House OKs bill regulating e-commerce industry on 2nd reading

The House of Representatives on Wednesday approved on second reading the measure that seeks to regulate transactions in the e-commerce industry in the country and ensure and promote the protection of consumers doing online transactions.

During its plenary session, the chamber approved House Bill 7805, or the proposed "Internet Transactions Act," which also creates the Electronic Commerce Bureau to manage e-commerce activities that are currently not being regulated.

The measure primarily aims to promote and maintain a robust e-commerce environment in the country and build trust between online sellers and buyers through secure and reliable e-commerce platforms.

At the same time, it also seeks to establish an effective regulation of e-commerce activities to protect consumer rights and data privacy, as well as to encourage innovation and fair advertising practices.

Covered under the measure are all business-to-business and business-to-consumer e-commerce and Internet transactions including those related to internet retail of consumer goods and services, online travel services, online media providers, ride hailing services, and digital financial services.

Consumer-to-consumer transactions, however, are not covered under the measure.

If enacted into the law, the measure will establish the E-Commerce Bureau which will have the authority over activities conducted over the Internet.

The bureau will also spearhead the development of an online dispute platform through which consumers and online merchants can raise and resolve disputes.

The bill presumes the following as legally authorized to engage in e-commerce in the Philippines:

• an individual duly licensed to do business as a single-proprietor with the Department of Trade and Industry (DTI);
• a juridical entity duly registered with the Securities and Exchange Commission, whether as a corporation, a one-person corporation, or as a partnership;
• a cooperative duly licensed by the Cooperative Development Authority;
• a foreign corporation duly licensed by the SEC to transact business in the Philippines; and
• a non-resident foreign individual or juridical entity who can set up a domestic corporation or branch office in the Philippines, can appoint a resident agent, or can notify and submits its contact details to the E-Commerce Bureau.

The measure also mandates the creation of a code of conduct for all businesses engaged in e-commerce stipulating the obligations of the online selling platforms and responsibilities of the online merchants in order to build trust and protect the interests of consumers.

The DTI is also mandated under the measure to establish an industry-led E-commerce Trustmark to assure safety and security in Internet Transactions.

Online merchants who fail to register will be made to pay a fine equivalent to 100% of the amount of the digital goods they offer or sold to the market.

Meanwhile, consumers who will be found guilty of breaking the law will be meted with a fine of up to P50,000, while erring platform operators and online merchants will be fined from P500,000 to P5 million, or their licenses will be revoked. — BM, GMA News