online marketplace or digital platform shall ensure that consumers are provided a link to the DTI complaints handling platform. (6) Maintain a list of all online merchants registered under their platform containing the updated information provided in Section 10(a). An online marketplace shall be required to provide specific authority upon the issuance of a subpoena by competent authorities in connection with cases filed against online merchants committing criminal acts, or transacting as unregistered businesses, if said online marketplace or digital platform, after exercising reasonable diligence, is unable to ascertain the identity of the perpetrator. (7) Take the necessary precautions to protect the data privacy of consumers, in compliance with Republic Act No. 10173, otherwise known as the "Data Privacy Act of 2012," and Republic Act No. 8792, otherwise known as the "Electronic Commerce Act of 2000," and other issuances of government agencies, including the NPC. (8) Prohibit the sale of regulated goods unless duly authorized by the appropriate government agencies, and provide consumers with the necessary information on the terms and conditions of the sale of regulated goods. (9) Enable consumers to distinguish between commercial and non-commercial or private sales of goods and services. (10) Immediately provide all necessary information to the appropriate government agencies, including law enforcement agencies, upon request, to ensure the safety and welfare of consumers and fair competition, and to comply with government regulation. (11) Ensure that all fees imposed by any national or local government agency are paid. (12) Prohibit online merchants from selling goods in violation of relevant laws. (13) Require all online merchants to clearly indicate the following information in their product offerings online, regardless of the nature of the goods and services: (i) Name and brand of the goods or services; (ii) Price; (iii) Description; and (iv) Condition. In performing their obligations under this section, online marketplaces and other digital platforms shall not be penalized under Section 20 of this Act.
Enable consumers to distinguish between commercial and non-commercial or private sales of goods and services.
Immediately provide all necessary information to the appropriate government agencies, including law enforcement agencies, upon request, to ensure the safety and welfare of consumers and fair competition, and to comply with government regulation.
Ensure that all fees imposed by any national or local government agency are paid.
Prohibit online merchants from selling goods in violation of relevant laws. (4) Contact information of the online merchant.
Provide an effective and responsive redress mechanism for complaints of consumers transacting on the platform that are deemed in violation of relevant laws.
Maintain, as far as practicable, an updated list of accounts of online merchants transacting through the platform as required by law, and suspend or remove the online merchant from the platform upon finding that the online merchant is engaged in unlawful acts and the complaints received on the second violation against the same online merchant remain unresolved, or if the platform is unable to ascertain the identity of the perpetrator; and
Take the necessary precautions to protect the data privacy of consumers as required by the Data Privacy Act of 2012 and other relevant laws, rules, and regulations issued by the NPC. In performing their obligations, platforms covered under this Section shall be subject to the penalties under Section 29 of this Act.
Indicate the price of goods and services offered consistent with Article 81 of Republic Act No. 7394;
Ensure that the goods are received by the online consumer. (1) In the same condition, type, quantity, and quality as described and advertised; and, in applicable circumstances, fitness for the purpose for which they were purchased; (2) In the same condition, type, quantity, and quality as described and advertised, or as agreed upon between the provider or seller and the platform that are consistent with the additional consumer specifications made by the online consumer; and (3) Unless otherwise agreed, particularly on pre-order which shall also be fit for the particular purpose for which the goods are required, and within the timeframe or online merchant-stated period.
All the goods shall: (1) Be delivered together with its accessories, including all other instructions, standard or general, if applicable, or where in Filipino and/or English, and packaging, printed materials, and tags; (2) Possess qualities and performance capabilities, including their safety aspects, that are generally expected of the goods of their type, as may be provided in the online consumer manual or instructions, or as may be considered as public statements on the specific characteristics of the goods made by the trader or online merchant, unless the trader or online merchant shows that: (i) The trader or online merchant was not, and could not have been reasonably aware of the statement in question; (ii) By the time of the conclusion of the contract, the statement had already been corrected; or (iii) The decision to buy the goods could not have been influenced by the statement. online merchants shall be covered by the provisions of Republic Act No. 10173, otherwise known as the Data Privacy Act of 2012.
Where the retailer or online merchant is engaged in delivery services, it shall provide the details of its logistics provider, if applicable, including its telephone or mobile phone number before the online transaction.
Where the transaction involves a digital platform that advertises or extends services of the same type as that of the retailer or online merchant, the digital platform shall be responsible for ensuring that the retailer or online merchant shall issue paper or electronic invoices or receipts for all transactions.
Retailers shall, in all places and accessible and efficient mechanisms, maintain a place to accommodate consumer claims.
The digital platform or marketplace fails to exercise ordinary diligence in complying with its obligations under this Act and laws enforced by the Bureau and must be treated as both the retailer and the merchant upon a finding of fault or negligence;
The digital platform or marketplace fails to provide the necessary pre-transactional product data or information as required under this Act, Republic Act No. 7394, otherwise known as the Consumer Act of the Philippines, and other laws;
The digital platform or marketplace fails to ensure compliance with the rules and regulations of the Bureau, NPC, and other government agencies;
The digital platform or marketplace fails to ensure the issuance of relevant government receipts. An e-retailer shall: (i) Publish on its homepage the following: (1) Its corporate and trade or business name, as may be appropriate; (2) Address of the physical shop or place of business; (3) Contact details of the retailer, which must include a number and efficient communication with online consumers; and (4) In instances when the services offered by an e-retailer require membership in any professional body or association, the details of membership, if the e-retailer is registered or otherwise is a member of the same. The foregoing shall be submitted to the Bureau and must be treated as valid proof of identity or registration documents as required under Republic Act No. 10173 and other laws. under Sections 21 and 22 hereof, resulting in loss or damage to the consumer:
If the digital platform or marketplace failed, after notice, to take down or disable access to a product or service that is patently illegal or unreasonably dangerous as determined by the appropriate government agency or through a takedown order by any Philippine court;
If an online merchant has no legal presence in the Philippines and the digital platform or marketplace failed to provide the contact details thereof despite notice. The subsidiary liability of a digital platform or marketplace under this Act shall be without prejudice to the penalties under Republic Act No. 7394 or other liabilities that may be incurred under any other law. Digital platforms or marketplaces shall not be held liable for the authenticity or veracity of goods or services offered by third-party merchants, provided that they exercise ordinary diligence in verifying the authenticity and veracity of the goods or services offered.
Liability under this section shall be without prejudice to any other appropriate penalties under Section 29 of this Act or other laws.
damages under this section shall be governed by the Civil Code.
An online merchant or service provider that sells, leases or allows the sale or lease of products or services that are patently illegal or unreasonably dangerous as prohibited by law, done through the internet or digital platform; or
An online merchant or service provider found guilty of any deceptive, unfair, or unconscionable sales act or practice as defined under Republic Act No. 7394, punishable with penalties imposed under Republic Act No. 7394: (1) A fine ranging from twenty thousand pesos (P20,000.00) to one hundred thousand pesos (P100,000.00) for the first offense; (2) A fine ranging from one hundred thousand pesos (P100,000.00) to five hundred thousand pesos (P500,000.00) for the second offense; (3) A fine ranging from five hundred thousand pesos (P500,000.00) to one million pesos (P1,000,000.00) for the third and subsequent offenses.
An online merchant, e-retailer, or marketplace or digital platform that knowingly or negligently fails to comply with the takedown order issued under Section 15(a), punishable with: (1) A fine ranging from twenty thousand pesos (P20,000.00) to one hundred thousand pesos (P100,000.00) for the first offense; (2) A fine ranging from one hundred thousand pesos (P100,000.00) to five hundred thousand pesos (P500,000.00) for the second offense. (P50,000.00) to Five hundred thousand pesos (P500,000.00) for the first offense and One million pesos (P1,000,000.00) to Ten million pesos (P10,000,000.00) for the second and subsequent offenses. The penalty of a takedown shall be imposed, whereby the DTI Secretary shall direct the online platform to permanently remove any listing or offer on any website, webpage, online application, social media post, or on any similar medium. The application of these penalties shall be without prejudice to the imposition of fines, penalties, or sanctions under other laws or regulations.
The members from the Senate shall include the Chairpersons of the Committees on Trade, Commerce and Entrepreneurship, Science and Technology, and Finance and two (2) members to be designated by the Senate President. The members from the House of Representatives shall include the Chairpersons of the Committees on Trade and Industry, Information and Communications Technology, and Appropriations and two (2) members to be designated by the Speaker of the House of Representatives. The Trade COCIT shall cease to exist after five (5) years from the effectivity of this Act.
Approved, JUAN MIGUEL F. ZUBIRI President of the Senate FERDINAND MARTIN G. ROMUALDEZ Speaker of the House of Representatives This Act was passed by the Senate of the Philippines as Senate Bill No. 1846 on September 25, 2023 and adopted by the House of Representatives as an amendment to House Bill No. 8910 on September 27, 2023. REGINALD VELASCO Secretary General House of Representatives RENATO N. BANTUG JR. Secretary of the Senate Approved: DEC 5 2023 FERDINAND ROMUALDEZ MARCOS JR. President of the Philippines