Strict regulation of e-commerce
Last week, the Department of Trade and Industry (DTI) announced that the Internet Transactions Act of 2023 (Republic Act No. 1197) became effective on June 20 after the transitory period provided for in the law lapsed.
The law aims to protect consumer rights and data privacy in, among others, “… digital platforms whose business is to connect online consumers with online merchants, facilitate the shipment of goods or provide logistics services.”
Its enactment is in response to numerous complaints in the past about consumers being shortchanged or hoodwinked by e-marketers and that the victims did not have an avenue for redress of their complaints.
Henceforth, all those platforms are required to disclose their price, brand name, description, condition and the seller’s contact details for all goods and services they offer.
If they refuse to do so, the DTI can order the takedown of their platform or be publicly blacklisted so the public is alerted about their refusal to comply with the registration requirement. Invariably, the refusal puts serious doubt on the legitimacy of their operation.
Aware of the global expanse of online or internet-based commerce, the law, in a sharp departure from traditional domestic application of laws, has extraterritorial application. This means it covers persons engaged in e-commerce based outside of the Philippines who avail of the Philippine market to the extent of establishing minimum contracts here in the country.
Thus, if any of their actions violate Philippine laws or regulations, they cannot evade liability from such breach despite their lack of legal or physical presence in the Philippines, which is the usual defense of entities based abroad when they run afoul with our laws.
To put on notice the affected e-commerce participants about its intentions or objectives, the law spells out in detail their obligations and responsibilities to their intended market.
For example, e-markets should ensure that their transactions are (a) clearly identifiable as an e-commerce transaction; (b) the identity of the person or persons on whose behalf the transaction is made is disclosed; and (c) any promotional offer of discount, premium, gift and the conditions required to qualify for it are accessible and clear.
Through its E-Commerce Bureau, the DTI will act on complaints of irregularities in online commercial transactions and protect legitimate local entrepreneurs and micro- and small-scale merchants from unfair competition and illegal trade.
If goods or services that are prohibited or regulated under existing laws, such as endangered animals, illicit drugs, explosives and counterfeit drugs, are being offered for sale or lease, the DTI secretary may, without prior notice to the affected party, order the immediate takedown of the platform concerned.
The affected platform has 48 hours from the issuance of the takedown order to contest it and give its side.
While ordering the takedown may be a reasonable move, there is no assurance, however, that it would be obeyed or implemented by the errant platform. And even if ostensibly that order is complied with, there is no stopping the barred material from resurrecting itself elsewhere in other platforms in another format.
There is no dearth in marketing ideas that can effectively exploit or take advantage of the gullibility of some Filipinos who easily fall for glitzy advertisements produced through AI (artificial intelligence).
More in point, it is doubtful if e-marketers based in China, which is the epicenter of knockoffs and adulterated products, would willingly cease and desist from posting their offers if ordered to do so by the DTI. Like their government, they simply cannot be trusted.
It’s a catch-me-if-you-can scenario that the DTI may have to contend with for digital platforms that operate from foreign bases.
