DTI seeks to regulate online merchants

Published August 11, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

As electronic commerce is expected to account for 50 percent of gross domestic product (GDP) by 2022, online merchants will be required to register with the Department of Trade and Industry to formalize their operation and to strengthen transparency and accountability for consumers to run to for their complaints.

DTI Undersecretary Ruth Castelo said at the E-Commerce Dialogue that they are looking at revising the Consumer Act to include online transactions as the current law does not have any distinction between the physical store and the online store.

At present, a vast majority of 80 percent online sellers belong to the informal sector, meaning they are those that do not issue receipts and not registered with any government agency.

By requiring registration of online merchants, the Fair Trade Enforcement Bureau (FTEB) of the DTI can protect consumers. Castelo explained that FTEB cannot protect consumers with complaints against online merchants unless they will seek the help of the National Bureau of Investigation to find the seller.

In the region, Castelo also said that ASEAN is also developing an online dispute alternative resolution to resolve cross border online disputes. This is a three-year program that is expected to be finalized by 2020. Thus, there is also the need for Congress in the crafting of the revised Consumer Act.

Customs authorities among ASEAN countries are also drafting a memorandum order to provide e-commerce processes and improve their regulations.

On October 20, 2008, the DTI, Department of Health (DOH), and Department of Agriculture (DA) enacted a joint memorandum circular on consumer protection for e-commerce transactions. DTI-DOH-DA Joint Administrative Order (AO) No. 1 – “Rules and Regulations for Consumer Protection in a Transaction Covered by the Consumer Act of the Philippines (RA 7394) through Electronic Means under the E-commerce Act (RA 8792)” or the E-Consumer Protection Guidelines).

Part of the guidelines include mandating minimum requirements that e-commerce sites must comply with, e.g., privacy policy, information about retailer, seller, distributor, products and services, and consumer transaction, including the setting up of a help desk to internally resolve consumer complaints.

The DTI has recognized that the lack of an established online process for handling of merchant and consumer complaints affects confidence in doing e-commerce.

Trust is essential for e-commerce to prosper. There is a seeming lack of seal providers to authenticate e-commerce sites offering products and services online.

The DTI is encouraged to set up a single platform for complaints-handling, including an application that can route the complaint to the concerned government entity and monitor the complaints until its resolution.

At present, the government is revising the Philippine E-Commerce Roadmap 2016-2022 with the aim of raising its growth targets amid robust e-commerce growth.

“We can be more optimistic of the targets because e-commerce penetration is so high but underutilized so we should be more optimistic on the usage because the basic technologies are already here,” said Trade and Industry Secretary Ramon M. Lopez during the recent E-Commerce 2022 Dialogue.

The existing roadmap assumed conservative growth targets of 25 percent e-commerce GDP contribution by 2022 from 11 percent in 2016.

Lopez noted that once confidence goes up because consumers have more trust on the online merchants that the system is airtight, “There is the momentum and all are connected. It is just a matter of converting usage into a commerce transaction. That will be quick, the millennials are doing online transaction already.”

DTI Undersecretary Rafaelita Aldaba also said that a 50 percent e-commerce contribution to GDP is not farfetched considering that services alone already contributes as much as 50 percent of GDP.

Ronilo Balbieran also said that the roadmap’s growth forecast can be much higher given that electronics and IT-enabled production of foods and services can multiply 5-10 times.

He, however, stressed that as commerce and trade move up into mobile, the micro, small and medium enterprises should not be left behind. He stressed the business potential is so huge that the MSMEs just have to harness and build their capabilities with the help of the government.

Lopez also indicated of his willingness to push for government assistance to MSMEs for their immediate buy in of online store for a limited period of two years just to jumpstart these enterprises’ foray online.

The government, he said, still have to study as to the magnitude of the amount to be set aside to cover some fees for the MSMEs. “This is a development investment even for a limited period that we can give support to MSMEs,” he said.