A Joint Administrative Order (JAO) is being drafted by government agencies to ensure protection of consumers and ensure that e-market sellers and e-commerce platforms follow the existing laws over which they are jointly liable in case of violations, but which some players already called an “executive overreach”.
The draft JAO “Guidelines for online businesses reiterating the laws and regulations applicable to online businesses and consumers” is being prepared as the proposed measure on further strengthening e-commerce in the country, particularly the Internet Transactions Act, may not likely be included and passed in the limited time left for the current Congress to enact pending bills.
House Bill 6122 or the Internet Transactions Act, which seeks to establish an eCommerce Bureau that will, among others, focused on promoting the development of e-commerce in the country by building trust between sellers and consumers, stronger online consumer protection, safer e-payment gateways, easier online business registration, and formulating other policies and programs to increase the number of online merchants and consumers. Other related bills being tackled in Congress that aim to promote the digital economy include HB 6927 on e-Government Act, HB 6926 and Senate (SB) 1469 on the national digital careers act; and SB 1470 on the National Digital Transformation policy.
Nonetheless, four line agencies - Department of Trade and Industry, Department of Health, and Department of Environment and Natural Resources, and the Intellectual Property Office of the Philippines, and the National Privacy Commission - are signing the JAO.
Some sectors already called the proposed JAO “executive overreach”. But DTI Secretary Ramon M. Lopez assured that the proposed JAO is just a reiteration of existing laws.
“We don’t believe it’s executive overreach. It is simply implementing laws that should protect consumers, and ensure that e-commerce sellers, and platforms follow the law,” said Lopez.
Lopez even called the draft JAO as “more of a reminder of existing laws” noting that there are no additional laws, just existing ones “to remind all sellers that what applies to brick and mortar also applies to online sellers.”
As such, consumer advocate Victorio Mario Dimagiba, president of Laban Konsyumer Inc., agreed with the observation that the JAO, although favorable to consumers, is actually an “executive overreach”.
Dimagiba pointed out that since there are already existing laws governing e-commerce transactions, the JAO is no longer necessary.” What is needed is the implementation of these laws by the executive department,” said Dimagiba.
Nonetheless, the proposed JAO states that pursuant to Republic Act No. 7394, e-commerce platforms and e-marketplaces shall be considered, and shall be held liable in the same manner as, online sellers, merchants, and e- retailers, when they exercise direction or control over the selling practices of the actual online seller, merchant, and e-retailer, when the latter commits any of the specific violations.
However, the JAO also said that considering that e-commerce platforms and e-marketplaces may lack the time to prevent the actual online seller,merchant, and e-retailer from committing a violation of these rules, e-commerce platforms and e-marketplaces shall be given a period of 10 calendar days from written notice to take down the post of the online seller, merchant, and e-retailer. After which period and notice, and should the e-commerce platform and e-marketplace refuse or neglect to take down the post of the online seller, merchant, and e-retailer, the applicable department or agency under this JAO may now proceed against the e-commerce platform and e-marketplace as a principal violator of the rules and the laws referred.
Under RA No. 7394, it shall be unlawful for e-commerce platforms and e-marketplaces to disseminate or to cause the dissemination of any false, deceptive or misleading advertisement by mail or in commerce by print, radio, television, outdoor advertisement, or any other medium, for the purpose of inducing or which is likely to induce directly or indirectly the purchase of products or services.
Likewise, the same law prohibits e-commerce platforms and e-marketplaces shall not advertise any food, drug, cosmetic, device, or hazardous substance in a manner that is false, misleading or deceptive, or is likely to create an erroneous impression regarding its character, value, quantity, composition, merit, or safety.
Platforms are also liable for copyright infringement when, having been notified of an infringing activity and having the right and ability to control the same, benefits from the said infringing activity. In addition, under RA 8293, e-commerce platforms and e-marketplaces shall be liable for copyright infringement when, with knowledge of an infringing activity, the e-commerce platforms or e-marketplaces induces, causes, or materially contributes to the infringing conduct.
Online business may also be penalized in cases of violations of certain laws, rules and regulations governing their industries and their commercial activities or transactions.
These include laws and issuances regarding data privacy, intellectual property, pricing, labelling, product standards, prohibited or controlled products, health products, licensing requirements, local government ordinances, and environmental compliance, among others.
Notably, online sellers, merchants, e-retailers and consumers may be held liable if their acts in relation to online selling and buying infringes upon protected data privacy rights of individuals under Sections 25 to 37 of the Data Privacy Act which include unauthorized processing of personal information and sensitive personal information, accessing personal and sensitive information due to negligence, and improper disposal of personal information and sensitive personal information, among others.
The DTI will accept any consumer complaint, whether or not the subject matter falls under its jurisdiction. The department shall assist the consumer by guiding them to and forwarding their complaint to the appropriate agency having proper jurisdiction over the subject matter.
Based on the draft, the JAO shall cover all online businesses, whether natural or juridical, registered or not, that are engaged in electronic transactions, particularly B2C transactions including, but not limited to the sale, procurement, or availment of consumer goods, digital content/product, digital financial services, online travel services, ride-hailing services and online courier, and education services.
The JAO aims to increase consumer confidence in business-to-consumer (B2C) e-commerce transactions. It seeks to ensure that e-commerce platforms, electronic retailers (e-retailers), and online merchants are properly guided about the rules, regulations, and responsibilities in the conduct of their online business, considering the need to protect consumers against deceptive, unfair, and unconscionable sales acts and practices. Moreover, the purpose of the JAO is to ensure that online consumers are informed of their rights and the mechanisms for redress.