Bill creating bureau regulating internet transactions hurdles final reading in House

The House of Representatives has approved on third and final reading a bill creating an Electronic Commerce Bureau (eCommerce Bureau) which will regulate internet transactions.

House Bill 4, approved unanimously Monday night with 245 affirmative votes, provides that the eCommerce Bureau will be the virtual central authority which will receive and address consumer complaints on internet transactions.

Likewise, the bill mandates eCommerce Bureau to develop an online dispute resolution platform which will be the single point of entry for consumers and online merchants seeking out-of-court resolution of disputes.

It also tasks the eCommerce Bureau to establish, manage, and maintain a Registry of Online Business which will provide consumers  access  to  data and information of registered online business entities for purposes of verifying the validity, existence of and other relevant information pertaining to business entities.

A code of conduct for all businesses engaged in eCommerce which stipulates the obligations of eCommerce platform operators and specifies the responsibilities of on-line merchants of goods is also provided by the bill, since merchants are expected to act responsibly to build trust in internet transactions and to protect and uphold the interest of consumers at all times.

As to the specific limited liability of online platforms, the bill provides the following:

•     online platforms will be solidarily liable with an online merchant to the consumer only to the extent of civil damages suffered by the consumer as a direct result of the transaction, and
•     online platforms will be liable for civil and administrative indemnity with online merchants only under the following instances: (1) failure to exercise ordinary diligence;  (2) failure to  remove goods  or services not compliant with law; permission to an online merchant not authorized to do business in the Philippines.

Online platforms, on the other hand, will not be held liable under the following instances:

•     reliance on the authenticity of an online merchant's representations, warranties, or registration documents even if such information are later proved to be false, provided that the online operator is able to show evidence of good faith, and
•     reliance on the representations, warranties or submissions of an online merchant stating that it is valid under the laws of the Philippines or conform to applicable laws, rules and regulations.

“The State recognizes the value and potential of the digital economy to increase competition and improve productivity, thus the need to establish secure and reliable eCommerce platforms where goods and services are transacted online with appropriate transparency and utmost efficiency to encourage the creation of new products, services, business models, and processes,” the bill read.

“Towards these ends, the state should ensure an effective regulation of commercial activities through the internet or electronic means 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 where product standards and safety are observed,” it added.—AOL, GMA Integrated News