DTI orders 2 big e-commerce platforms to explain fraudulent sales

Trade and Industry (DTI) Secretary Alfredo E. Pascual has ordered two big e-commerce platforms to explain consumer complaints about deceptive, unfair, fraudulent, and unconscionable online sales practices. Except for the terms “two big e-commerce” platforms, Pascual did not divulge the names of the two. A DTI statement issued Thursday, June 8, said Pascual issued the letter Monday, June 5, giving the  two “big e-commerce” platforms 72 hours to submit  their official explanation to the DTI. "We received reports regarding scammers and sellers of defective, fake, and pirated products in e-commerce platforms. I have already issued a letter addressed to two big e-commerce platforms for them to remove unregistered and unlicensed online merchants. Following numerous notifications, they were given 72 hours to explain," Pascual said in the statement. Further, he added that DTI is currently undertaking appropriate measures to intensify its campaign against these fraudulent sales practices. “I assure Filipino consumers that we are here to promote and protect their welfare and make sure that these sellers will be made accountable. As we promote the use of e-commerce platforms, we want to make sure that these spaces will be safe for consumers," he added. According to DTI, they received several consumer complaints against various online sellers of fake, defective, or undelivered parcels. In issuing the order, the DTI cited prohibitions against deceptive, unfair, and unconscionable online sales and practices under Republic Act Nos. 7394 and 8293, and Joint Administrative Order No. 22-01, Series of 2022 or the Guidelines for Online Business Reiterating the Laws and Regulations Applicable to Online Businesses and Consumers. He also urged these e-commerce platforms to immediately address the concerns of consumers who have fallen victim to deceptive sellers. To recall, the Intellectual Property Office of the Philippines (IPOPHL) has signed a memorandum of understanding (MOU) with Lazada and Shopee, the country’s leading e-commerce platforms, resulting in heightened removals of IP infringing posts on their platforms. As facilitator in ensuring the smooth implementation of the MOU, IPOPHL is helping expand the membership of the MOU – now at 27 with the new signatories — to create a greater impact. The MOU provides an avenue where members can closely collaborate and notify platform members on possible IP violations, allowing a more efficient take down of online posts selling counterfeit products or pirated content. Meanwhile, Pascual also ordered tighter monitoring of vape shops across the National Capital Region (NCR) to ensure that the restrictions on the sale of vaporized nicotine and non-nicotine products, as established by Republic Act No. 11900 also known as "Vaporized Nicotine and Non-Nicotine Products Regulation Act" are strictly implemented. As of June 1, the DTI reported that its monitoring teams have already monitored 583 physical stores and 28,584 online stores or a combined total to 29,167 firms monitored. “The DTI, through our Fair Trade Enforcement Bureau (FTEB) will continue to implement tighter monitoring of these firms. We aim to balance the interest of both businesses/manufacturers and also protect our youth from these harmful substances," Pascual said. Out of the 583 physical stores monitored, 229 were found compliant to the prohibitions and regulations established by R.A. No. 11900, while 214 were found non-compliant. Meanwhile, out of 28,584 online stores, only 175 were found to be compliant after physical validation while 28,409 were non-compliant. To date, 26,986 online stores are still undergoing physical validation. As a result of this monitoring, FTEB has issued a Notice of Violation (NOV)/Show Cause Order (SCO) to 72 firms. The DTI has also confiscated 13,784 products from non-compliant stores with a retail value of P4,252,523. Majority of the firms that have received an SOC/NOV have the following violations: (1) Rule IV - Requirements on product packaging; (2) Rule V - Sale of vaporized nicotine and non-nicotine products, their devices, or novel tobacco products; (3) Rule VI - Restrictions on product communication, advertisements, and sponsorships; and (4) Rule VIII - Prohibition on the use of nicotine and non-nicotine products in public places. Further, as of June 1, the Adjudication Division of FTEB has already received 74 formal charges, with 73 filed against physical stores and 1 against an online store. The DTI conducts monitoring across major social media and e-commerce platforms to ensure that minors will not have access to these substances online. DTI urges consumers to report violators, retailers, distributors, and manufacturers that sell uncertified items through the Consumer Care Hotline at DTI (1-384) or [consumercare@dti.gov.ph](mailto:consumercare@dti.gov.ph).