Atty. Mark Gorriceta and Micaela Kristina Galvez l June 28, 2024 l The Manila Times
THE e-commerce market has seen steady yearly growth and is expected to experience the same moving forward, in large part due to the increasing consumer preference for online shopping. Recognizing the need to ensure the sustainability of this thriving market, our legislators enacted Republic Act 11967, or the Internet Transactions Act (ITA). This act is supplemented by the recent issuance of the Department of Trade and Industry (DTI), Department of Information and Communications Technology, National Privacy Commission, Department of Agriculture, Department of Health, and the Bangko Sentral ng Pilipinas — the ITA Implementing Rules and Regulations (IRR), which aim to provide further guidance and protection to the key parties in Internet Transactions.
Scope, coverage, and regulatory jurisdiction of the DTI
The ITA applies to all business-to-business (B2B) and business-to-consumer (B2C) 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 Philippine market and has minimum contacts. For further clarity, it excludes online media content and consumer-to-consumer (C2C) transactions. Despite this, the ITA still fell short in clearly defining its scope due to the ambiguity of certain terms — namely, (1) Internet Transactions, (2) “availing of the Philippine market” and “minimum contacts,” and (3) online media content.
With the issuance of the ITA IRR, the regulation addresses the foregoing concern on ambiguity by defining Internet Transactions and E-Commerce as covering not only the sale and lease of goods but also all other commercial transactions done online. The ITA IRR also defines “availment of the Philippine market” as any conduct indicating an intention to transact with persons located in the Philippines and “minimum contacts” as any touchpoint or interaction with any potential or actual customer in the Philippines.
In effect, any B2B or B2C commercial transaction done online is covered by the ITA so long as the seller or the buyer is in the Philippines, or the digital platform or website, which allowed the Internet Transaction, can be accessed in the Philippines. Online sellers and buyers, and digital platforms must therefore comply with the provisions of the ITA and its IRR, including the Codes of Conduct for E-commerce and Online Consumers (Codes of Conduct).
Codes of Conduct
The ITA IRR provides for the E-Commerce Code of Conduct and the Online Consumer Code of Conduct, that will promote trust in e-commerce and uphold the interest of consumers. Parties in Internet Transactions are called to act with justice, give everyone his due, and observe honesty and good faith. Notable obligations found in these Codes of Conduct are the obligations of transparency and accuracy of information, tracking of deliveries, compliance with product standards, laws, and regulations, ensuring the security of personal data, and the prohibition on the making of false and fraudulent claims.
All of these address the common pain points of the average consumer engaged in e-commerce. Through these Codes of Conduct, consumers are, on one hand, elevated to an even playing field with online merchants and, on the other, called to avoid abusing the protection offered by the ITA. While merely serving as a guide, these Codes of Conduct nevertheless serve as a step forward to developing a sustainable e-commerce market.
Compliance
The broad scope of the ITA and ITA IRR calls for all affected entities — both onshore or offshore — to comply with the legal requirements of the ITA. According to the ITA, all affected entities have a period of 18 months from the effectivity of the ITA to comply with its provisions. The ITA IRR, however, makes it clear that this 18-month transitory period does not suspend or prohibit the enforcement of other applicable laws.
Compliance with the ITA entails the continuous improvement of capabilities and services, allowing for more transparency and accurate transfer of information, the adoption of internal mechanisms for online consumers to seek redress for all forms of conduct inconsistent with the ITA, and the adoption of policies that create a safer environment for online consumers. While daunting at first glance, this progressive development toward a safer online environment will inevitably build trust among stakeholders and ultimately generate long-term value for all.
*** Atty. Mark S. Gorriceta is the managing partner and head of the corporate group and head of the technology media and telecommunications group of Gorriceta Africa Cauton & Saavedra (Gorriceta) www.gorricetalaw.com. He has been recognized as one of the country’s Top 100 Lawyers from 2020 to 2023 by the Asian Business Law Journal. Atty. Micaela Kristina V. Galvez is a partner at Gorriceta, head of the intellectual property group, and member of the corporate and TMT practice groups. The firm represented by Atty. Gorricetta is a member of the Financial Executives Institute of the Philippines’ (Finex).
The views and opinions expressed above are those of the author and do not necessarily represent the views of Finex. Photo from Pinterest.