Two years into the Covid-19 pandemic, we’ve seen how consumers have transitioned from being traditional business buyers to being online shoppers. In fact, online transactions provide a more convenient way for consumers to make use of goods and services.
With the rise of online businesses, there is also the need to regulate them in order to protect the rights and interests of consumers. In this regard, several government agencies – the Department of Trade and Industry (DTI), the Department of Agriculture, the Department of Health, the Department of Environment and Natural Resources, the Intellectual Property Office of the Philippines, and the National Privacy Commission – have issued a Joint Administrative Order (JAO) 22-01 dated 4 March 2022 (Guidelines for Online Businesses repeating the laws and regulations applicable to online businesses and consumers) which provides guidance for online businesses based on existing laws and regulations and lists a non-exhaustive list of penalties for violations.
Online business commitments
It is the duty of online businesses to comply with all Philippine laws, rules, and regulations, and consumer rights that are equally valuable as transactions made through traditional means.
First, JAO reminds online sellers of the laws and regulations that protect online consumers from health and safety risks. It also reiterates that online sellers are prohibited from engaging in deceptive and/or unfair acts and selling practices as set forth in Republic Act (RA) 8923 or the Intellectual Property Act of the Philippines. These include false advertisements, misrepresentations, and take advantage of consumer conditions, among others.
Online businesses are also reminded that it is their responsibility to comply with warranty terms, labeling requirements and price tag placements under RA 7394 or the Philippine Consumer Code and other relevant laws. Accordingly, product listings on online platforms and marketplaces shall display the price of products or services, payment policies, delivery options, returns, refunds and exchange policies, and other details. If a seller informs consumers of the price of his products through direct messages, rather than a public listing, that act will be considered a violation of the Price Tag Act (Section 81, Consumer Code of the Philippines).
If the merchandise is regulated items, online businesses must show the corresponding license or permit number as specified by the relevant government agencies. However, in no case is an online seller allowed to sell goods or services that are prohibited by law, such as counterfeit products, precious metals, antiques, and weapons.
Consumer information security is also enforced by applying the provisions of RA 10173 or the Data Privacy Act to online businesses. For this purpose, JAO emphasizes that personal information collected by online electronic vendors, merchants or retailers should be kept and processed only for legitimate purposes. It is also the responsibility of online businesses to implement reasonable and appropriate security measures to ensure that data collected is not used for purposes other than what the consumer consented to.
Responsibilities of online sellers, e-commerce platforms, or marketplaces
According to the Consumer Law of the Philippines, online businesses are held liable when the products supplied are defective and the manufacturer of the product cannot be correctly identified. Furthermore, penalties will also be imposed under the intellectual property law of the Philippines if an online business is found to be involved in the sale of counterfeit and/or pirated goods.
It is worth noting that JAO imposes additional obligations on e-commerce platforms or marketplaces and treats them in the same way that it treats online sellers, merchants or e-commerce retailers, in terms of obligations. As such, e-commerce or marketplace platforms have a duty to verify and ensure that the merchandise being sold on their platforms is authentic and not banned.
In the event of an apparent breach of any relevant laws or regulations committed in an online posting by a seller, online merchant, electronic retailer, e-commerce platform, e-marketplace and the like, the relevant government entity must issue a notice giving a maximum of three (3) ) days to delete the post. If the violator does not drop the mail within the stipulated period, this act is considered intentional and leads to an aggravation of the crime attributed to him.
Likewise, JAO extends liability to delivery platforms upon notice that they are carrying or delivering prohibited, prohibited, or violating items.
In the event of violations, online consumers have a remedy by submitting their complaints to the Ministry of Commerce and Industry, through written or electronic means.
Senate Bill 2489, or “Online Transactions Act”
As the Civil Aviation Office (JAO) standardizes existing rules and regulations applicable to online businesses, it is still necessary to enact national legislation in light of the continued growth of the digital economy. In fact, Senate proposed Bill 2489, or the “Internet Transactions Act,” is pending before Congress. This proposed bill aims to promote the growth of e-commerce in the country and ensure sustainable and fair trade market practices in the country.
Aziza Hanna A. Bakay is a fellow of Mata Perez, Tamayo and Francesco (MTF Consultant). This article is for general information only and is not a substitute for professional advice when facts and circumstances warrant. If you have any question or comment regarding this article, you can email the author at [email protected] Or visit the MTF website at www.mtfcounsel.com.