Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
Second Regular Session

7491

HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT PROTECTING CONSUMERS AND MERCHANTS ENGAGED IN INTERNET
TRANSACTIONS, CREATING FOR THE PURPOSE THE ECOMMERCE BUREAU
AND APPROPRIATING FUNDS THEREFOR

Despite the Philippines lagging behind our South East Asian neighbors in the use of
eCommerce, the COVID-19 pandemic has forced many of us to limit our movement and
rethink the way we do our purchases. eCommerce has grown leaps and bounds with
greater internet penetration and digitalization of the finance system.

Finance Online's Data And Share Market Analysis for 2020 reveals the following:

+ Itis estimated that around 35% of Google product searches are converted into
purchases within 5 days.

+ Around 51% of digital buyers conduct purchases via their smartphones.

+ Digital buyers are more likely to spend more if they are provided with free shipping.

+ Around 93% of online shoppers declared that the visual appearance of an online
store plays a key factor in their purchasing decisions.

«+ It is estimated that around 80% of online shoppers don't make purchases from
ecommerce sites that have problematic retum policies.

+ Itis estimated that 85% of all products purchased via social media platforms come
from Facebook.

The advantages are easy to see. eCommerce limits travel time and cost when the
customer no longer needs to travel long distances to reach their preferred physical store.
The same store can be visited virtually with just a few clicks. It also facilitates comparison
shopping.


ECommerce empowers customers with information that are ordinarily not available in
traditional retail. For example, the Intemet provides product information that a normal
store employee may not be readily equipped with. Customers can also browse multiple
e-commerce merchants and find the best prices without needing to hop from one physical
store to another.

The rising popularity of eCommerce is also fueled by the availabilty of deals and bargains.
In recognition of the changing times and the growth of e-commerce, this bill proposes the
creation of an office to oversee the full implementation of Republic Act 8792 or the
Electronic Commerce Act of 2000 and the implementation of our eCommerce roadmap.

The inevitability of e-commerce necessitates that we address the safety and facility of
using online platforms and build the ease and confidence of participants. The bill intends
to help create an environment where both customers and merchants can grow.

In view of the foregoing, the approval of this bill is earnest sought.

al

LUIS RAY! “LRA’ . VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
Second Regular Session

7491

HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT
PROTECTING CONSUMERS AND MERCHANTS ENGAGED IN INTERNET
TRANSACTIONS, CREATING FOR THIS PURPOSE THE ECOMMERSE BUREAU
AND APRROPREATING FUNDS THEREFOR

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

SECTION 1. Short Title. — This act shall be known as the “Internet Transaction Act”.

SEC. 2 Declaration of Policy. — It is the policy of the state to promote the growth of
electronic commerce (eCommerce) in the country by building trust between online sellers
and consumers. The state recognizes the growth of the digital economy where digital
access to goods and services is secure, fast, and accessible to consumers, and where
businesses are more readily able to adopt innovations to increase their efficiency.
Towards these ends, the state shall ensure fair business and advertising practices,
secure online transactions through appropriate disclosure, maintain data privacy rights,
affirm the paramount importance of product safety, and enable all consumers and
businesses to have meaningful access to effective mechanisms for dispute resolution.

SEC. 3. Definition of Terms. — As used in this act:

(A) 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;

(B) Consumer refers to a natural or juridical 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;

(C) Consumer-to-Consumer Transactions (C2Cs) refer to one-off, petty, or
occasional low-value transactions of an individual to another that are not made
in the ordinary course of business;

(0) Digital contents refer to data which are produced and supplied in electronic
form;

(E) Digital products refer to goods and services transacted over the internet;

(F) 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 electronic form uploaded or created by the consumer or
other users of that services;

(G) eCommerce Philippine Trustmark refers to the mark approved by the
eCommerce Bureau that assures consumer protection for online transactions
and consumer complaints;

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

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

(J) Goods or Digital Goods refer to physically 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;

(k) 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;

(L) Online eCommerce Platform refers to a natural or juridical person that solicits
the purchase of digital products through digital platforms and marketplaces
whose business is to connect online buyers and online sellers, facilitating sales


of products, goods or services through the internet with the presence and use
of monetary transaction.

(M) Online merchant refers to any natural, or juridical person, irrespective of
whether privately or publicly owned, that directly sells, manufactures goods, or
offers for sale, any goods and services, 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.

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

(O) 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 the goods;

(P) Repair refers to bringing goods into conformity with the contract, in case of
defective goods;

(Q)Trader refers to any natural person, or juridical person irrespective of whether
privately or publicly owned, who is acting, including through any other person
acting on the trader's name or on the trader's behalf, for purposes relating to
the trader's business, craft, or profession, in relation to contracts covered by
this Act.

SEC. 4. Scope and Coverage. - This Act applies to the sale or exchange of digital
products, including the following:

(A) Internet retail of consumer goods;

(B) Online travel services, covering the purchase of flights, hotel accommodations,
and vacation rental spaces;

(C) Digital media providers, including advertising, gaming, music subscription, and
video on demand;

(D) Ride hailing services for personal transport, delivery of food and merchandise:
and


(E) Financial services offered through digital online platforms, such as online
payments, remittances, online lending, online investment, and online insurance
services.

SEC. 5. eCommerce Bureau. - To coordinate and supervise the implementation of this
Act, and to promote the growth of the eCommerce sector, there is hereby created the
eCommerce Bureau, hereinafter referred to as the Bureau, under the Department of
Trade and Industry (DTI), to perform the following functions:

(A) Implement, monitor, and ensure strict compliance by eCommerce
stakeholders of the provisions of this Act;

(8) Build trust between consumers and sellers to promote eCommerce growth;

(C) Coordinate the formulation of policies, plans and programs to increase the
number of online merchants and consumers;

(D) Act as a virtual one stop shop for consumer complaints on internet
transactions, and facilitate the speedy resolution of consumer complaints by
the respective government agency which has jurisdiction over the complaint;

(E)Compel or petition any entity, government agency or instrumentality or take
action on any matter that may impeded eCommerce;

(F) Monitor the compliance of other government agencies or instrumentalities on
their compliance to the provisions of this Act and the eCommerce roadmap;

(G) Represents the Philippines in international negotiations to promote cross
border eCommerce transaction;

(H)Collect, compile, analyze, abstract, and publish eCommerce data for policy
formulation and program development;

(1) Prepare and conduct periodic studies on eCommerce;

(J) 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 pro-
active; and


(K)Recommend executive and legislative measures to ensure a regulatory
framework that encourages growth of the sector.

SEC. 6. Composition of the Bureau. ~ The Bureau shall be headed by a commissioner
who must have sufficient knowledge and background in production, distribution,
marketing, sale, or delivery of goods and services by electronic means.

The commissioner shall be assisted by six (6) deputy commissioners; one (1) for
administration, one (1) for finance, one (1) for planning, one (1) for operations, one (1) for
franchising, and one (1) for law enforcement and adjudication. All deputy commissioners
must be career executive service officers with at least ten (10) years of experience and
practice in eCommerce.

The commissioner and deputy commissioners shall be appointed by the President of the
Philippines upon the recommendation of the Secretary of Trade and Industry.

SEC. 7. Code of Conduct. - To build trust in online businesses and in keeping
consumers’ interests primordial, all businesses engaged in eCommerce are expected to
act responsibly, consistent with the following principles:

(A) Treat consumers with honesty, integrity, and faimess, and refrain from engaging in
illegal, fraudulent, unethical, or unfair business practices that harm consumers;

(8) Uphold their responsibilities to the public and to the state, and to apply the rights of
consumers equally;

(C)Comply with applicable laws and regulations, especially the protection of intellectual
property rights;

(D)Ensure that goods and services marketed and sold online to Philippine consumers
conform to Philippine regulatory standards and provide accurate information about
the digital products in Filipino and English;

(E)Ensure that the safety of digital products marketed or sold online are not
compromised and that products that have been recalled in the offline retail market
are not marketed or sold online;

(F) Be honest and truthful in all representations and alll information on digital products
or services must be easily accessible, complete, and correct and promoted through
fair advertising and marketing practices;


(G) Be transparent to consumers about costs and avoid any hidden charges or
additional costs such as customs duties, currency conversion, and shipping, or
delivery;

(H) Allow for tracking of deliveries by online merchants and provide complete records
of the goods purchased and have them delivered within the promised time and
described condition;

(1) Offer cancellation options in order that consumers may be able to review their online
orders before finally confirming their purchase, and be able to withdraw from a
confirmed transaction in appropriate circumstances;

(J) Take consumer complaints seriously and address them fairly by instituting
comprehensive and equitable mechanisms for consumer redress through easy, fair,
and transparent methods, and provide compensation, refund, repair, and
replacement, if warranted;

(K) Keep private information private by strictly complying with all applicable 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;

(L) Ensure the safety and security of online payments and safeguard sensitive data by
using secure technology and protocols as evidenced by visible trust certificates;

(M) Avoid online spamming except online spamming or unsolicited commercial email
or bulk email subject to the control and discretion of the consumer through readily
accessible configurations allowing the consumer to choose whether they wish to
receive or opt-out from commercial messages by email or electronic means;

(N) Avoid improper conduct such as producing fake online reviews or spreading wrong
information about competitors but allowing consumers to make critical reviews about
digital products; and

(0) Educate consumers about online risks as a priority by informing the consumers
about risks of internet transactions and providing competent and professional
advice.

Whenever appropriate, the DTI shall issue the corresponding rules and regulations in
accordance with international best practices.


SEC. 8. 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) A Filipino individual who is duly licensed to do business as a single proprietor
with the DTI;

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

(C) A Filipino cooperate that is duly licensed by the Cooperative Development
Authority (CDA); and

(0) A foreign corporation that is duly licensed by the SEC to transact business in the
Philippines.

A resident of the Philippines who engages in unauthorized eCommerce activities in the
ordinary course of trade or business shall be subject to the penal provisions of this Act.

Aperson 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 marketing goods or
services that are accessible in the Philippines may not evade legal liability in the
Philippines owing to the fact of non-residency, and shall be subject the same obligations
and liabilities arising from any transaction as those who are authorized to engage in
eCommerce in the Philippines.

SEC. 9 Business Registration. —

(A) To encourage the formation of business enterprises, the growth and
integrated development of eCommerce, and protection of online consumers,
all individuals engaged in internet transactions as Online Merchants or as
Online eCommerce Platforms shall register as a business either as a sole
proprietor, one-person corporation, partnership, corporation, or cooperatives.

(8) No person shall be allowed to engage in eCommerce, including the sale of
any digital product without a license to operate. Any entity, whether natural or
juridical, who offers to sell or have been found engaged in any internet


transaction without a license to operate is in violation of this Act; Provided,
however, that consumer to consumer transactions shall not be covered by this
Act. For the first year of implementation, the penalty for unregistered online
merchants and first-time offenders shall be waived upon presentation of
business registration papers.

(C) All regulatory agencies responsible for business registration whether for sole
proprietorships, one-person corporations, partnerships, corporations, or
cooperatives, shall extend its jurisdiction or regulatory powers over business
websites and other communication channels covering internet transactions.
The DTI or any of the implementing agencies shall have the authority to
enforce website takedown procedures, and shall report the violator to the
Bureau of Internal Revenue.

(0) Consistent with Republic Act No. 11032, otherwise known as the “Ease of
Doing Business Act,” all National Government agencies and local government
agencies (LGUs) shall make available online registration of business permits
and licenses particularly for those engaged in eCommerce

(E) The SEC, LGUs, and the CDA shall submit to the DTI an annual list of
registered enterprises for monitory and for purposes of maintaining a database
of online merchants.

SEC. 10. Regulatory Jurisdiction of the DTI. — The DTI shall exercise primary
regulatory jurisdiction over any website, webpage, social media account, or other similar
platform that markets digital products that are accessible in the Philippines regardless of
whether the owner of the website, webpage, social media account, or other similar
platform is authorized to engage in eCommerce in the Philippines. The jurisdiction of the
DTI includes the authority to order the owner of the website, webpage, social media
account, or other similar platform to desist from marketing or offering goods or services,
that are accessible in the Philippines on account of violation of this Act, or any other
consumer or trade laws and regulations, as well as the prerogative to refer the matter to
the Bureau of Internal Revenue for appropriate action.

SEC. 11. Obligations of Online eCommerce Platforms. -

(A) Online eCommerce Platforms shall ensure that any commercial communication
shall:

() Be clearly identifiable as a commercial communication;


il)

(iv)

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

Clearly identify any promotion offer including any discount, premium,
or gift, and ensure that any conditions which must be met to quality
for it are easily accessible, and presented clearly and
unambiguously; and

Clearly identify any promotional competition or game and ensure that
any conditions for participation are easily accessible and presented
clearly and unambiguously.

(B) Online eCommerce Platform shall require all Online Merchants, prior to the
latter's onboarding to submit the following:

@
(i)

(i)
(iv)

()

Name of the online merchant;

Registration documents of the online merchant from the appropriate
regulatory authority, including but not limited to business permits,
certificate of registration, barangay clearance;

Geographic address at which the online merchant is established;

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.

(C) Online eCommerce Platforms shall maintain a file of all registered online
merchants which shall be regularly verified and updated.

(0) Online eCommerce Platforms shall publish on their website, webpage, social
media account, or other similar platform, the following general information:

0)

Name of the online merchant;


0)

(ii)
(wv)

Registration documents of the online merchant from the appropriate
regulatory authority, including but not limited to business permits,
certificate of registration, barangay clearance;

Geographic address at which the online merchant is established;

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 seller and
communicate in a direct and effective manner; and

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

(E) Online eCommerce Platforms shall submit to the Bureau a list of all online
merchants registered under their platform. When an online eCommerce Platform
discovers that an 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.

Where the Online eCommerce Platform provides prices, the prices shall be
indicated clearly and unambiguously and, in particular, shall indicate whether the
prices are inclusive of taxes and delivery costs.

SEC. 12. 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 the
following requirements:

0)

(i)

The goods are of the description, type, quantity, and quality, and
possess the functionality, compatibility, interoperability and other
features, as required by sales contract;

The seller must show a sample or a 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,


(iii)

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; fir for any particular
purpose for which the consumer requires them and which the
consumer made known to the seller at the time of the conclusion of
the contract, and which the seller has accepted; and possess the
qualities and performance capabilities indicated in any pre-
contractual statement which forms an integral part of the contract.

All digital goods shall;

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

(b) 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 seller or other persons in
earlier links of the chain of transactions, including the producer,
unless the online merchant shows that:

4. The online merchant was not, and could not reasonably have
been aware of the statement in question;

2. By the time of conclusion of the contract, the statement had
been corrected; or

3. The decision to buy the goods could not have been influenced
by the statement.

(B) Be liable for any lack of conformity with the contract which exists at the time

when:

0)

qi)

The consumer or a third party indicated by the consumer other than
the carrier 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 proposed by the seller or where
the seller proposes no means of carriage;

The goods were installed by the seller or under the seller's
responsibility, and the time when the installation is completed is
considered as the time when the installation is completed is


(i)

(v)

considered as the time when the consumer has acquired the physical
possession of the goods;

The goods were intended to be installed by the consumer, and the
time when the consumer had reasonable time for the installation not
later than thirty (30) days after the time indicated in subparagraph (a)
of paragraph B, is considered as the time when the consumer has
acquired the physical possession of the goods.

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:

(a) The goods were installed by the seller or under the seller's
responsibility; and

(b) 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 instruction.

(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 seller may
modify the digital content or digital service in conformity, if the following conditions

are met:

0)

(i)

(ii)

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.

(C)Where the online merchant operates its own website, webpage, social media
account, or any other similar platform, it all shall publish on its homepage the

following

(i)

Name of the online merchant;


(ii) Registration documents of the online merchant from the appropriate
regulatory authority, including but not limited to business permits,
certificate of registration, barangay clearance;

(i) Geographic address at which the online merchant is established;

(iv) 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 seller and
communicate in a direct and effective manner; and

(v) Details of any professional body or similar institution with which the
online merchant is registered, in instances when the online merchant
exercise 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 contact.

SEC. 13 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) A repair or replacement must be completed within a reasonable time and
a 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;

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

(i) Arepair of replacement is impossible of unlawful;

(i) The online merchant has not completed repair or replacement within a
reasonable time;


(iii) A repair or replacement may cause significant inconvenience to the
consumer; or

(iv) The online merchant has declared, or it is equally clear from the
circumstances that the online merchant may not bring 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 online merchant has brought the goods into conformity with
the contract;

(0) 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 remedied the lack of conformity with the
contract by replacement, the online merchant may take back the replaced 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 all associated costs shall be for the account of the
online merchant;

(G) _ Incase 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:

(i) The value the goods would have if the goods conformed to the contract;

(i) The significance of the lack of conformity with the contract; and

(iii) Whether the alternative remedy may be completed without significant
inconvenience to the consumer,

The reduction of price is proportionate to the decrease in the value of the goods
which were received by the consumer compared to the value the goods would
have if in conformity with the contract.


Sec. 14. 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 goods which was acquired as an accessory
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 form receipt of the
notice;

(8) 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 retumed because of destruction or loss, the
consumer shall pay to the online merchant the monetary value which 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; and

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

SEC. 15. Damages. - The online merchant is liable for damages to the consumer due to
the lack of conformity with the contract of the goods: Provided, that the lack of conforming
becomes apparent within two (2) years from the relevant time of establishing conformity.

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

SEC. 16. 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 traders seeking out-of-court resolution of disputes.


(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 date
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 from the design stage, and the ODR
platform is accessible and usable by all, including vulnerable users.

(8) 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 DT!'s Fair Trade Enforcement Bureau,
Department of Agriculture, Department of Tourism, and the Department
of Health. The National Privacy Commission and the Intellectual
Property Office of the Philippines shall also form part of the ODR
network.

(C) Each agency shalll 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.

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

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

(i) 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

(iii) 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 shall ensure that the information in the website is accurate, up
to date and provided in 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 and
electronic link to the DTI ODR platform on their home page. 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 within three (3)
months from the effectivity of this Act.

SEC. 17. Joint and Solidary Liability. - Online eCommerce platforms shall share
solidary liability with an online merchant under the following instances:

(A) If the online eCommerce platform fails to exercise extraordinary
diligence to prevent any loss or damage to the consumer;

(B) If the identity of the online merchant and the online eCommerce
platform is the same;

(C)If the online eCommerce platform knows or should have known that the
digital products sold do not comply with law, or otherwise infringes on
intellectual property rights, and fails to take necessary measures;

(D)If the online eCommerce platform fails to publish details of its online
merchant;

(E)If the online eCommerce Platform fails to examine digital products
related to food, drugs, and cosmetics or otherwise relates to the life or
health of consumers;

(F)If an online merchant is not duly registered with the appropriate
regulatory agencies and the online eCommerce platform permits the
online merchant to sell digital products;

SEC. 18. Digital Payments. - Online eCommerce Platforms and Online Merchants shall,
issue paper or electronic invoices or receipts for all sales. An electronic invoice or receipt
shall have the same legal effect as a physical invoice or receipt.


Within sixty (60) days from the effectivity of this Act, the Bureau of Internal Revenue shall,
in coordination with the Bureau of Customs, issue rules and regulations that modernize
and streamline the regulatory framework and encourage the adoption of electronic
payment systems by the citizenry. The DTI and the Bangko Sentral ng Pilipinas shall also
develop guidelines to protect merchants and consumers covering the various digital
payment solutions.

SEC. 19. Tax Exemption for Newly Registered eCommerce Enterprises. — Newly
registered micro-enterprises, as defined under existing laws, and which are engaged in
eCommerce shall be exempt from all national and local taxes for the first two (2) years of
operation under the following conditions:

(A)The enterprise is not and affiliate, subsidiary, or a franchise of any existing
company;

(B) In the case of a sole proprietorship, one-person corporation or partnership, it
does not have any previous or other existing registered companies,
partnerships, or businesses; and

(C)In the case of a corporation, each stockholder of the eCommerce enterprise
must gave at least a five percent (5%) share in stocks and the corporation must
have no nominal stakeholders or stockholders holding the shares in trust for
others: Provided, That all stockholders of the corporation shall not have held
shares of a previous or existing corporation with at least a five percent (5%)
share therein, nor registered any former or existing sole proprietorship or
partnership.

SEC. 20. eCommerce Philippine Trustmark. — To provide assurance of safety and
security in internet transactions, an eCommerce Philippine Trust mark shall be developed
for online merchants.
(A) The DTI is tasked to create and eCommerce Philippines Trustmark to be
administered and managed by an industry-led private sector governance body.

(B) The industry-led governance body comprises the following:
(i) Two (2) representatives from the digital platforms;

(i) Two (2) representatives from the payment gateways;
(ji) Two (2) representatives from the logistics services;


(iv) Two (2) representatives from other enablers; and
(v) One (1) representative from the public sector.

(C)An eCommerce Philippine Trust mark on the website of an online merchant
signifies that the company is committed to the Code of Conduct stipulated in
Section 8 of this Act, guaranteeing ethical standards in the digital marketplace.

(0) In the case of a complaint involving the purchase of their products or services,
those companies with the trustmark shall give consumers the option of filing
claims through the trustmark portal, if the company’s customer care service has
not been able to resolve the issue.

(E) The eCommerce Philippine Trustmark shall be linked to DTI's online ODR.

SEC. 21. Data Retention and Protection. - Online marketplaces and eCommerce
businesses who collect personal data shall follow the data protection standards set out
by DTI in coordination with National Privacy Commission, which shall include the
following

(A) Obtaining personal data in a legal manner;

(8) Keeping accurate and up-to-date personal data, providing the data owner with
the opportunity to change the informatiot

(C) Obtaining personal data must only when relevant to what is described in the
online marketplace;

(0) Storing personal data must use the appropriate security system to prevent
breaches or other illegal uses;

(€) Prohibiting the utilization of personal data collected beyond the utilization
period to be provided in rules and regulations; and

(F) Prohibiting the data collected from being transferred or sent to other countries
unless otherwise allowed by a treaty or any other international obligation.

SEC. 22. Implementing Agencies. - The provisions of this Act and its implementing
rules and regulations shall be enforced by the following agencies:

(A) Department of Trade and Industry, with respect to consumer products;
(8) Department of Health, with respect to food, drugs, cosmetics, health products,

and substances;
(C) Department of Agriculture, with respect to products related to agriculture;


(D) Intellectual Property Office of the Philippines, with respect to intellectual
property, particularly on infringement of patents, trademarks, and copyrights;

(E) Optical Media Board, with respect to digital media and enforcement of online
piracy;

(F) Philippine National Police, with respect to cybercrime; and

(G) Bangko Sentral ng Pilipinas, with respect to the implementation of Republic
Act No. 11127, otherwise known as the “National Payment System Act.”

SEC. 23. Jurisdiction. — The implementing agencies mentioned in Section 21 of this Act
shall continue to exercise the powers and duties provided to them under existing laws,
unless repealed or modified accordingly. All implementing agencies must develop and
implement programs to inform and educate their respective stakeholders about
eCommerce, including the provisions under this Act.

SEC. 24. Penalties. —

(A) Online merchants found guilty of violating Section 9, paragraph (B) of this Act
or 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 digital products as advertised, and forfeiture of
license; and

(B) Online eCommerce platforms and online merchants found guilty of violating
Section 11 or Section 12 (D) of this Act shall be punished with a fine not less
than Five Hundred Thousand Pesos (P500,000.00) but not more than Five
Million Pesos (P5,000,000,00) or the revocation of their licenses, or both, at the
discretion of the court.

SEC. 25. Appropriations. — The amount of Fifty million pesos (P50,000,000.00) for the
initial operation of the Bureau is hereby appropriated out of any funds in the National
Treasury not otherwise appropriated. Thereafter, such sum as may be necessary for the
continued implementation of this Act shall be included in the annual General
Appropriations Act.


SEC. 26. 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. 27. 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. 28. Effectivity Clause. - This Act shall take effect thirty (30) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,