House approves Internet Transactions Act

Published November 24, 2020, 11:58 PM

by Ben Rosario

Dishonest sellers and buyers in commercial transactions in the internet face severe penalties under a bill that the House of Representatives on Tuesday approved on third and final reading.


With 232 congressmen voting in the affirmative and six in the negative, the Lower House approved House Bill No. 7805 or the proposed Internet Transactions Act.  Approval was swift as the measure received bipartisan support except for six solons who attended the virtual plenary session Tuesday night.

Principal authors Reps. Wesley Gatchalian (NPC, Valenzuela City) and Alfredo Garbin (Ako Bicol Partylist) lauded their constituents for strongly backing the immediate passage of the measure.

HB 7805 is part of the legislative priorities under the leadership of Speaker Lord Allan Velasco.

The proposal provides regulations in commercial transactions in the internet in order to protect both consumers and sellers from fraud and abuses committed in online sales of goods and services.

Authors said both buyers and sellers are protected under the provisions of the bill although the measure contains ample safeguards to ensure the welfare of consumers.

Aside from identifying unlawful acts in internet sale of services and goods, the bill also proposes the creation of the e-Commerce Bureau that will be tasked to implement the provisions of the proposed law.

In sponsoring HB 7805, Gatchalian noted that there has been a sudden rise in internet fraud and unscrupulous transactions during the COVID-19 pandemic period.

Gatchalian, chairman of the House Committee on Trade and Industry, said this is due to the “meager regulatory controls” provided under existing laws.  He added that consumers are the usual victims of fraudulent practices and scams.

Platforms with online merchants can be held liable if they fail to exercise due diligence to protect consumers; if they know that the items in their platform do not conform with law or fail to publish details of their merchants, among others.

Gatchalian said that in the “absence of law, platforms like Lazada and Shoppee” do not exercise due diligence in order to sell more goods. 

The bill proposes an e-Commerce Code of conduct that includes  guarantee for equal application of rights  of consumers and their treatment with “honesty, integrity and fairness at all times.”

Accurate information about goods and services being offered for sale on-line and conformity of said merchandise to Philippine regulatory standards should be assured.

The e-Commerce Bureau (eCB) shall be an agency under the Department of Trade and Industry.  The proposed bureau is mandated to implement, monitor and ensure compliance to the Internet Transactions Act, among other duties and responsibilities.

The said bureau will also have the power to investigate and file appropriate cases against violators and shall receive and address consumer complaints on internet transactions.

Gatchalian said the e-CB shall have the power to issue summons, subpoena ad testificandum and subpoena duces tecum to alleged violators or witnesses to compel their attendance during formal investigation and proceedings on a complaint. 

The bill also defines the right to redress by online merchants.        

 Rep. Alfredo Garbin, a co-author of the bill,  said he will propose amendments that will amply protect online merchants  and ride hailing service providers who are at times being victimized by bogus buyers and fake transactions.            

Under HB 7805, ride hailing providers are also mandated to treat customers fairly and honestly.

No rider or delivery service personnel will be allowed to cancel confirmed orders if such have been paid in full.  However, it shall be unlawful for consumers to unreasonably “shame, demean, embarrass or humiliate” ride hailing partners.

Gatchalian revealed that the Department of Trade and Industry reported that it received 2,457 internet commerce complaints in 2019.

The number rose by over 600 percent in 2020 as 14,869 complaints have already been filed between January and October.

The top three issues raised in the complaints are the following: violation of the Price Act; delivery of defective products, and deceptive practices.