Member Article

The electronic commerce industry is expected to expand by five to seven percent in the coming years while the streaming services business is also expected to exponentially grow, with more and more Filipinos opting to do their transactions online, as well as accessing Internet-based content and entertainment. Philippine authorities are inevitably focusing their regulatory gaze on these enterprises. 

A. Philippine Congress Pushes for Internet Transactions Act, Targets Non-Resident Online Platforms In light of the growth of electronic commerce (eCommerce) and the increase in online sales brought about by the COVID-19 pandemic, the Philippine Congress has shown even greater interest in regulating internet transactions. Two bills currently pending at the committee level of both houses of Congress – House Bill No. 6122¹ and Senate Bill No. 1591² – both provide for an “Internet Transactions Act” that aims to regulate eCommerce transactions including (a) internet retail of consumer goods; (b) online travel services; (c) digital media providers; (d) ridehailing services; and (e) financial services offered through digital online platforms. A more recent one, Senate Bill No. 1808, ³ provides for an “Online Transactions Act” and tracks the language of House Bill No. 6122, but introduces certain new provisions.

The bills provide for the rights and obligations of online merchants, online eCommerce platforms, and consumers, but exclude from their scope consumer-to-consumer transactions. They require online merchants and online eCommerce platforms to register and obtain a license to operate. They also create an eCommerce Bureau under the Department of Trade and Industry (DTI) which shall be the government agency responsible for regulating online transactions and act as a “virtual one-stop shop for consumer complaints on internet transactions.” Furthermore, the bills provide for an eCommerce Philippine Trustmark for online merchants “to provide assurance of safety and security in internet transactions.”.

An interesting aspect of these proposed laws is that they specifically refer to non-resident online enterprises. House Bill No. 6122 and Senate Bill No. 1591 provide that non-residents who engage in eCommerce “by marketing goods or services that are accessible in the Philippines may not evade legal liability in the Philippines owing to the fact of non-residency[.]” On the other hand, Senate Bill No. 1808 provides that a non-resident who “in the ordinary course of business, engages in eCommerce transactions in relation to digital products, by marketing goods or services, that are accessible in the Philippines or made available to consumers in the Philippines, may not evade legal liability in the Philippines owing to the fact of non-residency.”

Read the complete article here.