It is not news that the digital evolution has propelled the generation of a new ecosystem for commerce.
The internet has revolutionized the conduct of business as it has allowed new platforms for buyers and sellers to meet. Electronic commerce (e-commerce) continues to evolve to provide a more secure, smooth, and fast processing of transactions and a more personalized and convenient user experience.
Recognizing the value and potential of the digital economy, the Philippines has enacted a new law seeking to promote and maintain a robust e-commerce environment.
On 5 December 2023, President Ferdinand R. Marcos Jr. signed Republic Act 11967, known as the Internet Transactions Act of 2023, or ITA.
The ITA was enacted to regulate e-commerce, protect consumer rights and data privacy, encourage innovation, promote competition, secure internet transactions, uphold intellectual property rights, ensure product standards and safety compliance, and observe sustainability.
The ITA will take effect 15 days from its publication. However, all affected online merchants, e-retailers, e-marketplaces and digital platforms have 18 months from the effectivity of the ITA to comply with the requirements of the law.
The ITA covers business-to-business and business-to-consumer internet transactions, where one of the parties is situated in the Philippines or where the digital platform, e-retailer, or online merchant is availing of the Philippines and has minimum contacts therein.
The E-Commerce Bureau was created to implement the provisions of the ITA. Among its powers and functions, the E-Commerce Bureau is tasked to investigate, motu proprio, and recommend the filing of the appropriate cases for violations of the ITA and receive and refer business and consumer complaints on internet transactions to the appropriate government agency.
The ITA shall be under the Department of Trade and Industry, or DTI, which is granted regulatory jurisdiction on internet use for conducting e-commerce by e-marketplaces, online merchants, e-retailers, digital platforms, and third-party platforms. The DTI Secretary is also granted the power to issue summonses, subpoenas ad testificandum, and subpoenas duces tecum, to alleged violators or witnesses to compel attendance and the production of documents in investigations or proceedings before the E-Commerce Bureau.
Notably, the DTI Secretary, after investigation or verification, is authorized to issue an ex-parte takedown order directing the removal of a listing or offer on a webpage, website, platform, or application on the sale or lease of goods or services, which are prohibited or regulated, the subject of a cease and desist order, or previously the subject of a takedown order, and such other transactions or activities online purporting to sell or lease goods or services that threaten public or personal safety, compromises financial or personal information.
The takedown order shall remain for a maximum period of 30 days unless otherwise extended or made permanent by a judicial order or decision.
The violating entity shall be given an opportunity to be heard within 48 hours from the issuance of a takedown order. The DTI may also establish a publicly accessible list of websites, webpages, online applications, social media accounts, or other similar platforms that fail to comply with a compliance order or are the subject of a takedown order or cease and desist order issued by an appropriate government agency.
The DTI is also tasked to develop an online platform to facilitate an alternative mode of dispute resolution for online consumers, merchants, e-retailers, e-marketplaces, and other digital platforms.
Further, the DTI, in consultation with the relevant government agencies, is mandated to provide a Code of Conduct for all businesses engaged in e-commerce consistent with international trends, developments, standards, and best practices.
In my next article, I will discuss the obligations of each party in internet transactions and the remedies of online consumers under the ITA.
