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19"™CONGRESS =,
First Regular Session +

HOUSE BILL No. 3084 ©

Introduced by REP. ARJO ATAYDE

AN ACT
PROVIDING PROTECTION TO CONSUMERS AND MERCHANTS ENGAGED IN
INTERNET TRANSACTIONS, CREATING FOR THE PURPOSE THE ELECTRONIC
COMMERCE BUREAU, AND APPROPRIATING FUNDS THEREFOR

Asian Development Bank (ADB) Senior Economist James  Villafuerte
acknowledged that Asia is at the center of digital platform development and competition.
In fact, more than 60% or around 1.9 billion out of the worle’s 3.2 billion e-commerce
users are from Asia. In the Philippines, there are about 76 million users of digital
platforms

According to a study’ conducted by the Philippine institute for Development
Studies (PIDS). “The emergence of various digital platforms and the technologies that
drive them will continue to shape our economy and society in ways that we cannot yet
fully anticipate. Their impacts. whether beneficial or detrimental, will largely depend on
government responses end the quality of regulatory governance.” If we put the right
policies in place. we can leverage e-commerce for growth and economic recovery

Atticie I, Section 20 of the 1987 Constitution provides that, “The State recognizes
the indispensable role of the private sector. encourages private enterprise. and provides
incentives to needed investments.” As such, this bill is being proposed to promote the
growth of eCommerce and online transactions. It aims to provide a framework for the
regulation of internet commercial transactions with the end goal of promoting competition,
innovation, ensuring safe and reliable digital communication, and consumer protection

Given the abovementioned circumstances. the immediate passage of this bill is
earnestly sought.

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REP. ARJO ATAYDE

*-Understanding the costs and benefits of digital platforms and the implications fay policymaking and
regulation N


19"" CONGRESS
First Regular Session

HOUSE BILL NO. 3084

Introduced by REP. ARJO ATAYDE

AN ACT
PROVIDING PROTECTION TO CONSUMERS AND MERCHANTS ENGAGED IN
INTERNET TRANSACTIONS, CREATING FOR THE PURPOSE THE ELECTRONIC
COMMERCE BUREAU, AND APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and the House of Representatives of the Philippines
in Congress assembled:

CHAPTER 1
GENERAL PROVISIONS

SECTION 1. Short Title. -This Act shall be known as the “Internet Transactions
Act”.

SEC. 2, Declaration of Policy. - It is the policy of the State to promote and
maintain a robust electronic commerce (eCommerce) environment in the country by
building trust between online merchants and consumers. The State recognizes the value
and potential of the digital economy to increase competition and improve productivity,
thus the need to establish secure and reliable eCommerce platforms where goods and

services are transacted online with appropriate transparency and utmost efficiency to
encourage the creation of new products, services, business models and processes.
Towards these ends, the Stare shal! ensure an effective regulation of commercial
activities through the internet or electronic means to ensure that consumer rights and data
privacy are protected, innovation is encouraged, fair advertising practices and competition
are promoted, online transactions are secured, intellectual property rights are respected,
and where product standards and safety are observed.


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SEC. 3. Definition of Terms. - As used in this Act:

Business to business transaction refers to intemet transactions conducted over
marketplaces that facilitate business to business electronic sales of new and used
merchandise using the internet;

. Business to consumer transaction refers to the process of selling products and

services by businesses to consumers who are end-users, generally for a profit;

. Compatibility refers to the ability of the digital content or digital service to function

with hardware or software with which digital content or digital services of the same
type are normally used, without the need to convert the digital content or digital
service;

Consumer refers to a person who is a purchaser, lessee, recipient or prospective
purchaser, lessor or recipient of consumer products, services, credit, technology,
advertising or promotion, and other items in eCommerce;

. Consumer-to-consumer transactions (C2Cs) refer to one-off, petty, or occasional

low- value transactions of an individual or group of individuals to another that are
not made in the ordinary course of business of any party to the transaction;

Digital content refers to data which are produced and supplied in electronic form;

. Digital service refers to a service that aliows the consumer to create, process, store

or access data in electronic form or allows the sharing of or any other interaction
with data in electronic form uploaded or created by the consumer or other users of
that service;

Digital financial services refer to services of a financial nature that are made
available to the public through the internet, including banking services, insurance
and insurance-related services, payment and money transmission services,
including remittance services, online lending services, online investment services,
and other similar or related services;

Electronic commerce or eCommerce refers to the production, distribution,
marketing, sale, or delivery of goods and services by electronic means;

eCommerce platform operator refers to a natural or juridical person that solicits the
purchase of goods and services through digital platforms and marketplaces whose
business is to connect consumers and online merchants, facilitating sales of
products, goods, or services through the internet with the presence and use of
monetary transactions. These shall include social media websites and any other
similar platforms in so far that it is used for business;


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Functionality refers to the ability of the digital content or digital service to perform
its functions according to its purpose:

Goods, refers to physically or digitally produced items over which ownership rights
may be established and whose economic ownership may be passed from one
institutional unit to another by engaging in transactions,

. Intemet access and service provider refers to an entity that provides households,

businesses, and government access to the internet through the physical transport
infrastructure;

Internet retailing of consumer goods refers to engaging in any eCommerce activity
other than online travel services, online media, ride-hailing services, and digital
financial services;

. Internet transaction refers to the sale or purchase of goods or services, whether

between businesses, households, individuals, governments, and other public or
private organizations, conducted over the internet. At least one point of these
transactions is conducted over the internet, but the payment and ultimate delivery
of the goods or service may be conducted on or offline;

.. Interoperability refers to the ability of the digital content or digital service to function

with hardware or software different from those with which digital content or digital
services of the same type are normally used;

Online merchant refers to @ natural or juridical person, regardless of location, that
directly sells, manufactures goods, or offers for sale, any good or service, either
individually or through a platform, in the ordinary course of business, over the
intemet, through a website, an online marketplace, a social media website or
application or through other similar means:

Online media refers to digital media products or services pertaining to advertising,
gaming, subscription music, and video on demand, available through an online
platform, application, website, webpage, social media account, or other similar
platforms operated by the provider, regardless of whether the provider is
authorized to engage in eCommerce;

Online travel services refer to services that facilitate the reservation, purchase or
discounting of flights, hotel accommodations, and vacation rental spaces, through
an online platform, application, website, webpage, social media account, or other
similar platform operated by the provider, regardless of whether the provider is
authorized to engage in eCommerce in the Philippines:


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Price refers to money or a digital representation of value that is due in exchange
for the supply of goods, services, digital content, or digital service;

Producer refers to the manufacturer or importer of goods, or any person purporting
to be a manufacturer who places its name, trademark, or other distinctive sign on
goods;

. Repair refers to bringing defective goods into conformity with the contract;

Ride-hailing service refers to the delivery of food, goods or other merchandise, or
of personal transport services, contracted through an online platform, application,
website, webpage, social media account, or other similar platform operated by the
provider, regardless of wheiher the provider is authorized to engage in
eCommerce in the Philippines;

Ride-hailing service partner refers to third parties who offer their services to
transport or deliver food, parcels, or any other item, on behalf of ride-hailing service
providers; and

. Ride-hailing service provider refers to those, who in the ordinary course of trade or

business, provide for or facilitate ride-hailing services.

SEC. 4. Scope and Coverage. - Unless otherwise specified, this Act shall apply to any
stage of all business-to-business and business-to-consumer eCommerce and internet
transactions including those related to the following activities:

paosD

Internet retail of consumer goods and services;

. Online travel services
. Online media providers;
. Ride-hailing services; and
._ Digital financial services.

Consumer-to-consumer transactions shall be exempt from the operation of this

Act, without prejudice to the application of other laws

Unless expressly specified, nothing in this Act shall be construed as to diminish or

deprive the regulatory jurisdiction conferred by law upon other goverment agencies with
respect to regulated services that fall within the scope of eCommerce

SEC. 5, Extra-territorial Application. - A person engaging in eCommerce who

purposefully avails of the Philippine market shall be deemed as doing business in the
Philippines and be subject to applicable Philippine !aws and regulations, including this
Act. One who purposely avails of the Philippine market without establishing any real or


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legal presence in the Philippines shall be required to notify the eCommerce Bureau
created under Section 7 of this Act for inclusion in the Registry of Online Business
established under Section 11 of this Act or may designate a resident agent who shail be
authorized to receive on their behalf notices or processes in any legal proceeding in the
Philippines. The accessibility of goods and services to consumers in the Philippines shall
be considered in ascertaining whether one engaged in eCommerce is purposefully
availing the Philippine market.

SEC. 6. Equal Treatment of Online and Offline Commercial Activities. - Unless
otherwise specified, this Act shall be construed to ensure that those who engage in
eCommerce may not enjoy any benefit that is more favorable, nor be placed at a
disadvantage, in relation to other enterprises that offer goods and services offline in the
Philippines.

CHAPTER 2
ECOMMERCE BUREAU

SEC. 7. Creation of the eCommerce Bureau. - To ensure the attainment of the
objectives of this Act and promote the growth of eCommerce, there is hereby created an
eCommerce Bureau under the Department of Trade and Industry (DTI), hereinafter
referred to as the Bureau, which shall be organized within six (6) months after the
effectivity of this Act. The Bureau shall have the following powers and functions:

a. Implement, monitor, and ensure strict compliance by eCommerce stakeholders
with the provisions of this Act,

b. Build trust between consumers and sellers by requiring eCommerce platform
operators, online merchants, or any other entity who engages in eCommerce to
register their business with the Bureau;

¢. Formulate policies, plans and programs to ensure the robust and dynamic
development of eCommerce;

d, Identify regulatory gaps affecting the eCommerce sector that are not sufficiently
addressed by this Act or by existing laws or regulations, and recommend
appropriate executive or legislative measures, including those that can be
undertaken by the DTI on its own, that foster the growth of the sector;

e. Actas a virtual central unit tasked to receive and address consumer complaints on
internet transactions, facilitate the speedy resolution of consumer complaints by
the respective government agency which has jurisdiction over it, and track


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complaints referred to or initiated by it to ensure the speedy and appropriate action
by the agency to which such matters have been referred to;

f. Coordinate with, compel or petition whenever appropriate, any entity, government
agency or instrumentality to take action on any matter that may impede
eCommerce;

g. Investigate, motu proprio, and file the appropriate cases for violations of any
provision of this Act;

h. Intervene or participate, in a manner as may be appropriate, in cases initiated or
pending with other regulatory agencies involving eCommerce or violations of any
provision of this Act;

i. Monitor internet transactions and undertake consultation with stakeholders and
affected agencies for the purpose of understanding market behavior in order to
update policies relevant to online transactions;

j. Monitor the compliance of other government agencies or instrumentalities on their
compliance to the provisions of this Act and the eCommerce roadmap;

k. Collect, compile, analyze, abstract, and publish eCommerce data for policy
formulation and program development;

|, Prepare and conduct periodic studies on eCommerce;

m. Collaborate with departments of the National Government including local
government units and government-owned or controlled corporations _in
implementing programs to promote eCommerce, including information, education,
and campaign, as well as in ensuring a policy regime that is proactive; and

n. Ensure that those who engage in eCommerce may not enjoy any benefit that is
more favorable, nor be placed at a disadvantage, in relation to other enterprises
that offer goods and services offline in the Philippines.

In the exercise of the above-stated functions, the Bureau, in coordination with other
government agencies, may convene public consultations or inter-agency meetings to
ensure multistakeholder input in the development of eCommerce policies.

Government agencies and instrumentalities involved in the maintenance and
development of the internet infrastructure of the Philippines, such as the Department of
Information and Communications Technology (DICT) and the National


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Telecommunications Commission (NTC), shall cooperate with the Bureau on issues
within their respective regulatory jurisdiction that affect the conduct of eCommerce.

SEC. 8. Composition of the Bureau. - The Bureau shall be headed by a Director
to be appointed by the President of the Philippines, as recommended by the Secretary of
Trade and industry.

The Director shall oversee the day-to-day operations of the Bureau and shall be
assisted by three (3) Assistant Directors each for policy and administration, enforcement,
and operations.

The Secretary of Trade and Industry shall determine the organizational structure
and staffing pattern of the Bureau, subject to the approval of the Secretary of Budget and
Management

SEC. 9. Subpoena. - In the exercise of its powers under this Act, the Director of
the Bureau shall have the power to issue summons, subpoena ad testificandum and
subpoena duces tecum to alleged violators or witnesses to compel their attendance and
the production of documents in investigations or proceedings before the Bureau

The failure to comply with a subpoena ad testificandum or subpoena duces tecum
shall authorize the filing of a case for indirect contempt under the Rules of Court with the
Regional Trial Court.

A certification duly issued by the Bureau that a respondent to the subpoena ad
testificandum or subpoena duces tecum refuses to comply with the same, despite due
notice, shail be sufficient evidence to authorize the Regional Trial Court to cite the
respondent with contempt. The Regional Trial Court shall likewise have the authority to
issue any such order or relief, including imprisonment, in order to compel compliance with
the subpoena ad testificandum or subpoena duces tecum. The Regional Trial Court may,
in addition, also issue a subpoena ad testificandum ot subpoena duces tecum addressed
to the respondents identical to the one subject of the complaint.

SEC. 10. Authority to Promulgate Rules and Regulations. - As the focal
authority of the National Government for the development of policies and strategies
towards the growth of eCommerce, the Bureau shall have the authority to promulgate
rules and regulations covering areas or activities concerning eCommerce and to impose
fines to compel compliance with such rules.


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The grant of this rule-making authority to the Bureau shall be ancillary to any duly
constituted regulatory jurisdiction granted or that may be granted to other government
agencies by law, including Executive Order No. 292, series of 1987, instituting the
"Administrative Code of 1987", Republic Act No. 7394, otherwise known as the
“Consumer Act of the Philippines", Republic Act No. 7653, as amended, otherwise known
as "The New Central Bank Act", Republic Act No. 8293, as amended, otherwise known
as the “Intellectual Property Code of the Philippines", Republic Act No. 8799, otherwise
known as the "Securities Regulation Code", Republic Act No. 9239, otherwise known as
the “Optical Media Act of 2003", Republic Act No. 9593, otherwise known as the "Tourism
Act of 2009", Republic Act No. 10173, otherwise known as the "Data Privacy Act of
2012", Republic Act No. 10667, otherwise known as the "Philippine Competition Act",
Republic Act No. 11127, otherwise known as" The National Payment Systems Act", and
Republic Act No. 11232, otherwise known as the "Revised Corporation Code".

The Bureau shall defer the exercise of rule-making power to the above-listed
government agencies conferred by law with regulatory jurisdictions over eCommerce
providers or platforms unless the other agency declines to exercise its jurisdiction or does
not act within a timely manner.

SEC. 11. Registry of Online Business (ROB). - Within a period of one (1) year
from the effectivity of this Act, the Bureau shall, in coordination with the DICT, establish,
manage and maintain a ROB which shall provide consumers access to data and
information of registered online business entities for purposes of verifying the validity,
existence of and other relevant information pertaining to business entities.

The DICT, in consultation with the DTI, the National Privacy Commission (NPC),
the Philippine Competition Commission (PCC) and other concerned agencies, shall issue
the rules and regulations to govern the development, management, operation, and
maintenance of the ROB.

CHAPTER 3
SUPERVISION OF ECOMMERCE

SEC. 12. Authority to Issue Take Down Order. - The Secretary of Trade and
industry, upon due notice and hearing regarding violations of this Act, the Consumer Act
of the Philippines, or any other related trade or consumer laws, operating to the grave
and irreparable prejudice of a consumer or a rights holder, shall have the power to issue
an order directing that a website, webpage, online application, social media account, or
other similar platform, be taken down, made inaccessible in the Philippines, or that no


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entity shall process any payment to any of those entities, or otherwise be rendered
commercially inoperative, in order to abate any further violations.

The said provisional takedown order shall be directed against the owner or
operator of the website, webpage, online application, social media account, as well as
duly registered internet service provider, as well as payment gateways or channels.
Copies of the order shall likewise be served on other government agencies whose
cooperation would be required for the enforcement of the same.

The order shail remain in effect for a maximum period of thirty (30) days unless
otherwise extended or made permanent by a judicial order or decision.

SEC, 13. Cease and Desist Order. - The Secretary of Trade and Industry, upon
due notice and hearing, shall have the power to issue an order directing a website,
webpage, online application, social media account, or other similar platform operating to
the grave and irreparable prejudice of a consumer or a rights holder, to desist from
marketing or offering goods or services that are accessible in the Philippines, and
directing that no payments shall be made to any entity which is marketing or offering such
goods or services in violation of this Act, the Consumer Act of the Philippines, or any other
related trade or consumer laws.

The cease-and-desist order shall remain in effect for a maximum of thirty (30) days
unless otherwise extended or made permanent by a judicial order or decision.

SEC. 14. Referral of Complaints. - The Bureau shall refer any complaint it
receives involving violation of other laws committed in the course of eCommerce activities
to the appropriate regulatory authority for action. If the complaint or violation pertains to
the violation of the provisions of Republic Act No. 10175, otherwise known as the
"Cybercrime Prevention Act of 2012", the matter shall be referred to the Department of
Justice (DOd) for appropriate investigation. In cases where appropriate, the DTI may itself
initiate the formal complaint with the appropriate regulatory authority or the DOJ. The
Bureau shall track any such complaint or referral made to other authorities and coordinate
with them to ensure that the said matters are duly resolved within a reasonable period

SEC. 15. Qualifications to Engage in eCommerce. - The following are presumed
legally authorized to engage in eCommerce in the Philippines in the ordinary course of
their trade or business:


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a. An individual who is duly licensed to do business as a single proprietor with the
DTI;

b. A juridical entity that is duly registered with the Securities and Exchange
Commission (SEC), whether as a corporation, a one-person corporation, or as a
partnership;

c. A cooperative that is duly licensed by the Cooperative Development Authority
(CDA);

d. A foreign corporation that is duly licensed by the SEC to transact business in the
Philippines; and

e. Anon-resident foreign individual or juridical entity who has complied with Section
5 of this Act.

A resident of the Philippines who engages, abets, or aids in unauthorized
eCommerce activities in the ordinary course of trade or business shall be subject to any
appropriate penalty as may be provided by law and shail in the same manner as the parly
engaged in such unauthorized eCommerce activities.

A person who is authorized to engage in eCommerce in the Philippines and who
facilitates the sale of a digital product or service by one who is not so authorized is
deemed primarily liable for any obligation, damage, or fine, that may arise from the
transaction or from the digital product.

A non-resident of the Philippines who engages in eCommerce by purposefully
availing of the Philippine market may not evade legal liability in the Philippines by virtue
of non-residency or non-registration, and shall be subject to the same obligations and
liabilities arising from any transaction as those who are authorized to engage in
eCommerce in the Philippines.

SEC. 16. Business Registration. -

a. To encourage the formation of business enterprises, the growth and integrated
development of the eCommerce market, and protection of online consumers, all
individuals engaged in eCommerce shall register as a business either as a sole
proprietor, one-person corporation, partnership, corporation, or cooperatives.

b. Consistent with Republic Act No. 11032, otherwise known as the "Ease of Doing
Business and Efficient Government Service Delivery Act of 2018," all national
government agencies and focal government units (LGUs) shail make availabie



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ontine registration of business permits and licenses, particularly for those engaged
in eCommerce.

c. The SEC, LGUs, and the CDA shall submit to the Bureau an annual list of
registered enterprises for monitoring and for purposes of maintaining a database
of online merchants and eCommerce platform operators.

CHAPTER 4
CONSUMER RIGHTS AND OBLIGATIONS
INVOLVING INTERNET TRANSACTIONS

SEC. 17 Code of Conduct. - To build trust in internet transactions and to protect

and uphold the interest of consumers at all times, all businesses engaged in eCommerce
are expected to act responsibly, consistent with the following principles:

a. Consumers shall be treated with honesty, integrity, and faimess at all times;
b. The rights of consumers shall be applied equally;

c. Business entities shall refrain from engaging in illegal, fraudulent, unethical, or
unfair business practices that harm consumers and shal! comply with applicable
laws and regulations, especially the protection of intellectual property rights;

d. Accurate information about goods and services marketed and sold online to
Philippine consumers shall be given and made available to consumers;

e. Goods and services sold online must conform to Philippine regulatory standards;

f The safety of goods and services marketed or sold online must not be
compromised and products that have been recalled in the offline retail market must
not be marketed or sold online;

g. Goods and services must be easily accessible, accurately described, and
promoted through fair advertising and marketing practices;

h. Consumers must be given the correct and complete information about costs
through a sales invoice or an official receipt detailing the particular costs of the
good or service purchased, including shipping or delivery charges. Hidden charges
or additional costs such as customs duties or currency conversion charges must
be avoided;

i. The tracking of deliveries must be provided as part of services of online merchants
or eCommerce platform operators and goods purchased must be delivered within


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the promised time and in described condition to the address provided by the
consumer,

A cancellation option must be provided wherein consumers are given the
opportunity to review their online purchases before finally confirming their
purchase or withdrawing from a — confirmed transaction in appropriate
circumstances;

Consumer complaints must be dealt with through fair, easy, transparent, and
equitable mechanisms for consumer redress. If warranted, compensation, refund,
repair, and replacement should be provided to the consumer;

Data privacy laws and regulations, including Republic Act No. 10173, otherwise
known as the "Data Privacy Act of 2012," and other similar laws and regulations
shall be strictly complied with;

The safety and security of online payments and sensitive data shall be
safeguarded through the use of secure technology and protocols including those
evidenced by visible trust certificates or any appropriate similar certification as may
emerge in the future;

The transmission of unsolicited commercial email or bulk email, except those
subject to the control and discretion of the consumer through readily accessible
configurations that allow the consumer to choose whether they wish to receive or
opt-out from commercial messages by email or electronic means, must be
avoided

. The production of fake online reviews or spreading of wrong information about

competitors is improper and must be avoided;

. Consumers must be educated about the risks of transacting through the internet

and shall be provided competent and professional advice; and

. Competing fairly with other businesses and adherence to competition principles

and all applicable competition laws and regulations, including Republic Act
No.10867, otherwise known as the "Philippine Competition Act”, shall ensure the
robust development of eCommerce and the economy.

Whenever appropriate, the DTI shall issue rules and regulations corresponding to

international trends, developments, and best practices that it may adopt and implement.

SEC. 18. Obligations of eCommerce Platform Operators. - eCommerce

platform operators shall have the following obligations:


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1. Ensure that any commercial communication shall:

. Be clearly identifiable as a commercial communication;

. Clearly identify the person on whose behalf the commercial

communication is made;

. Clearly identify any promotional offer including any discount, premium, or

gift, and ensure that any condition which must be met to qualify for itis easily
accessible, and presented clearly and unambiguously; and

|. Clearly identify any promotional competition or game and ensure that any

condition for participation is easily accessible and presented clearly and
unambiguously

2. Require all online merchants, prior to the commencement of online transactions to
submit the following to eCommerce platform operators:

a

b.

Name of the oniine merchant;

Registration documents of the online merchant from the appropriate LGU,
the DTI or SEC, and the Bureau of Internal Revenue (BIR);

. Geographic address at which the online merchant may be served the

summons or any other judicial processes in its name and behalf,

|. Contact details of the online merchant, such as a mobile or landline number,

and a valid electronic mail address, which makes it possible to immediately
and easily contact and communicate with the online merchant in a direct
and effective manner; and

Details of any professional body or similar institution with which the online
merchant is registered, in instances when the online merchant exercises a
regulated profession.

3. Maintain a file of all online merchants registered under their platform containing
the information provided by online merchants in paragraph (b) of this Section;

4. Publish at a conspicuous part on their website, webpage, social media account, or
other similar platforms, the following general information

a

b.

Name of the online merchant;

Registration documents of the online merchant from the appropriate LGU,
the DTI or SEC, and the BIR;


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c. Geographic address at which the online merchant may be served summons
or any other judicial processes in its name and behalf,

d. Contact details of the online merchant, a mobile or landline number, or a
valid electronic mai! address, which makes it possible to immediately and
easily contact and communicate with the online merchant and
communicate in a direct and effective manner, unless the eCommerce
online platform establishes means to facilitate communication between
online merchants and consumers; and

e. Details of any professional body or similar institution with which the online
merchant is registered, in instances when the online merchant exercises a
regulated profession

5. Submit to the Bureau a list of all online merchants registered under their platform.
When an eCommerce platform operator discovers that an onboarded online
merchant has not obtained registration documents from the relevant regulatory
agency, it shall report such fact to the Bureau within fifteen (15) days from
discovery thereof: and

6. Cooperate with regulators, in accordance with existing laws and regulations, in any
investigation, or resolution of consumer complaints.

SEC. 19. Internet Transactions Involving Consumers. - An online merchant of
goods shall exercise the following responsibilities:

1. Deliver or cause the delivery of goods to the consumer, ensuring that the following
are complied with:

a. The goods are of the description, type, quantity, and quality, and possess
the functionality, compatibility, interoperability and other features, as
required by the sales contract. The online merchant must show a digital
sample or model of the goods to the consumer and the goods possess the
quality of and correspond to the description of the sample or model; possess
the qualities and performance features, including in relation to functionality,
compatbility, interoperability, accessibility, continuity, and security, normal
for digital content or digital services of the same type and of which the
consumer may reasonably expect; fit for any particular purpose for which
the consumer requires them and which the consumer made known to the
online merchant at the time of the conclusion of the contract, and which the
online merchant has accepted; and possess the qualities and performance
capabilities indicated in any pre-contractual statement which forms an
integral part of the contract.


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b. All goods shall

i. Be delivered along with the accessories including packaging,
installation instructions or other instruction as the consumer may
expect to receive; and

ji, Possess qualities and performance capabilities which are normal in
goods of the same type and which the consumer may expect given
the nature of the goods and taking into account any public statement
made by or on behalf of the online merchant or other persons in
earlier links of the chain of transactions, including the producer,
unless the online merchant shows that: the online merchant was not,
and could not reasonably have been aware of the statement in
question; by the time of conclusion of the contract, the statement had
been corrected; or the decision to buy the goods could not have been
influenced by the statement.

2. Be liable for any lack of conformity with the contract which exists at the time when:

a. The consumer or a person acting on behalf of the consumer has acquired
the physical possession of the goods, or when the goods are handed over
to the carrier chosen by the consumer, and that carrier was not proffered by
the online merchant or where the online merchant proposes no means of
carriage;

b. The goods have been installed by the online merchant or under the online
merchant's responsibility. The time at which the installation has been
completed shall be considered the time when the consumer acquires
physical possession of the goods;

c. The goods have been installed by the consumer in accordance with the
online merchant's installation instructions. The expiration of a reasonable
period for installation, which shai! not be more than thirty (30) days, shail be
considered the time when the consumer acquires the physical
possession of the goods;

d. The goods are incorrectly installed. Any lack of conformity resulting from the
correct installation is regarded as lack of conformity with the contract of the

goods if

i. The goods were installed by the online merchant or under the
online merchant's responsibility; and


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ji. The goods, intended to be installed by the consumer, were installed
by the consumer and the correct installation was due to a
shortcoming in the installation instructions.

3. Where the contract provides that the digital content or digital service is to be
supplied or made accessible to the consumer over a period of time, the online
merchant may modify the digital content or digital service beyond what is
Necessary to maintain the digital content or digital service in conformity with the
contract, if the following conditions are met:

a.

b.

Gs

The contract allows, and provides a valid reason for, such a modification;
Such a modification is made without additional cost to the consumer, and

The consumer is informed in a clear and comprehensible manner of the
modification.

4. Where the online merchant operates its own website, webpage, social media
account, or any other similar platform, it shall publish on its homepage the

following:

a. Name of the online merchant:

b. Registration documents of the online the appropriate LGU, the DTI or SEC,
the BIR, and other appropriate regulatory authorities;

. Geographic address at which the online merchant may be served summons
or any other judicial processes in its name and behalf;

d. Contact details of the online merchant, a mobile or landline number, and a
valid electronic mail address, which makes it possible to immediately and
easily contact and communicate with the online merchant and
communicate in a direct and effective manner; and

€. Details of any professional body or similar institution with which the online

merchant is registered, in instances when the online merchant exercises a
regulated profession,

Any agreement is valid only if, at the time of the conclusion of the contract, the
consumer has knowledge of the specific condition of the goods and the consumer has
expressly accepted this specific condition when concluding the contract.

SEC. 20. Right to Redress by Online Merchants. - Where the online merchant
is liable to the consumer because of a lack of conformity with the contract resulting from
an act or omission by a person in earlier links of the chain of transactions, the online


1 merchant is entitled to pursue remedies against the person or persons liable in the chain
2 of transactions.

3 The person against whom the online merchant may pursue remedies and the
4 relevant actions and conditions to exercise must be in accordance with the following:
5
6 a. Repairs must be completed, and replacements delivered within a reasonable time
7 and without any significant inconvenience to the consumer, taking into account the
8 nature of the goods and the purpose for which the consumer acquired the goods;
9 b. A proportionate reduction of the price or the termination of the contract, including
10 restitution of the price, in the following instances:
"1 i. Arepair or replacement is impossible or unlawful;
12 ii. The online merchant has not completed repair or replacement within a
13 reasonable time;
14 iii. A repair or replacement may cause significant inconvenience to the
16 consumer; or
16 iv. The online merchant has declared, or it is equally clear from the
17 circumstances that the online merchant may not deliver the goods in
18 conformity with the contract within a reasonable time.
19 c. The consumer is entitled to withhold the payment of any outstanding part of the
20 price, until the online merchant has brought the goods into conformity with the
21 contract,
22 d. The consumer is not entitled to a remedy to the extent that the consumer has
23 contributed to the lack of conformity with the contract or its effects;
24 e. Where the online merchant remedies the lack of conformity with the contract by
25 replacement, the online merchant may take back the replaced goods at the online
26 merchant's expense unless the parties have agreed otherwise after the lack of
27 conformity with the contract has been brought to the online merchant's attention
28 by the consumer;
29 f. Where the consumer had installed the goods in a manner consistent with their
30 nature and purpose, before the lack of conformity with the contract became
31 apparent, the cost for the removal of the non-conforming goods and the installation
32 of replacement goods, and all associated costs shall be for the account of the

33 online merchant;


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g. In case of goods that do not conform to the contract, the consumer is not liable to
pay for using the non-conforming goods prior to its replacement;

h. The consumer may choose between repair and replacement unless the option
chosen is impossible, unlawful or, imposes costs upon the online merchant that is
disproportionate, taking into account all circumstances, including

The value of the goods, if the goods conformed to the contract;
The significance of the lack of conformity with the contract; and

Whether the alternative remedy may be completed without significant
inconvenience to the consumer.

The reduction of price should be proportionate to the decrease in the value of the
goods which were received by the consumer compared to the value of the goods if it were
in conformity with the contract

SEC. 21. Obligations of Ride-Hailing Service Providers. - Ride hailing service
providers shall require its consumers to register by showing valid proof of identity, email
address or cellular phone number. Ride-hailing service providers shall make the identity
of its providers and support staff available to the rider at all times.

SEC. 22. Obligations of Consumers of Ride Hailing Services. - It shall be
unlawful for consumers of ride hailing services to:

1. Cancel confirmed orders for the delivery of food or grocery items when the said
items have already been paid by or is already in the possession of the Ride Hailing
Service Partner or is otherwise in transit to the consumer unless:

a. The consumer uses credit card services as a means for the payment of the
service and the payment will still be credited notwithstanding the
cancellation;

b. The consumer remits the reimbursement and payment to the ride-hailing
service partner as a pre-condition for the cancellation of the order; or

c. The delivery of ordered food or grocery items will be or was delayed for at
least one (1) hour from the expected time of arrival due to the fault or
negligence of the ride-hailing service partner.

2. Unreasonably shame, demean, embarrass, or humiliate ride-hailing service
partners. The consumer may invoke as a defense of good faith, a well-founded


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belief that the ride-hailing service partner had committed a crime or caused civil
injury towards the consumer.

SEC. 23. Right to Terminate the Contract - If the goods delivered do not conform
to the contract, the consumer may exercise the right to terminate the contract by giving
notice to the online merchant. Where the lack of conformity relates to only some of the
goods delivered under the contract, the consumer may terminate the contract only in
relation to the non-conforming good and any other goods which were acquired as an
accessory to it.

Where the consumer terminates a contract as a whole or in relation to some of the
goods delivered

1. The online merchant shall reimburse the consumer the price paid without undue
delay and in any event not later than fourteen (14) days from receipt of the notice;

2. Upon receipt of the reimbursement from the online merchant, the consumer shall
return, at the online merchant's expense, the goods without undue delay and in
any event not later than fourteen (14) days from the receipt of the reimbursement;

3. Where the goods cannot be returned because of destruction or loss caused by the
negligence of the consumer, the consumer shail pay to the online merchant the
monetary vaiue that the non-conforming goods would have had at the date when
the return was to be made if they had been kept by the consumer without
destruction or loss until that date, unless the destruction or loss has been caused
by a lack of conformity with the goods with the contract, within fourteen (14) days
from receipt of reimbursement; and

4. The consumer shall pay for a decrease in the value of the goods only to the extent
that the decrease in value exceeds depreciation through regular use. The payment
for decrease in value shall not exceed the price paid for the goods.

SEC. 24, Damages. - The online merchant is liable for damages to the consumer
due to the lack of conformity with the contract of the goods. The consumer may claim
damages within two (2) years from the relevant time of establishing conformity.

No damages may be recovered by virtue of this Act after the lapse of four (4) years
from the time the conformity has been established.


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SEC. 25. Online Dispute Resolution. - The DTI shall develop an online dispute
resolution (ODR) platform which is a single point of entry for consumers, online
merchants, and eCommerce platform operators seeking out-of-court resolution of
disputes. Where an eCommerce platform operator does not have an intemal dispute
resolution mechanism, ali complaints through an ODR against an eCommerce platform
operator shall be accompanied by proof that internal dispute resolutions were exhausted

4. The ODR shall be an interactive website which may be accessed electronically
and free of charge. The DTI, through the Bureau, shall be responsible for its
operation, including its maintenance, funding, and data security. The ODR platform
must be user-friendly and must adopt the twin principles of “privacy by design” and
“design for all", where the privacy of its users is respected, and the ODR platform
is accessible and usable by all users;

2. The DTI shall establish a network of ODR contact points from, among others, the
agencies involved in consumer complaints specified in Republic Act No, 7394,
otherwise known as the "Consumer Act of the Philippines,” which includes the Fair
Trade Enforcement Bureau (FTEB) of the DTI, the Department of Agriculture
(DA), the Department of Tourism (DOT), and the Department of Health (DOH). The
NPC and the Intellectual Property Office of the Philippines (IPOPHIL) shall also
form part of the ODR network

3. Each agency shall designate one ODR contact point and communicate its name
and contact details to the DTI. The head of agency shall confer responsibility to
the ODR contact points in ensuring that timely and competent support is provided
to the resolution of disputes relating to complaints submitted through the ODR
platform

4. The ODR platform shall have the following functions:

a. Provide an electronic form by means of which alternative dispute
resolution (ADR) entities shall transmit the information;

b. Provide a feedback system which allows the parties to express their views
on the functioning of the ODR platform and on the ADR entity which handles
their dispute; and

c. Make publicly available general information on ADR as a means of out-of
court dispute resolution and information on ADR entities which are
competent to deal with disputes.

5. The DTI shail ensure that the information in the website is accurate, up to date,
and provided in a clear, understandable, and accessible way. Government and


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private sector entities which provide ADR services that are competent to deal with
disputes shall be registered electronically with the ODR platform;

6. Digital platforms and online retailers shall provide on their websites an electronic
link to the DTI ODR platform on their homepage. That link shall be easily
accessible to consumers,

7. The DTI, in consultation with other concerned agencies, shall issue the
implementing rules and regulations on the development, management, operations,
and maintenance of the ODR platform.

SEC. 26. Limited Liability of eCommerce Platform Operators. -

4. eCommerce platform operators shall be solidarily liable with an online merchant to
the consumer only to the extent of civil damages suffered by the consumer as a
direct result of the transaction, without prejudice to liabilities that may incur under
the next succeeding paragraph or the provisions of other existing laws;

2. eCommerce platform operators shall, for civil or administrative indemnity, be held
liable with an online merchant only under the following instances:

a. Ifthe eCommerce platform operator fails to exercise ordinary diligence in
complying with its obligations under Section 18 hereof, resulting to loss or
damage to the consumer;

b. Ifthe identity of the online merchant and the eCommerce platform operator
are the same;

c. If the eCommerce platform operator fails, after notice, to act expeditiously
to remove, or disable access to goods or services appearing on their
platform that they know or should have known the provisions to be not
compliant with law, or otherwise infringes on intellectual property rights;

d. If the eCommerce platform operator permits an online merchant, not
otherwise authorized to do business in the Philippines, to offer its goods
and services for sale, resulting in loss or damage to the consumer.

3. eCommerce platform operators shall not be held liable under the following
instances:

a. The eCommerce platform operator relied on the accuracy, authenticity, and
veracity of an online merchant's representations, warranties or submitted
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proved to be inaccurate, false or untrue: Provided, That, the eCommerce
platform operators are able to show evidence of good faith and that
reasonable effort were exerted to ascertain the accuracy and reliability of
the documents or information submitted by such online merchant;

b. The eCommerce piatform operators relied on the representations,
warranties or submissions of an online merchant stating that it is duly
organized, valid and existing under the laws of the Philippines or under the
laws of its respective jurisdictions to engage in eCommerce, or has obtained
all necessary licenses, permits or approvals required for the sale of goods
and services, or that said goods and services conform to applicable laws,
rules and regulations.

SEC. 27. Digital Payments. - ECommerce platform operators and online
merchants shall issue the appropriate paper or electronic invoices or receipts for all sales
in accordance witH relevant internal revenue laws and regulations. An electronic invoice
or receipt shall have the same legal effect as a physical invoice or receipt.

The DTI, through the Bureau, shall, in coordination with the Bangko Sentral ng
Pilipinas (BSP), the BIR, the Bureau of Customs (BOC), the DOy, the Philippine National
Police, the DICT, and the NTC, issue rules and regulations to modernize and streamline
the regulatory framework and encourage the adoption of electronic payment systems by
the citizenry. The DTI shall also develop guidelines to protect merchants and consumers
covering the various digital payment solutions.

SEC. 28. Enforcement of Rights and Remedies. - Without prejudice to existing
remedies provided under other laws, the enforcement of the rights and remedies
established under this Chapter shail be through the following means.

1. If involving complaints by a consumer where no damages are sought, the
complaint shall be treated as a consumer complaint with the DTI pursuant to Title
V, Chapter III of Republic Act No. 7394, otherwise known as the "Consumer Act of
the Philippines”;

2. If involving a claim for damages, the injured party shall seek recovery by filing a
civil action with the appropriate trial court.


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CHAPTER 5
ELECTRONIC COMMERCE PHILIPPINE TRUSTMARK

SEC. 29. Commerce Philippine Trustmark. - To provide assurance of safety and
security in internet transactions, the DTI shall lead the development of an eCommerce
Philippine Trustmark hereinafter referred to as the "Trustmark", which may be established
and operated by an industry-led private sector governance body. The DTI shall
periodically assess the effectiveness of the industry-led Trustmark in promoting to the
public reliable and trustworthy eCommerce services and may opt to assume operational
control over the Trustmark if it determines that the industry-led private sector effort cannot
sufficiently achieve the goals of the Trustmark.

CHAPTER 6
FINAL PROVISIONS

SEC. 30. Penalties. -

a. Online merchants who fail to register either as a sole proprietor, one-person
corporation, partnership, corporation, or cooperative, shall be punished with a fine
equivalent to one hundred percent (100%) of the amount of the digital goods
offered or sold based on the market price as determined by the Bureau, including
confiscation of the goods as advertised;

b. eCommerce platform operators and online merchants found guilty of violating
Section 18, or Section 19 (d) of this Act shall be punished with a fine not less than
Five hundred thousand pesos (Php 500,000.00) but not more than Five million
pesos (Php 5,000,000.00) or the revocation of their licenses, or both, at the
discretion of the courts;

c. Ride hailing service providers found guilty of violating Section 21 of this Act shall
be punished with a fine of up to Five hundred thousand pesos (Php 500,000.00)
or the revocation of their licenses, or both, at the discretion of the courts;

d. Consumers found guilty of violating Section 22 (a) of this Act shall be punished
with a fine of up to Fifty thousand pesos (Php 50,000.00) plus one hundred percent
(100%) of the amount advanced by the ride hailing service partner, or both, at the
discretion of the courts; and


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e. Consumers found guilty of violating Section 22 (b) and Section 23 (b) of this Act
shall be punished with a fine of up to Fifty thousand pesos (Php 50,000.00), at the
discretion of the courts.

The application of these penalties shail be without prejudice to the liability of the
offending party under other laws or regulations.

SEC. 31. Oversight Committee. - There is hereby created a Congressional
Oversight Committee, hereinafter referred to as the Internet Transactions Act
Congressional Oversight Committee, to be composed of five (5) members from the
Senate, which shall include the Chairpersons of the Senate Committees on Trade,
Commerce, and Entrepreneurship, Science and Technology, and Finance, and five (5)
members from the House of Represeniatives, which shall include the Chairpersons of the
House of Representatives Committees on Trade and Industry, ICT, and Appropriations.
The Internet Transactions Act Congressional Oversight Committee shall be jointly chaired
by the Chairpersons of the Senate Committee on Trade and Commerce and the House
of Representatives Committee on Trade and Industry. It shall meet at least every quarter
of the first two years and every semester for the third year after the approval of this Act
to review the implementation of this Act, evaluate the Bureau on its functions as the
lead agency, determine any inherent weaknesses in the law, and recommend the
necessary remedial legisiation or executive measures: Provided, That the Internet
Transactions Act Congressional Oversight Committee shall cease to exist after five (5)
years upon the effectivity of this Act.

The Secretariat of the Intemet Transactions Act Congressional Oversight
Committee shall be drawn from the existing personnel of the Senate and House of
Representatives Committees comprising the Internet Transactions Act Congressional
Oversight Committee.

SEC. 32. Implementing Rules and Regulations. - The Secretary of Trade and
industry shall, in consultation with the DICT, the BSP, the DOT, the Land Transportation
Franchising and Regulatory Board (LTFRB), the Optical Media Board (OMB), the
IPOPHIL, and other relevant government agencies and stakeholders, develop and issue
the implementing rules and regulations of this Act.

SEC. 33. Transitory Provisions. - To ensure the continued implementation of
programs to promote eCommerce, the current eCommerce Division shall continue to
exercise its functions until such time that the organizational structure and personnel of
the Bureau have been determined and approved.


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All affected officers and personnel of the eCommerce Division shall be absorbed
by the Bureau without demotion in rank or diminution of salaries, benefits, and other
privileges.

SEC. 34. Appropriations. -The amount necessary to carry out the provisions of
this Act shall be included in the annual General Appropriations Act.

SEC. 35. Separability Clause. - Any portion or provision of this Act that is declared
unconstitutional shall not have the effect of nullifying other portions o° provisions hereof
as long as such remaining portions can still subsist and be given effect in their entirety.

SEC. 36. Repealing Clause. - All laws, ordinances, rules, regulations, other
issuances or parts thereof, which are inconsistent with this Act, are hereby repealed or
modified accordingly.

SEC. 37. Effectivity. - This Act shall take effect after fifteen (15) days
following its publication in the official Gazette or in a newspaper of general circulation

Approved,