Government agencies have issued a Joint Administrative Order (JAO) providing for a “safe harbor” that will make online platforms also liable for the violations committed by their online merchants as government tighten its watch amid burgeoning e-commerce transactions in the country.
JAO 2022-01 to be published Tuesday, March 15, was signed by the Department of Trade and Industry (DTI), Department of Health (DOH), Department of Agriculture (DA), Department of Environment and Natural Resources (DENR), Intellectual Property of the Philippines (IPOPHL) and National Privacy Commission (NPC).
Atty. Melquiades Marcus N. Valdez II, DTI director for consumer policy and advocacy bureau, explained that while JAO 2022-01 consolidates all existing rules and guidelines on online businesses, they added a “safe harbor”, a new provision, under Section 13 of the JAO on “Liability of e-commerce platforms and e-market places”.
Section 13.2 of the JAO provides that in case of a prima facie violation of any pertinent laws or regulations committed in an online post by the online seller or merchant, e-retailer, e-commerce platform, e-marketplace, and the like, the concerned authorized agency shall issue a notice giving the violator a maximum period of three calendar days from receipt thereof, within which to take down such post, without prejudice to the filing of appropriate administrative actions all violators.
Failure to take down the post within three days shall be construed as an internal and overt act that shall aggravate the offense charged.
DTI Undersecretary for Consumer Protection Group (CPG) Ruth Castelo also reminded online merchants to comply with the provisions of the Consumer Act and the Price Act. “Laws that apply to brick and mortar stores also apply to online business. A price tag required to be pasted on items you buy in stores are also required to be pasted on the products that you buy online or through published price list. Buyers no longer have to ask for the price from the seller, who will almost always say that a private message is sent (P.M. Me). This is a clear violation of the Price Tag law.”
The DTI further added that digital platforms must make sure that merchants who sell on the platforms must secure licenses, permits, and other certification requirements depending on the nature of their business, and of the goods and services they sell. Food and medicines must comply with FDA registration, while 87 consumer products must contain PS marks or ICC stickers.
The issuance of the new JAO, which iterates all existing regulations, was in response to the proliferation of prohibited and regulated products sold on marketplace platforms and social media marketplaces, government agencies. It likewise cautioned merchants selling on Facebook/Meta, Instagram, Viber, Lazada, Shopee, Carousell, and other marketplace platforms against the sale of unlicensed, restricted or prohibited products.
The JAO adopted the ASEAN Online Business Code of Conduct to ensure that merchants are aware of their responsibilities to consumers. “DTI shall continue this advocacy towards the fair treatment of consumers, conformance to local standards, honest and truthful communication, and non-proliferation of fake online reviews, among others,” Castelo added.
Based on the Google Temasek Bain Study of 2021, the Philippines is the fastest growing internet economy in Southeast Asia. DTI reported increases in business name registration for retail sale via the internet, and significant growth in consumer complaints against online business. DTI Secretary Ramon Lopez said “in order to promote e-commerce. the DTI’s thrust is to build trust between seller and buyers. We have to make sure that consumers have access to quality and safe products. We condemn the sale of fake/counterfeit, substandard or prohibited products online and we will run after violators and merchants who sell unlicensed products including those who do not comply with our statutes.”