E-commerce law to protect consumers, boost Internet economy

By Zaldy De Layola

October 26, 2022, 1:19 pm

<p>Davao City 1st District Rep. Paolo Duterte <em>(File photo)</em></p>

Davao City 1st District Rep. Paolo Duterte (File photo)

MANILA – Davao City 1st District Rep. Paolo Duterte on Wednesday sought the immediate creation of an E-Commerce Bureau, under the Department of Trade and Industry (DTI), with enough powers and functions to safeguard online transactions and help promote a robust Internet-based economy in the country.

Duterte said his proposed measure, House of Representatives Bill (HB) 3050 or the Internet Transaction Act of 2022, would complement the newly enacted SIM Registration Law that mandates the registration of Subscriber Identity Modules (SIMs).

While the SIM Registration Law and the proposed HB 3050 both aim to protect consumers from fraud, the latter provides additional protection to e-commerce consumers and merchants alike, he said.

Duterte said the bill also promotes trust and accountability in the country’s e-commerce market intended to further accelerate the growth of this sector, and encourage micro, small and medium enterprises (MSMEs) to take advantage of digital innovations to expand their businesses.

“In order to protect the merchant and the consumer, an effective regulation of commercial activities through the Internet or electronic means must be established,” he said in his bill’s explanatory note.

“This is 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 product standards and safety are observed.”

Under this measure, the e-commerce division currently set up in the DTI will be abolished and replaced by an E-Commerce Bureau.

The E-Commerce Bureau will also be authorized, among others, to mandate e-commerce entities to register in the DTI’s Online Business Registry; identify regulatory gaps affecting the e-commerce industry and recommend appropriate executive or legislative measures to foster this sector’s growth; and act as a virtual one-stop shop tasked to receive, address and facilitate the speedy resolution of consumer complaints on unresolved Internet transactions.

Duterte noted that as a result of the pandemic, online retail and other e-commerce services are slowly becoming the norm in the day-to-day lives of many Filipinos, who have found conducting contactless transactions easy and convenient.

The 2021 e-Conomy report for Southeast Asia by Google and Temasek found the Philippines the fastest-growing e-commerce market in the region.

The country has seen 12 million new digital consumers since the start of the pandemic up to the first half of 2021, of which 63 percent are from non-metro areas and 99 percent say that they intend to continue using digital services going forward, the study said.

According to the study, the gross merchandise value of the Philippines’ Internet economy is expected to reach USD17 billion in 2021, or a 93 percent year-on-year surge, and up to USD40 billion in 2025.

Duterte said these projections, as well as the study’s findings that the Philippines still has the lowest digital consumer penetration in the region at only 68 percent of Internet users, underscore the need for Congress to pass a law to both safeguard and promote Internet transactions.

Establishing the DTI’s E-Commerce Bureau and according it with the appropriate powers and responsibilities will help “build trust between online merchants and consumers via secure and reliable e-commerce platforms where goods and services are transacted with transparency and utmost efficiency,” he said.

Duterte noted that transparency and efficiency, in turn, would encourage the creation of new products and services, and even business models and processes.

Aside from acting on consumer complaints, the E-Commerce Bureau under Duterte’s measure is also empowered to take down, either temporarily or permanently, any product listing, webpage, business page, application, social media post, profile, website, or any other online platform found violating the bill’s provisions or the Consumer Act of the Philippines.

The bill authorizes the E-Commerce Bureau to issue an advisory that no entity shall process payments made to any violating entity to ensure that the latter shall be rendered commercially inoperative.

It also specifies the obligations and rights of digital platforms, online merchants, and consumers; determines the penalties for violating such rights and obligations; and seeks the development of an E-Commerce Philippine Trustmark to provide assurance and security in transactions over the Internet. (PNA)