Internet Transactions Act’s IRR released

The Implementing Rules and Regulations (IRR) of Republic Act No. 11967, or the Internet Transactions Act (ITA) of 2023, was signed by representatives from the Department of Trade and Industry (DTI), Bangko Sentral ng Pilipinas (BSP), the Department of Agriculture (DA), the Department of Information and Communications Technology (DICT), the Department of Health (DOH), and the National Privacy Commission (NPC) on May 24, 2024.

 

The IRR has established a comprehensive legal framework for the implementation of the ITA which was enacted into law on December 5, 2023 and became effective on December 20, 2024. The ITA and its IRR primarily aim to promote, develop, and regulate the country’s electronic commerce (e-commerce) landscape by building trust between digital platforms, online merchants, and online consumers.

 

“I am confident that this law and the IRR will positively revolutionize e-commerce in the Philippines. By fostering trust in online transactions, we are creating more opportunities for high-quality and better-paying jobs,” DTI Secretary Fred Pascual said in the inter-agency signing of the IRR.

 

The following are salient provisions in the ITA IRR:

 

(a) Scope

The ITA applies to all business-to business (B2B) or business-to-consumer (B2C) e-commerce transactions where one of the parties is situated in the Philippines, or where the digital platform, e-retailer, or online merchant is availing of the Philippine market and has minimum contracts in the country.

 

Consumer-to-consumer internet transactions, which has been defined in the IRR as “transactions between end-users done for personal, family, or household purposes, and not done in the ordinary course of business, regardless of platform used”, as well as online media content, are not included in the coverage of the ITA. However, live-selling shall be considered advertising, an act which is within the ambit of the ITA and should therefore be regulated.

 

(b) E-Commerce Philippine Trustmark

The DTI shall encourage the development of the E-Commerce Philippine Trustmark which will signify that products, goods, or services sold online are trustworthy. The DTI may offer benefits and incentives to entities displaying the Trustmark to encourage compliance with standards and provide assurance safety and security in e-commerce.

 

(c) Codes of Conduct for E-Commerce and Online Consumers

The IRR provides for Codes of Conduct for entities and consumers engaged in e-commerce transactions to build trust within the industry. Such Codes are non-exclusive lists.

 

The E-Commerce Code of Conduct aims to protect and uphold the interest of consumers at all times through honest and fair treatment, prohibition of fraudulent or unfair business practices, disclosure of accurate information about goods and services marketed and sold online, and avoiding anti-competitive practices.

 

The Online Consumers Code of Conduct provides that online consumers shall exercise ordinary diligence and respect in any internet transactions. Particularly noteworthy is the prohibition on cancelling  of online orders of food that is cooked or otherwise prepared by quick service restaurants, or goods that are made to order and the materials of which have already been purchased or prepared, unless there is an agreement between the parties.

 

(d) Matters subject of separate DTI issuances

The DTI shall issue additional rules and regulations on all matters that encompass e-commerce consistent with the ITA:

  • The governing rules and regulations for the Online Business Database (OBD), a database of digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce, shall be issued by the DTI, in consultation with the DICT, NPC, Philippine Competition Commission (PCC), Cooperative Development Authority (CDA), and other concerned agencies.
  • The DTI shall release, within six (6) months from the effectivity of the ITA, applicable guidelines on the development and management of the Online Dispute Resolution System (ODRS), a platform to facilitate an alternative mode of dispute resolution for the actors in the digital economy.
  • The DTI may create an E-Commerce Promotion Council with the private sector that may lead the establishment of a co-regulatory mechanism complementing existing regulatory frameworks and may issue additional guidelines therefor.

 

(e) The DTI’s regulatory jurisdiction

While the DTI is vested with regulatory authority over the use of the internet for conducting e-commerce, such authority is ancillary to and neither diminish nor deprive the existing regulatory jurisdiction of other agencies. Accordingly, payment-related activities of entities conducting e-commerce transactions shall be subject to the regulation and supervision of the BSP pursuant to the National Payments Act, the New Central Bank, and other relevant laws, rules, and regulations.

 

(f) Data Privacy Considerations

In enforcing the registration of digital platforms, e-retailers, e-marketplaces, and online merchants with the E-Commerce Bureau and the submission of required information necessary for policy-making and program development purposes, the Bureau shall adhere to principles of minimization and proportionality in data privacy. Section 17 of the IRR states that the DTI shall conduct a privacy impact assessment whenever processing of personal data is concerned. Section 30(l) provides that online payments and sensitive data shall be safeguarded through the use of secure technology and protocols including those evidenced by visible trust certificates.

 

(g) Transitory Provisions

A transitory period of eighteen (18) months from the effectivity of the ITA shall be provided for DTI to compel compliance with the standards and to all affected parties online merchants, e-retailers, e-marketplaces, and digital platforms to fulfill their obligations under the law. The enforcement of the ITA and its IRR during the transitory period against the said parties shall be stayed in such instances as otherwise stated in the rules. However, other applicable laws affecting such parties or the exercise of authority of appropriate agencies as conferred under the ITA shall not be interrupted.

 

The full text of the ITA can be accessed here, while its IRR can be read here.

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