Republic Act No. 11967: Internet Transactions Act of 2023

The State aims to promote and maintain a robust electronic commerce (“e-commerce”) environment by building trust between online merchants and online consumers. Toward this end, the State shall guarantee effective regulation of e-commerce to protect consumer rights and data privacy, secure internet transactions, and ensure product standards and safety compliance, among others.

On 05 December 2023, Republic Act No. 11967 or the Internet Transactions Act of 2023 (“ITA”) was signed into law. The ITA applies to all business-to-business and business-to-consumer internet transactions, where one of the parties is situated in the Philippines or where the digital platform, e-retailer, or online merchant is availing of the Philippine market and has minimum contacts therein. However, the ITA does not cover online media content, and consumer-to-consumer transactions.

One of the salient provisions of the ITA is the creation of E-Commerce Bureau (the “Bureau”). The Bureau, which is under the Department of Trade and Industry (“DTI”), is tasked to implement, monitor, and ensure strict compliance with the provisions of the ITA. 

Within 1 year from the effectivity of the ITA, the Bureau is mandated to establish an Online Business Database (“OBD”) – a database of digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce in the Philippines that will provide the government and online consumers access to contact information of online businesses. 

To provide assurance of safety and security in internet transactions, the DTI shall encourage the development of E-Commerce Philippine Trustmark which may be established and operated by an industry-led private sector governance body. 

The ITA likewise enumerates the rights, obligations, and liabilities of parties in internet transactions, specifically, the online consumers, e-marketplaces, other digital platforms that do not retain oversight over the consummation of the transaction, and the e-retailers and online merchants.

Relevantly, the e-retailer or online merchant shall be primarily liable for indemnifying the online consumer in civil actions or administrative actions arising from the internet transaction. On the other hand, the e-marketplace or digital platform that facilitated the internet transaction subject of a civil action or administrative complaint shall be subsidiarily liable to the online consumer if certain circumstances are present such as failure to exercise ordinary diligence in complying with its obligations resulting in loss or damage to the online consumer. Finally, the e-marketplace or digital platforms shall be solidarily liable if it fails, after notice, to act expeditiously to remove, or disable access to goods or services appearing on its platform that are prohibited by law, imminently injurious, unsafe, or dangerous.

The ITA empowers the DTI to impose administrative fines as penalty for certain violations up to a maximum of PHP1,000,000.00.   
The full text of R.A. No. 11967 may be accessed here.