EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
 
) 
 
 
SENATE 
S.B. No.__________ 
 
 
Introduced by SENATOR IMEE R. MARCOS 
 
AN ACT  
PROMOTING ONLINE TRANSACTIONS, SAFEGUARDING THE RIGHTS OF 
CONSUMERS AND MERCHANTS, AND FOR OTHER PURPOSES 
 
EXPLANATORY NOTE 
Article II, Section 20 of the 1987 Constitution provides that, “The State 
recognizes the indispensable role of the private sector, encourages private enterprise, 
and provides incentives to needed investments.”  
In 2000, Republic Act No. 8792 otherwise known as the “Electronic Commerce 
Act of 2000” was enacted which aimed to facilitate domestic and international 
dealings, transactions, agreements, contracts and exchanges and storage of 
information through the utilization of electronic, optical and similar medium, 
instrumentality and technology to recognize the authenticity and reliability of 
electronic data messages or electronic documents related to such activities and to 
promote the universal use of electronic transactions in the government and by the 
general public. 
However, two decades later, the said law remains unchanged. The shift to 
electronic or online commerce is inevitable. The use of technology-based services such 
as online markets is expected to soar with the continued threat of the COVID-19 
pandemic.  
The Philippine Statistical Authority (PSA) released the 2nd Quarter GDP Data of 
2020 last August 6, 2020. The 2nd Quarter GDP contracted by 16.5% year-on-year. 
With a contraction of 0.7% of GDP on 1st Quarter 2020, the Philippines is now officially 
in recession, defined as 2 quarters of economic contraction. 
Further, mobility restrictions and personal avoidance behavior curbed not just 
demand, but also the production of goods and services, with, for instance, the services 
sector growing at its slowest pace in nearly three decades in the first quarter of 2020. 
Sept 07 2020
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1808


 
 
Thus, the trend in digital transactions and the surge in the use of online e-commerce 
and cashless payments shall create a huge impact in the recovery of the Philippine 
economy.  
The bill seeks to promote the growth of the eCommerce and online transactions 
where digital access to goods and digital products, including digital content and digital 
services, are secure, fast, and accessible to consumers, and where businesses are 
more readily able to adopt to innovations.  Further, the bill aims to uphold fair business 
competition and practices and enable all businesses and consumers with online 
eCommerce platforms to have access to effective mechanisms for dispute resolution 
Given the abovementioned circumstances, the immediate passage of this bill is 
earnestly sought. 
 
 
  
 
 
 
 
 
 
 
 
IMEE R. MARCOS


1 
 
EIGHTEENTH CONGRESS OF THE )  
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
 
) 
 
SENATE 
S.B. No.__________ 
 
 
Introduced by SENATOR IMEE R. MARCOS 
 
 
AN ACT  
PROMOTING ONLINE TRANSACTIONS, SAFEGUARDING THE RIGHTS OF 
CONSUMERS AND MERCHANTS, AND FOR OTHER PURPOSES 
 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
 
Section 1. Short Title. – This Act shall be known as the “Online Transactions Act.” 
1 
Sec. 2. Declaration of Policy. – The State shall promote the growth of the eCommerce, 
2 
digital economy, and online transactions where digital access to goods and services are 
3 
secure, fast, and accessible to consumers, and where businesses are more readily able to 
4 
adopt to innovations.  Further, the State shall ensure fair business competition and practices 
5 
and enable all businesses and consumers with online eCommerce platforms to have access to 
6 
effective mechanisms for dispute resolution. 
7 
Sec. 3. Scope and Coverage. – This Act shall apply to eCommerce transactions or the 
8 
sale, lease, exchange, traffic, or distribution of digital products over the internet or by 
9 
electronic means, which shall include the following: 
10 
a. Online retail of consumer goods and services; 
11 
b. Online travel and tour services, covering the purchase or booking of flights, 
12 
accommodations and rental spaces, as well as reservations at restaurants and 
13 
other tourism-related establishments or activities; 
14 
c. Digital media, including advertising, gaming, music subscription, video-on-
15 
demand, and other streaming or over-the-top (OTT) media content and services; 
16 
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1808


2 
 
d. Booking services relating to Ride-hailing services for personal transport, insofar as 
1 
this Act is not inconsistent with the issuances of the Land Transportation 
2 
Franchising and Regulatory Board (LTFRB) related to transport network vehicle 
3 
service (TNVS), delivery of food and merchandise, and other articles, and other 
4 
similar booking services; and 
5 
e. Financial services offered through digital online platforms, such as online 
6 
payments, remittances, online lending, online investment, and online insurance 
7 
services, insofar as this Act is not inconsistent with the provisions of Republic Act 
8 
No. 11127 otherwise known as the “National Payment Systems Act (NPSA).” 
9 
For purposes of this Act, “Electronic Commerce or eCommerce” shall refer to the sale, 
10 
lease, exchange, traffic or distribution of goods, commodities, productions, services or 
11 
property, tangible or intangible, over the Internet or by electronic means and the transfer of 
12 
data and money or consideration, pursuant to these transactions. 
13 
Sec. 4. eCommerce Bureau. – Upon the effectivity of this Act, there is hereby created 
14 
the “eCommerce Bureau”, hereinafter referred to as the “Bureau”, under the Department of 
15 
Trade and Industry (DTI), in coordination with the concerned department or agency, shall 
16 
perform the following functions: 
17 
a. Implement, monitor, and ensure strict compliance by eCommerce stakeholders of 
18 
the provisions of this Act; 
19 
b. Build trust between consumers and sellers, and Online eCommerce Platform 
20 
Providers to promote eCommerce growth; 
21 
c. Coordinate the formulation of policies, plans and programs to increase the number 
22 
of online merchants and consumers; 
23 
d. Ensure fair competition among all key players in the eCommerce industry; 
24 
e. Act as a virtual one stop shop for consumer complaints on internet transactions, 
25 
and facilitate the speedy resolution of consumer complaints by the respective 
26 
government agency which has jurisdiction over the complaint; 
27 
f. Compel or petition any entity, government agency or instrumentality of take action 
28 
on any matter that may impeded eCommerce; 
29 
g. Monitor the compliance of other government agencies or instrumentalities on their 
30 
compliance to the provisions of this Act and the eCommerce roadmap; 
31 
h. Represent the Philippines in international negotiations to promote cross border 
32 
eCommerce transactions; 
33 


3 
 
i. 
Collect, compile, analyze, abstract, and publish eCommerce data for policy 
1 
formulation and program development; 
2 
j. Prepare and conduct periodic studies on eCommerce; 
3 
k. Collaborate with departments of the national government including local 
4 
government units and government-owned or controlled corporations in 
5 
implementing programs to promote eCommerce, including information, education, 
6 
and campaign, as well as in ensuring a policy regime that is pro-active;  
7 
l. 
Compel or petition any entity, government agency or instrumentality of take action 
8 
on any matter that may impeded eCommerce; and 
9 
m. Recommend executive and legislative measures to ensure a regulatory framework 
10 
that encourages growth of the sector. 
11 
For purposes of this Act, the following shall be defined as follows:  
12 
a. “Consumer” shall refer to a natural or juridical person who, acting for purposes which 
13 
are outside that person’s trade, business, craft, or profession, is a purchaser, lessee, 
14 
recipient or prospective  purchaser, lessee or, recipient of consumer products, services, 
15 
credit, digital products including digital content and digital services or the subject of 
16 
advertising or promotions, and other goods and services sold, offered for sale, or made 
17 
available through, by means of or in eCommerce; 
18 
b. “Online eCommerce Platform Provider” shall refer to a natural or juridical person that 
19 
solicits, promotes, markets, allows or facilitates the perfection and/or consummation 
20 
of the purchase and sale through the Internet or eCommerce transactions over digital 
21 
products through transfer of data; Provided, that natural or juridical entities purporting 
22 
to act as Online eCommerce Platform providers will be deemed to be Online Merchants 
23 
under this Act if they act for purposes relating to their own business, and as the direct 
24 
contractual partner of the consumer for the supply of digital products; 
25 
c.  “Online eCommerce Platform” shall refer to digital platforms, accessible to consumers 
26 
over the Internet, either through websites or mobile applications, or both, which 
27 
connect consumers and sellers, facilitate the perfection and/or consummation of sales 
28 
of digital products, goods or services through the Internet, which include, among 
29 
others, online marketplaces, online shopping malls, online intermediaries / brokers, 
30 
online search engines, and online comparison tools; and 
31 
d. “Online Merchant” shall refer to any natural, or juridical person, irrespective of whether 
32 
privately or publicly owned, who in the ordinary course of business, is engaged in the 
33 
selling of digital products, whether or not manufactured or produced by such person, 
34 


4 
 
directly to consumers over the internet, either through a website or mobile application, 
1 
an Online eCommerce Platform, a social media website or application, or through other 
2 
similar means. 
3 
 
4 
Sec. 5. Composition of the Bureau. –  The Bureau shall be headed by a Commissioner 
5 
who must have sufficient knowledge and background in production, distribution, marketing, 
6 
sale, or delivery of goods and services by electronic means. 
7 
The Commissioner shall be assisted by six (6) Deputy Commissioners, as follows: one 
8 
(1) for Administration, one (1) for Finance, one (1) for Planning, one (1) for Operations, one 
9 
(1) for Franchising, and one (1) for Law Enforcement and Adjudication. All Deputy 
10 
Commissioners must be Career Executive Service Officers with at least ten (10) years of 
11 
experience and practice in eCommerce. However, the Deputy Commissioner for Law 
12 
Enforcement and Adjudication must be a member of the Philippine Bar.  
13 
The Commissioner and Deputy Commissioners shall be appointed by the President of 
14 
the Philippines upon the recommendation of the Secretary of Trade and Industry. 
15 
CHAPTER I 
16 
ONLINE RETAIL OF CONSUMER GOODS 
17 
 
18 
Sec. 6. Qualifications to Engage in eCommerce. - The following are presumed legally 
19 
to be qualified to engage in eCommerce in the Philippines in the ordinary course of their trade 
20 
or business: 
21 
a. A Filipino individual who is duly licensed to do business as a single proprietor and 
22 
authorized to engage in such eCommerce activities with the DTI; 
23 
b. A juridical entity that is organized and existing under Philippine laws, duly registered 
24 
with the Securities and Exchange Commission (SEC), and authorized to engage in such 
25 
eCommerce activities whether as a corporation or as a partnership; 
26 
c. A Filipino cooperative that is duly licensed and authorized to engage in such 
27 
eCommerce activities by the Cooperative Development Authority (CDA); and 
28 
d. A foreign corporation that is duly licensed and authorized to engage in such 
29 
eCommerce activities by the SEC to transact business in the Philippines. 
30 


5 
 
Provided, that a person who is authorized to engage in eCommerce in the Philippines 
1 
and who facilitates the sale of a digital product or service by one who is not so authorized 
2 
shall be deemed primarily liable for any obligation, damage, or fine, that may arise from the 
3 
transaction or from the digital product, without prejudice to the obligation, damage, or fine 
4 
that may be imposed on the latter under existing laws and regulations, subject to the 
5 
provisions of this Act. 
6 
Provided, further, that a non-resident of the Philippines who, in the ordinary course of 
7 
business, engages in eCommerce transactions in relation to digital products, by marketing 
8 
goods or services, that are accessible in the Philippines or made available to consumers in the 
9 
Philippines, may not evade legal liability in the Philippines owing to the fact of non-residency, 
10 
and shall be subject the same obligations and liabilities arising from any transaction as those 
11 
who are authorized to engage in eCommerce in the Philippines. 
12 
Sec. 7. Business Registration. – For purposes of this Act, the following shall be 
13 
considered: 
14 
a. To encourage the formation of business enterprises, the growth and integrated 
15 
development of eCommerce, and protection of consumers, all persons, natural or 
16 
juridical, engaged in eCommerce transactions either as Online Merchants or as 
17 
online eCommerce Platform Providers, shall register with and/or obtain the 
18 
necessary business license from the DTI, SEC, or CDA, as the case may be, either 
19 
as a sole proprietor, one-person corporation, partnership, corporation, or 
20 
cooperative, or as a branch office for foreign corporations; 
21 
b. Any person, whether natural or juridical, is found to be engaged in eCommerce 
22 
transactions, either as Online Merchants or as Online eCommerce Platforms, in the 
23 
ordinary course of business, without such business license and/or registration is in 
24 
violation of this Act and other existing laws and regulations; Provided that, 
25 
Consumer-to-Consumer (C2C) transactions, or singular, isolated, casual, or 
26 
occasional transactions between one consumer to another, both acting for 
27 
purposes which are outside their respective trade, business, craft, or profession, 
28 
shall not be covered by this Act; and Provided further that, for a period of one (1) 
29 
year from the effectivity of this Act, the applicable penalties for the first offense of 
30 
unregistered Online Merchants Online eCommerce Platform Providers commuted  
31 
shall be waived upon presentation of business registration papers; 
32 
c. All regulatory agencies responsible for business registration whether for sole 
33 
proprietorships, 
one-person 
corporations, 
partnerships, 
corporations, 
or 
34 


6 
 
cooperatives, shall extend its jurisdiction or regulatory powers over business 
1 
websites and other communication channels covering internet transactions. The 
2 
DTI or any of the implementing agencies shall have the authority to enforce 
3 
website takedown procedures and shall report the violator to the Bureau of Internal 
4 
Revenue; 
5 
d. Consistent with Republic Act No. 11032, otherwise known as the “Ease of Doing 
6 
Business Act,” all National Government agencies and local government agencies 
7 
(LGUs) shall make available online registration of business permits and licenses 
8 
particularly for those engaged in eCommerce; and 
9 
e. The SEC, LGUs, and the CDA shall submit to the DTI an annual list of registered 
10 
enterprises for monitoring and for purposes of maintaining a database of online 
11 
merchants. 
12 
 
13 
Sec. 8. Foreign Corporations Registration Requirement. – Foreign corporations who 
14 
are not registered or duly licensed by the SEC, but who are otherwise doing or engaged in 
15 
the eCommerce business within the Philippines, including maintaining active websites which 
16 
generate sufficient business over the internet from Philippine consume, should acquire 
17 
registration with the SEC, as may be determined by the SEC under the rules and regulations. 
18 
Sec. 9. Regulatory Jurisdiction of the DTI. – The DTI shall exercise primary regulatory 
19 
jurisdiction over any website, webpage, social media account, or other similar platform that 
20 
markets digital products that are accessible in the Philippines, regardless of whether the owner 
21 
of the website, webpage, social media account, or other similar platform is authorized to 
22 
engage in eCommerce in the Philippines. The jurisdiction of the DTI includes the authority to 
23 
order the owner of the website, webpage, social media account, or other similar platform to 
24 
desist from marketing or offering goods or services that are accessible in the Philippines on 
25 
account of violation of this Act, or any other consumer or trade laws and regulations, as well 
26 
as the prerogative to refer the matter to the Bureau of Internal Revenue for appropriate 
27 
action.  
28 
Sec. 10. Obligations of Online eCommerce Platforms Providers. – Online eCommerce 
29 
Platform Providers shall have the following obligations: 
30 
a. Online eCommmerce Platforms Providers shall ensure that any commercial 
31 
communications in their Online eCommerce Platforms shall: 
32 
i. 
Be clearly identifiable as a commercial communication; 
33 


7 
 
ii. Clearly identify the person or entity on whose behalf the commercial 
1 
communication is made; 
2 
iii. Clearly identify any promotional offer including any discount, premium, or gift, 
3 
and ensure that any conditions which must be met to qualify for it are easily 
4 
accessible, and presented clearly and unambiguously; and 
5 
iv. Clearly identify any promotional competition or game and ensure that any 
6 
conditions for participation are easily accessible and presented clearly and 
7 
unambiguously. 
8 
b. Online eCommmerce Platforms Providers shall require all Online Merchants, prior 
9 
to the latter’s onboarding, to submit the following: 
10 
i. 
Name of the online merchant; 
11 
ii. 
Registration documents of the online merchant from the appropriate 
12 
regulatory authority, including but not limited to business permits, 
13 
certificate of registration, barangay clearance; 
14 
iii. 
Geographic address at which the online merchant is established; 
15 
iv. Details of the online merchant, a mobile or landline number, and a valid 
16 
electronic mail address, which makes it possible to immediately and easily 
17 
contact and communicate with the online merchant and communicate in a 
18 
direct and effective manner; and 
19 
v. Details of any professional body or similar institution with which the online 
20 
merchant is registered, in instances when the online merchant exercises a 
21 
regulated profession. 
22 
c. Online eCommmerce Platforms Providers shall maintain a file of all registered 
23 
online merchants which shall be regularly verified and updated. 
24 
Online eCommerce Platforms shall publish on their website, webpage, social media 
25 
account, or other similar platform, the information on the online merchant required 
26 
to be collected from the latter under Section 10 of this Act. 
27 
Sec. 11. Internet Transactions Involving Consumers. – An online merchant of goods 
28 
shall exercise the following responsibilities: 
29 
a. Deliver or cause the delivery of goods to the consumer ensuring the following 
30 
requirements: 
31 
i. The goods are of the description, type, quantity, and quality, and possess the 
32 
functionality, compatibility, interoperability and other features, as required by 
33 
the sales contract. The seller must show a sample or a model of the goods to 
34 


8 
 
the consumer and the goods possess the quality of and correspond to the 
1 
description of the sample or model; possess the qualities and performance 
2 
features of which the consumer may reasonably expect; for any particular 
3 
purpose for which the consumer requires them and which the consumer made 
4 
known to the seller at the time of the conclusion of the contract, and which the 
5 
seller has accepted; and possess the qualities and performance capabilities 
6 
indicated in any pre-contractual statement which forms an integral part of the 
7 
contract. 
8 
ii. 
Ensure that all digital goods shall: 
9 
a. Be delivered along with the accessories including packaging, installation 
10 
instructions or other instruction as the consumer may expect to receive; 
11 
and 
12 
b. Possess qualities and performance capabilities which are normal in 
13 
goods of the same type and which the consumer may expect given the 
14 
nature of the goods and taking into account any public statement made 
15 
by or on behalf of the seller or other persons in earlier links of the chain 
16 
of transactions, including the producer, unless the online merchant 
17 
shows that: 
18 
1. The online merchant was not, and could not reasonably have been 
19 
aware of the statement in question; 
20 
2. By the time of conclusion of the contract, the statement had been 
21 
corrected; or 
22 
3. The decision to buy the goods could not have been influenced by 
23 
the statement. 
24 
b. Be liable for any lack of conformity with the contract which exists at the time when 
25 
the consumer or a third party indicated by the consumer other than the earner has 
26 
acquired the physical possession of the goods, or when the goods are handed over 
27 
to the carrier chosen by the consumer, and that carrier was not proposed by the 
28 
seller or where the seller proposes no means of carriage: 
29 
i. The goods were installed by the seller or under the seller’s responsibility, and 
30 
the time when the installation is completed is considered as the time when the 
31 
consumer has acquired the physical possession of the goods; 
32 
ii. The goods were intended to be installed by the consumer, and the time when 
33 
the consumer had reasonable time for the installation not later than thirty (30) 
34 
days after the time indicated in subparagraph (a) of paragraph B, is considered 
35 


9 
 
as the time when the consumer has acquired the physical possession of the 
1 
goods. 
2 
iii. The goods are incorrectly installed. Any lack of conformity resulting from the 
3 
correct installation is regarded as lack of conformity with the contract of the 
4 
goods if: 
5 
1. The goods were installed by the seller or under the seller’s responsibility; 
6 
and 
7 
2. The goods, intended to be installed by the consumer, were installed by 
8 
the consumer and the correct installation was due to a shortcoming in 
9 
the installation instructions. 
10 
c. Where the online merchant operates its own website, webpage, social media 
11 
account, or any other similar platform, it shall publish on its homepage the 
12 
following: 
13 
i. 
Name of the online merchant; 
14 
ii. Registration documents of the online merchant from the appropriate regulatory 
15 
authority, including but not limited to business permits, certificate of 
16 
registration, barangay clearance; 
17 
iii. 
Geographic address at which the online merchant is established; 
18 
iv. Details of the online merchant, a mobile or landline number, and a valid 
19 
electronic mail address, which makes it possible to immediately and easily 
20 
contact and communicate with the online seller and communicate in a direct 
21 
and effective manner; and 
22 
v. Details of any professional body or similar institution with which the online 
23 
merchant is registered, in instances when the online merchant exercises a 
24 
regulated profession 
25 
 
26 
Any agreement is valid only if, at the time of the conclusion of the contract, the 
27 
consumer has knowledge of the specific condition of the goods and the consumer has expressly 
28 
accepted this specific condition when concluding the contract. 
29 
 
30 
For purposes of this Act, “goods” shall refer to physically produced items over which 
31 
ownership rights may be established and whose economic ownership may be passed from one 
32 
institutional unit to another, by engaging in transactions, and may include, among others: 
33 


10 
 
(i) any tangible movable items, including water, gas, and electricity. Provided that, 
1 
water, gas and electricity will be consisted as goods only if they are put up for supply 
2 
in a limited volume or set quantity; and 
3 
(ii) goods with digital elements, or any tangible movable items that incorporate or are 
4 
inter-connected with digital content or a digital service in such a way that the absence 
5 
of that digital content or digital service would prevent the goods from performing their 
6 
functions. 
7 
CHAPTER II 
8 
DIGITAL MEDIA 
9 
 
10 
Sec. 12. Internet Transactions Involving Digital Media. – A digital career worker, 
11 
freelancer, and freelance worker shall deliver or cause the delivery of digital products to the 
12 
consumer ensuring that such shall possess the qualities and performance features, including 
13 
in relation to functionality, compatibility, interoperability, accessibility, continuity, and security, 
14 
normal for digital content or digital services of the same type and of which the consumer may 
15 
reasonably expect. 
16 
Where the contract provides that the digital content or digital service is to be supplied 
17 
or made accessible to the consumer over a period of time, the seller may modify the digital 
18 
content or digital service beyond what is necessary to maintain the digital content or digital 
19 
service in conformity, if the following conditions are met: 
20 
i. The contract allows, and provides a valid reason for, such a modification; 
21 
ii. Such a modification is made without additional cost to the consumer; and 
22 
iii. The consumer is informed in a clear and comprehensible manner of the 
23 
modification. 
24 
For purposes of this Act, the following shall be defined as follows: 
25 
i. “Digital Products” shall refer to goods and services transacted over the internet 
26 
or by electronic means or otherwise in eCommerce, as defined in this Act, and 
27 
shall include digital content and digital services; 
28 
ii. “Digital Content” shall refer to data which are produced and supplied in digital 
29 
form; 
30 
iii.  “Digital Service” shall refer to a service that allows the consumer to create, 
31 
process, store, or access data in digital form or allows the sharing of or any other 
32 


11 
 
interaction with data in digital form uploaded or created by the consumer or 
1 
other users of that service; 
2 
iv. “Interoperability” shall be defined as the ability of the digital content or digital 
3 
service to function with hardware or software different from those with which 
4 
digital content or digital services of the same type are normally used; 
5 
v. “Functionality” shall be defined as the ability of the digital content or digital 
6 
service to perform its functions according to its purpose; and  
7 
vi. “Compatibility” shall be defined as the ability of the digital content or digital 
8 
service to function with hardware or software with which digital content or digital 
9 
services of the same type are normally used, without the need to convert the 
10 
digital content or digital service. 
11 
 
12 
CHAPTER III 
13 
DIGITAL PAYMENT PORTALS 
14 
Sec. 13. Digital Payments. –  Online eCommerce Platforms and Online Merchants shall 
15 
issue paper or electronic invoices or receipts for all sales. An electronic invoice or receipt shall 
16 
have the same legal effect as a physical invoice or receipt. 
17 
Within sixty (60) days from the effectivity of this Act, the Bureau of Internal Revenue 
18 
shall, in coordination with the Bureau of Customs, issue rules and regulations that modernize 
19 
and streamline the regulatory framework and encourage the adoption of electronic payment 
20 
systems by the citizenry. The DTI and the Bangko Sentral ng Pilipinas shall also develop 
21 
guidelines to protect merchants and consumers covering the various digital payment solutions. 
22 
CHAPTER IV 
23 
RIGHT TO REDRESS, REMEDIES, AND PENALTIES 
24 
Sec. 14. Right to Redress by Online Merchants. –  Where the online merchant is liable 
25 
to the consumer because of a lack of conformity with the contract resulting from an act or 
26 
omission by a person in earlier links of the chain of transactions, the online merchant is entitled 
27 
to pursue remedies against the person or persons liable in the chain of transactions. 
28 
 
29 
The person against whom the online merchant may pursue remedies and the relevant 
30 
actions and conditions to exercise must be in accordance with the following: 
31 


12 
 
a. A repair or replacement must be completed within a reasonable time and without any 
1 
significant inconvenience to the consumer, taking into account the nature of the goods 
2 
and the purpose for which the consumer acquired the goods; 
3 
b. A proportionate reduction of the price or the termination of the contract, including 
4 
restitution of the price, in the following instances: 
5 
i. A repair or replacement is impossible or unlawful; 
6 
ii. The online merchant has not completed repair or replacement within a 
7 
reasonable time; 
8 
iii. A repair or replacement may cause significant inconvenience to the consumer; 
9 
or 
10 
iv. The online merchant has declared, or it is equally clear from the circumstances 
11 
that the online merchant may not bring the goods in conformity with the 
12 
contract within a reasonable time; 
13 
c. The consumer is entitled to withhold the payment of any outstanding part of the price, 
14 
until the online merchant has brought the goods into conformity with the contract; 
15 
d. The consumer is not entitled to a remedy to the extent that the consumer has 
16 
contributed to the lack of conformity with the contract or its effects; 
17 
e. Where the online merchant remedies the lack of conformity with the contract by 
18 
replacement, the online merchant may take back the replaced goods at the online 
19 
merchant’s expense unless the parties have agreed otherwise after the lack of 
20 
conformity with the contract has been brought to the online merchant’s attention by 
21 
the consumer; 
22 
f. Where the consumer had installed the goods in a manner consistent with their nature 
23 
and purpose, before the lack of conformity with the contract became apparent, the 
24 
cost for the removal of the non-conforming goods and the installation of replacement 
25 
goods, and all associated costs shall be for the account of the online merchant; 
26 
g. In case of goods that do not conform to the contract, the consumer is not liable to pay 
27 
for using the non-conforming goods prior to its replacement; 
28 
h. The consumer may choose between repair and replacement unless the option chosen 
29 
is impossible, unlawful or, imposes costs upon the online merchant that is 
30 
disproportionate, taking into account all circumstances, including: 
31 
i. 
The value the goods would have if the goods conformed to the contract; 
32 
ii. The significance of the lack of conformity with the contract; and 
33 
iii. Whether the alternative remedy may be completed without significant 
34 
inconvenience to the consumer. 
35 


13 
 
Sec. 15. Right to Terminate the Contract. – If the goods delivered do not conform to 
1 
the contract, the consumer may exercise the right to terminate the contract by giving notice 
2 
to the online merchant. Where the lack of conformity relates to only some of the goods 
3 
delivered under the contract, the consumer may terminate the contract only in relation to the 
4 
non-conforming good and any other goods which was acquired as an accessory it Where the 
5 
consumer terminates a contract as a whole or in relation to some of the goods delivered: 
6 
A. The online merchant shall reimburse to the consumer the price paid without undue 
7 
delay and in any event not later than fourteen (14) days from receipt of the notice; 
8 
B. Upon receipt of the reimbursement from the online merchant, the consumer shall 
9 
return, at the online merchant’s expense, the goods without undue delay and in 
10 
any event not later than fourteen (14) days from the receipt of the reimbursement; 
11 
C. Where the goods cannot be returned because of destruction or loss, the consumer 
12 
shall pay to the online merchant the monetary value which the non-conforming 
13 
goods would have had at the date when the return was to be made if they had 
14 
been kept by the consumer without destruction or loss until that date, unless the 
15 
destruction or loss has been caused by a lack of conformity with the goods with 
16 
the contract; and 
17 
D. The consumer shall pay for a decrease in the value of the goods only to the extent 
18 
that the decrease in value exceeds depreciation through regular use. The payment 
19 
for decrease in value shall not exceed the price paid for the goods. 
20 
 
21 
Sec. 16. Damages. – The online merchant is liable for damages to the consumer due 
22 
to the lack of conformity with the contract of the goods: Provided that, the lack of conformity 
23 
becomes apparent within two (2) years from the relevant time of establishing conformity. 
24 
Provided further that, no damages may be recovered from this Act after the lapse of four (4) 
25 
years from the time the conformity has been established. 
26 
Sec. 17. Online Dispute Resolution. – The DTI shall develop an online dispute 
27 
resolution (ODR) platform which is a single point of entry for consumers, online merchants 
28 
and traders seeking out-of-court resolution of disputes. 
29 
Sec. 18. Joint and Solidary Liability. – Online eCommerce platforms shall share solidary 
30 
liability with an online merchant under the following instances: 
31 
a. If the online eCommerce platform fails to exercise ordinary diligence to prevent 
32 
any loss or damage to the consumer; 
33 


14 
 
b. If the identity of the online merchant and the online eCommerce platform is the 
1 
same; 
2 
c. If the online eCommerce Platform Provider knows or should have known, as when 
3 
it is apparent, that the online products sold do not comply with law, or otherwise 
4 
infringes on intellectual property rights, and fails to take necessary measures. 
5 
Liability shall not attach to the online eCommmerce Platform Provider in instances 
6 
when the illegality or infringing nature of the online products advertised, offered 
7 
for sale, or sold through the online eCommmerce Platform are not apparent, 
8 
provided that: 
9 
(i) the online eCommmerce Platform contains a simple and straightforward 
10 
procedure for consumers, rights-holders or online merchants to report the 
11 
existence of illegal or infringing materials in the Platform;  
12 
(ii) the policy of implementing the procedure has been properly relayed to the 
13 
consumers, rights holders or online merchants; and  
14 
(iii) any report of illegal or infringing products shall be expeditiously acted 
15 
upon through investigations, suspensions, and takedown measures, if 
16 
necessary, by the online eCommmerce Platform Provider. 
17 
d. If the online eCommerce platform fails to publish the details of its online 
18 
merchants, as required under this Act; 
19 
e. If the online eCommerce Platform fails to ensure regulatory compliance of digital 
20 
products related to food, drugs, and cosmetics or otherwise relates to the life or 
21 
health of consumers; and 
22 
If an online merchant is not duly regist red with the appropriate regulatory agencies 
23 
and the online eCommerce platform permits the online merchant to sell digital 
24 
products. 
25 
Sec. 19. Penalties. –  
26 
a. Online merchants found guilty of violating Sec. 7, paragraph (B) of this Act or who 
27 
fail to register either as a sole proprietor, one-person corporation, partnership, 
28 
corporation, or cooperative, shall be punished with a fine equivalent to one 
29 
hundred percent (100%) of the amount of the digital goods offered or sold based 
30 
on the market price as determined by the Bureau, including confiscation of the 
31 
digital products as advertised, and forfeiture of license; and 
32 


15 
 
b. Online eCommerce platforms and online merchants, except those who are 
1 
considered as Micro, Small or Medium Enterprises (MSMEs) under existing laws 
2 
and regulations, who are found guilty of violating Sec. 10 or 11 of this Act shall be 
3 
punished with a fine not less than Five Hundred Thousand Pesos (P500,000.00) 
4 
but not more than Five Million Pesos (P5,000,000.00) or the revocation of their 
5 
licenses, or both, at the discretion of the court. 
6 
c. Online merchants who are considered as MSMEs, under existing laws and 
7 
regulations, found guilty of violating Section 11 of this Act shall be punished with 
8 
a fine of not less than fifty thousand pesos (P50,000.00) but not more than Two 
9 
Hundred Thousand Pesos (P200,000.00), at the discretion of the court. 
10 
Online merchants who are considered as Micro, Small, or Medium Enterprises (MSMEs) 
11 
found guilty of violating this Act shall be punished with a fine of not less than fifty thousand 
12 
pesos (P50,000.00) but not more than Two Hundred Thousand Pesos (P200,000.00), at the 
13 
discretion of the court. 
14 
CHAPTER V 
15 
OTHER MATTERS 
16 
 
17 
Sec. 20. Tax Exemption for Newly Registered eCommerce Enterprises. –  Newly 
18 
registered MSMEs, as defined under existing laws, and which are engaged in eCommerce shall 
19 
be exempt from all national and local taxes for the first three (3) years of operation under the 
20 
following conditions: 
21 
a. The enterprise is not an affiliate, subsidiary, or a franchise of any existing company; 
22 
b. In the case of a sole proprietorship, one-person corporation or partnership, it does 
23 
not have any previous or other existing registered companies, partnerships, or 
24 
businesses; and 
25 
c. In the case of a corporation, each stockholder of the eCommerce enterprise must 
26 
have at least a five percent (5%) share in stocks and the corporation must have 
27 
no nominal stakeholders or stockholders holding the shares in trust for others: 
28 
Provided, That all stockholders of the corporation shall not have held shares of a 
29 
previous or existing corporation with at least a five percent (5%) share therein, 
30 
nor registered any former or existing sole proprietorship or partnership. 
31 
 
32 
Sec. 21. Code of Conduct. – All businesses engaged in eCommerce are expected to 
33 
act responsibly and consistent with the following principles: 
34 


16 
 
a. Treat consumers with honesty, integrity, fairness, and refrain from engaging in 
1 
illegal, fraudulent, unethical, or unfair business practices that harm consumers, as defined in 
2 
Title II, Chapter III of Republic Act No. 7394 otherwise known as the “Consumer Act of the 
3 
Philippines”, and to faithfully comply with all requirements of said law, its implementing rules 
4 
and regulations, and related laws and issuances, and to apply and recognize the rights of 
5 
consumers equally; 
6 
b. Comply with Republic No. Act 7394, Republic Act No. 8792, Republic Act No. 10175, 
7 
Republic Act No. 10667, Joint DTI-DOH-DA Administrative Order No. 1, NTC Memorandum 
8 
Circular No. 05-06-2007, and other applicable laws and regulations; 
9 
c. Ensure that goods and services marketed and sold online to Philippine consumers, 
10 
especially food, drugs, cosmetics, and devices that are hazardous to consumer health and 
11 
safety, conform to Philippine regulatory standards and provide accurate information about the 
12 
digital products in Filipino and English; 
13 
d. Ensure that the safety of digital products marketed or sold online are not 
14 
compromised and that products that have been recalled in the offline retail market are not 
15 
marketed or sold online; 
16 
e. Ensure that all representations and information on digital products or services are 
17 
truthful and should be easily accessible, complete, and correct through fair advertising and 
18 
marketing practices; 
19 
f. Ensure transparency to consumers about costs and avoid any hidden charges or 
20 
additional costs such as customs duties, currency conversion, and shipping, or delivery fees; 
21 
g. Allow for tracking of deliveries on both parties, provide complete record of the goods 
22 
purchased, and have them delivered within the promised time and condition; 
23 
h. Any personal data or privileged information supplied by consumers or online 
24 
merchants shall be treated as confidential and shall not be used for purposes not authorized 
25 
by the data subjects.  Upon collection and processing of such data, the data subjects shall be 
26 
informed of their right to privacy and the manner by which their data will be protected.  All 
27 
personal data controllers and processors of the personal data shall strictly comply with all 
28 
applicable data privacy laws and regulations including Republic Act No. 10173, otherwise 
29 
known as the “Data Privacy Act of 2012” its implementing rules and regulations as well as 
30 
issuances of the National Privacy Commission, and other similar related laws and regulations; 
31 


17 
 
i.  Offer cancellation options in order that consumers may be able to review their online 
1 
orders before finally confirming their purchase, and be able to withdraw from a confirmed 
2 
transaction in appropriate circumstances; 
3 
j. Take consumer complaints seriously and address them fairly by instituting 
4 
comprehensive and equitable mechanisms for consumer redress through easy, fair, and 
5 
transparent methods, and provide compensation, refund, repair, and replacement, if 
6 
warranted; 
7 
k. Ensure the safety and security of online payments and safeguard sensitive data by 
8 
using secure technology and protocols, as evidenced by visible trust certificates and by 
9 
complying with all applicable banking laws, such as but not limited to, Republic Act No. 11127 
10 
or the “National Payment Systems Act”, as well as the guidelines, rules and regulations of the 
11 
Bangko Sentral ng Pilipinas; 
12 
l. Provide the consumer readily accessible configurations allowing the consumer to 
13 
choose whether they wish to receive or opt-out from commercial messages by email or 
14 
electronic means; and 
15 
m. Provide consumers with options to report fraudulent, infringing, or other types of 
16 
illegal goods and services promoted, offered for sale, or sold in Online eCommerce Platforms, 
17 
and for such reports to be acted on expeditiously. 
18 
Whenever appropriate, the DTI shall issue the corresponding rules and regulations in 
19 
accordance with the international best practices. 
20 
Sec. 22. eCommerce Philippine Trustmark. – To provide assurance of safety and 
21 
security in internet transactions, an eCommerce Philippine Trustmark shall be developed for 
22 
online merchants. 
23 
a. The DTI is tasked to create an eCommerce Philippines Trustmark to be 
24 
administered and managed by an industry-led private sector governance body; 
25 
b. The industry-led governance body comprises the following: 
26 
(i) 
Two (2) representatives from the digital platforms; 
27 
(ii) Two (2) representatives from the payment gateways; 
28 
(iii) Two (2) representatives from the logistics services; 
29 
(iv) Two (2) representatives from other enablers; and 
30 
(v) One (1) representative from the public sector. 
31 


18 
 
c. An eCommerce Philippine Trustmark on the website of an online merchant 
1 
signifies that the company is committed to the Code of Conduct stipulated in 
2 
Section 8 of this Act, guaranteeing ethical standards in the digital marketplace; 
3 
d. In the case of a complaint involving the purchase of their products or services, 
4 
those companies with the trust mark shall give consumers the option of filing claims 
5 
through the trust mark portal, if the company’s customer care service has not been 
6 
able to resolve the issue; and 
7 
e. The eCommerce Philippines Trustmark shall be linked to DTI’s online ODR. 
8 
For purposes of this Act, “eCommerce Philippine Trustmark” shall refer to the mark 
9 
approved by the eCommerce Bureau that assures consumer protection for online transactions 
10 
and consumer complaints. 
11 
Sec. 23. Implementing Rules and Regulations. – Upon the effectivity of this Act, the 
12 
necessary rules and regulations shall be issued by the DTI, in coordination with the DOH, DA, 
13 
IPO, SEC, OMB, PNP and BSP, within sixty (60) days. 
14 
Sec. 24. Repealing Clause. – All laws, decrees, orders, rules and regulations or other 
15 
issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed or 
16 
modified accordingly.  
17 
Sec. 25. Separability Clause. – If any portion or provision of this Act is declared 
18 
unconstitutional, the remainder of this Act or any provision not affected thereby shall remain 
19 
in force and effect.  
20 
 
Sec. 26. Effectivity. – This Act shall take effect after fifteen (15) days following the 
21 
completion of its publication either in the Official Gazette or in a newspaper of general 
22 
circulation in the Philippines. 
23 
Approved,