HW
NINETEENTH CONGRESS ) w i
REPUBLIC OF THE PHILIPPINES | a

First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B, Rodriquez

House Bill No. 3011

EXPLANATORY NOTE
In today’s very modem and connected world, the internet plays a very big role in our lives,
Almost everything can be done online from transferring funds, watching the news and movies,
playing games, ordering food, and buying almost everything we need. The internet has
changed the way business is conducted and transacted
The convenience of eCommerce has made it very attractive. This convenience, both for the
seller and the consumer, and the other benefits of eCommerce was made more evident during
the pandemic. Because of lockdowns, people turned to eCommerce.

However, it cannot be denied that there are still issues that hound the eCommerce industry
and many still are hesitant because of trust issues

This bill seeks to address these issues and make eCommerce here in the country efficient,
reliable, and secure.

tn view of the foregoing, immediate approval of this measure is earnestly requested.

rl lifes


NINETEENTH CONGRESS
REPUBLIC OF THE PHILIPPINES
First Regular Session

HOUSE OF REPRESENTATIVES

Introduced by Representative Rufus B. Rodriguez _

3011

House Bill No.

AN ACT
PROVIDING PROTECTION TO CONSUMERS AND MERCHANTS ENGAGED IN
INTERNET TRANSACTIONS, CREATING FOR 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 md utmost efficiency to encourage the creation of new products,
services, business models and processes. Towards these ends, the State shall 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

SEC 3. Definition of terms. — As used in this Act:

(a) Business to business transaction refers to internet transactions conducted over

marketplaces that facilitate business to business electronic sales of new and used
merchandise using the internet:

(b) 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;

(c) 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;

(d) 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;

(e) 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;


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

(g) Digital service refers to a service that allows 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;

(h) 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;

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

(Gj) 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 inciude social media websites and any other similar platforms
in so far that it is used for business:

(k) Functionality refers to the ability of the digital content or digital service to perform its
functions according to its purpose;

(1). Goods refer 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;

(m) Internet access and service provider refer to an entity that provides households,
businesses, and government access to the internet through the physical transport
infrastructure;

(n) 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;

(0) 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 intemet but the payment and ultimate delivery of
the goods or service may be conducted on or offline,

{p) 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;

(q) Online merchant refers to a 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 internet,
through a website, an online marketplace, a social media website or application or
through other similar means;

(r) 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;

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

(t) 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;

(u) 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;

(v) Repair refers to bringing defective goods into conformity with the contract;

(w) 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 whether the provider is authorized to engage in eCommerce in
the Philippines;

(X) 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;

(y) Ride hailing service provider refers to those, who in the ordinary course of trade or
business, provide for or facilitate ride hailing services; and

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:

(a) Internet retail of consumer goods and services;

(b) Online travel services;

(c) Oniine media providers;

(a) Ride hailing services; and

(e) 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 government 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 laws and regulations, including this Act. One who purposely
avails of the Philippine market without establishing any real or legat 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 shall 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
nat 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 of 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:

(c) 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 fosters the growth of the sector,

(e) Act as a virtual at 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 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;

() 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;

(@ 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;

(1) Prepare and conduct periodic studies on eCommerce;

(m) Collaborate with departments of the National Government including focal
government units and government-owned orcontrolled 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
multi-stakeholder 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 Telecommunications
Commission (NTC), shall cooperate with the Bureau on issues within their respective
regulatory jurisdiction that effect 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 shail
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, shall 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 oF relief, including imprisonment, in order to compet compliance with the subpoena ad
testificandum or subpoena duces tecum. The Regional Trial Court may, in addition, also issue
a subpoena ad testificandum or 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 of activities concerning eCommerce and to impose fines to compel compliance with
such rules. The grant of this rule-making authority to the Bure au 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. 10867, 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 Nationa! 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 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 take down 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 shall 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 (DOJ) for appropriate
investigation. In cases where appropriate, the DTI may itself initiate the formal complaint with
the appropriate regulatory authority or the DOE. The Bureau shail 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:
(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 partnership;
(c) A cooperative that is duly licensed by the Cooperative Development Authority (CDA);


(a) A foreign corporation that is duly licensed by the SEC to transact business in the
Philippines; and

(e) A non-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 shall in the same manner as the party 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
local government units (LGU s) shall make available online registration of business permits
arid licenses particularly for those engaged in eCommerce.

(c) The SEC, LGUs, and the CDA shail submit to the Bureau an annual 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 respohsibly, 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 shall comply with applicable laws and
regulations, especially the protection of intellectual property rights;

(a) 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 offiine retail market must not be marketed
or sold oniine;

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

(Ih) 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 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;

(is) 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:

(I) 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;

(m) The safety and security of online payments and sensitive data shail 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;

(n) The transmission of unsolicited commercial email or bulk email, except those subject
tothe 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;

(0) The production of fake online reviews or spreading wrong information about
competitors is improper and must be avoided:

(p) Consumers must be educated about the risks of transacting through the internet and
shall be provided competent and professional advice; and

(q) Competing fairly with other businesses and adherence to competition principles and
ail applicable competition laws and regulations, including Republic Act No. 10667,
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:
(a) Ensure that any commercial communication shall:

1. Be clearly identifiable as a commercial communication;

2. Clearly identify the person on whose behalf the commercial communication is
made;

3. Clearly identify any promotional offer including any discount, premium, or gift,
and ensure that any condition which must be met to qualify for it is easily
accessible, and presented clearly and unambiguously: and

4, Clearly identify any promotional competition or game and ensure that any
condition for participation is easily accessible and presented clearly and
unambiguously;

(b) Require all online merchants, prior to the commencement of online transactions to
submit the following to eCommerce platform operators:

1. Name of the online merchant;

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

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

4. Contact details of the online merchant, such as a mobile or landline number,
anda 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
5. 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;

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

(d) Publish at a conspicuous part on their website, webpage, social media account, or
other similar platform, the following general information:

1. Name of the online merchant;

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

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

4. Contact details of the online merchant, a mobile or landline number, or 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, unless the eCommerce online platform establishes
means to facilitate communication between online merchants and consumers;
and

5. 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;

{e) 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 agenoy, it shall
report such fact to the Bureau within fifteen (15) days from discovery thereof:

(f) 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:
(a) Deliver or cause the delivery of goods to the consumer, ensuring that the following are
complied with:

1. 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, compatibility,
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

2. 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

ii. 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.

(b) Be liabie for any lack of conformity with the contract which exists at the time when:

1, 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;

2. 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 shali be considered the time when the consumer acquires physical
possession of the goods;

3. 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 shall not be more than thirty (30) days, shall be considered
the time when the consumer acquires the physical possession of the goods.

4. 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

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

(c) 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

1. The contract allows, and provides a valid reason for, such a modification;

2. Such a modification is made without additional cost to the consumer; and

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

(d) 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:

1. Name of the online merchant;

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

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

4. 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

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

The person against whom the online merchant may pursue remedies and the relevant
actions and conditions to exercise must be in accordance with the following:

(a) Repairs must be completed and replacements delivered within a reasonable time and
without any significant inconvenience to the consumer, taking into account the nature
of the goods and the purpose for which the consumer acquired the goods;

(b) A proportionate reduction of the price or the termination of the contract, including
restitution of the price, in the following instances:

1. A repair or replacement is impossible or unlawful;

2. The online merchant has not completed repair or replacement within a
reasonable time;

3. Arepair or replacement may cause significant inconvenience to the consumer:
or

4. The online merchant has declared, or itis equally clear from the circumstances
that the online merchant may not deliver the goods in conformity with the
contract within a reasonable time;

(c) The consumer is entitled to withhold the payment of any outstanding part of the price,
until the oniine merchant has brought the goods into conformity with the contract;

(d) The consumer is not entitled to a remedy to the extent that the consumer has
contributed to the lack of conformity with the contract or its effects;

(e)Where the online merchant remedies the lack of conformity with the contract by
replacement, the online merchant may take back the repiaced goods at the online
merchant's expense unless the parties have agreed otherwise after the lack of
conformity with the contract has been brought to the online merchant's attention by the
‘consumer,

(f) Where the consumer had installed the goods in a manner consistent with their nature
and purpose, before the lack of conformity with the contract became apparent, the cost
for the removal of the non- conforming goods and the installation of replacement
‘goods, and ali associated costs shall be for the account of the online merchant:

(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;

(hh) The consumer may choose between repair and replacement unless the option chosen
is impossible, unlawful or, imposes costs upon the online merchant that is
<isproportionate, taking into account all circumstances, including:

1, The value of the goods, if the goods conformed to the contract;

2. The significance of the lack or conformity with the contract; and

3. 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:
(a) 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:

1. 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;

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

3. 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.

(b) Unreasonably shame, demean, embarrass, or humiliate ride hailing service partners.
The consumer may invoke as a defense of good faith, a well-founded 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 was acquired as an accessory to it

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

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

(b) 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;

(c) Where the goods cannot be returned because of destruction or loss can sed by the
negligence of the consumer, the consumer shall pay to the online merchant the
monetary value which the non-conforming goods would have had at the date when the
retum 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

(d) 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.

SEC 28. Online Dispute Resolution. - The DTI shall develop an oniine dispute resolution
(QDR) 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 internal dispute resolution mechanism, all
complaints through an ODR against an eCommerce platform operator shall be accompanied
by proof that internal dispute resolutions were exhausted.

(a) 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.



(b) 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 (POPHIL) shall also form part of the
ODR network

(c) Each agency shail 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
Tesolution of disputes relating to complaints submitted through the ODR platform.

(d) The ODR platform shall have the following functions:

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

2. 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

3. 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.

(e) The DTI shali ensure that the information in the website is accurate, up to date and
provided in a clear, understandable and accessible way.

(f) Government and private sector entities which provide ADR services which are
‘competent to deal with disputes shall be registered electronically with the ODR
platform

(g) 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.

(h) 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. —

(a) 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.

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

1. If the 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,

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

3. 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 to be not compliant with law, or otherwise
infringes on intellectual property rights;

4. Ifthe 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 to loss or damage to the consumer.

(c) eCommerce platform operators shall not be held liable under the following instances:

1. The eCommerce platform operator relied on the accuracy, authenticity, and
veracity of an online merchant's representations, warranties or submitted
registration documents, even if such information or documents are later proved


to be inaccurate, false or untrue: Provided, That, the eCommerce
platform operators are able to show evidence of good faith and that reasonable
efforts were exerted to ascertain the accuracy and reliability of the documents
or information submitted by such online merchant.

2. The eCommerce platform operator 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 piatform 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 shalt 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 DOE, the Philippine National Police, the
DICT, and the NTB, 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 shall be through the following means:

{a) If involving complaints by a consumer where no damages are sought, the compiaint
shall be treated as a consumer complaint with the DT! pursuant to Title V, Chapter Ill
of Republic Act No. 7394, otherwise known as the “Consumer Act of the Philippines”:

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

CHAPTER 5
ELECTRONIC COMMERCE PHILIPPINE TRUSTMARK

SEC 29, ECommerce 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 contro! 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. —

(2) Online merchants who fail to register either as 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.

(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 Fifly thousand pesos (PhP 50,000.00), at the discretion of the
courts.

The application of these penalties shall 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 Representatives,
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 legislation 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 _Intemet 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

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. — If any provision or part of this Act is declared invalid or
unconstitutional, such declaration shall not affect the validity of the remaining provisions of


this Act.

SEC 36, Repealing Clause — All laws, rules, and regulations, presidential decrees, letters of
instruction and other presidential issuances which are incompatible or inconsistent with the
Provisions of this Act are hereby repealed, amended, or modified accordingly.

SEC 37. Effectivity. — This Act shall take effect fifteen (16) days after its publication in the
Official Gazette or in at least one (1) newspaper of general circulation. It shall aiso be
Published online, through the Official Gazette Online (www. officialgazette.gov, ph), and on the
website of the DTI (www.dti. gov.ph).

Approved,