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Passage of E-commerce protection bill proposed

Wednesday, October 26, 2022

Malaya Business Insight

Passage of E-commerce protection bill proposed

DAVAO City Rep. Paolo Duterte yesterday called on the House leadership to include in its priorities the passage of a measure that would establish an E-commerce bureau in the Department of Trade and Industry (DTI) tasked to safeguard online transactions and help promote a “robust” internet-based economy in the country.

Duterte said House Bill No. 3050 is meant to complement the recently-enacted law that mandates the registration of Subscriber Identity Modules (SIMs) cards, the first bill signed into law by President Marcos Jr.

While both the SIM Registration Law and the proposed internet transactions act aim to protect consumers from fraud, HB 3050 seeks to provide additional protection to e-commerce consumers and merchants.

HB 3050 also promotes trust and accountability in the country’s e-commerce market with the goal of further accelerating the growth of this sector, and encouraging micro, small and medium enterprises (MSMEs) to take advantage of digital innovations to expand their businesses.

“In order to protect the merchant and the consumer, an effective regulation of commercial activities through the internet or electronic means must be established,” the bill said. “This is 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 product standards and safety are observed.”

Under the measure, the e-commerce division currently set up in the DTI will be abolished and replaced by an E-commerce bureau.

The bureau shall be authorized, among others, “to mandate E-commerce entities to register in the DTI’s Online Business Registry; identify regulatory gaps affecting the e-commerce industry and recommend appropriate executive or legislative measures to foster this sector’s growth; and act as a virtual one-stop shop tasked to receive, address and facilitate the speedy resolution of consumer complaints on unresolved internet transactions.”

Duterte noted that as a result of the pandemic, online retail and other E-commerce services are slowly becoming the norm in the day-to-day lives of many Filipinos, who have found conducting contactless transactions easy and convenient.

The 2021 “e-Conomy” report for Southeast Asia by Google and Temasek found the Philippines the fastest-growing e-commerce market in the region. The country has seen 12 million new digital consumers since the start of the pandemic up to the first half of 2021, of which 63 percent are from non-metro areas and 99 percent say that they intend to continue using digital services going forward, the study said.

According to the study, the gross merchandise value (GMV) of the Philippines’ internet economy is expected to reach $17 billion in 2021 or a 93 percent year-on-year surge, and up to $40 billion in 2025.

Duterte said these projections, as well as the study’s findings that the Philippines still has the lowest digital consumer penetration in the region at only 68 percent of internet users, “underscore the need for Congress to pass a law to both safeguard and promote internet transactions.”

“Establishing the DTI’s E-commerce bureau and according it with the appropriate powers and responsibilities will help build trust between online merchants and consumers via secure and reliable e-commerce platforms where goods and services are transacted with transparency and utmost efficiency,” Duterte said.

Aside from acting on consumer complaints, the bureau is also empowered to take down, either temporarily or permanently, any product listing, webpage, business page, application, social media post, profile, website or any other online platform found violating the bill’s provisions or the Consumer Act of the Philippines.

The proposed law also authorizes the bureau to issue an advisory that “no entity shall process payments made to any violating entity to ensure that the latter shall be rendered commercially inoperative.”

HB 3050 also specifies the obligations and rights of digital platforms, online merchants and consumers; determines the penalties for violating such rights and obligations; and seeks the development of an “E-Commerce Philippine trustmark” to provide assurance and security in transactions over the internet.

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