Trust the Internet | | Panda Anku

A draft law to protect buyers or sellers on the Internet could finally see the light of day.

Last month, House Bill 4 was introduced by Speaker Martin Romualdez and several other lawmakers, essentially adopting the version tabled by former House Deputy Speaker Wes Gatchalian and approved in third reading by the panel during the previous Congress.

This was also among the priority bills identified by President Marcos in his first State of the Union address.

The Internet Transactions Act bill aims to foster an environment based on trust between consumers and merchants to increase e-commerce participation and ultimately achieve sustainable growth. It aims to address the need to establish a single office responsible for enforcing its regulations, ensuring implementation of the e-commerce law under Republic Act 8792, and serving as the focal point for overseeing and implementing the Philippine e-commerce road map.

It found that e-commerce has radically changed the way people live their lives, from mobile shopping to online shopping, while the internet has dramatically changed the way business is done.

Based on a 2019 study by Google and Temasek, the bill indicated that the internet economy is experiencing exponential growth in ASEAN alone, as the region’s total gross merchandise value (GMV) has reached US$100 billion and is projected to reach 300 in 2025 billion US dollars It states that ASEAN economies have experienced a huge surge in internet economy from 2015 to 2019 and the growth rate is expected to continue at 10 to 30 percent from 2019 to 2025.

However, the Philippines has the lowest GMV at $7.6 billion in 2019, the study found, less than Malaysia’s $11 billion, Vietnam’s $12 billion, Singapore’s $12 billion, Thailand’s 16 billion US dollars and Indonesia’s US$40 billion. This is despite the Philippines having an estimated 76 million active internet users, a high penetration rate of 71 percent compared to the global average of 54 percent, longer daily internet usage of 10 hours compared to the global average of 6.42 hours, and a very high social share Media penetration for the population aged 13 and over of 99 percent compared to a global average of 59 percent.

However, it was stressed that the expected growth of the Philippine internet economy is said to be one of the fastest among ASEAN companies, with a compound annual growth rate of 27 percent. The bill aims to ensure that this growth is met or even exceeded, he added.

Noting that e-commerce in the country is still in its infancy and offers immense potential for businesses, it added that the Philippines has yet to produce unicorns or tech start-ups that score a 1 billion US dollars and the local economy does not reflect this momentum that the Indonesian and Vietnamese e-commerce markets have reached at 2.8 percent and four percent of the gross domestic product respectively, while the Philippine e-commerce market remains at 1 .6 percent of GDP.

The draft law also noted that Philippine micro, small and medium-sized enterprises (MSMEs) are lagging behind in e-commerce adoption because they either find using digital technology platforms and tools too difficult or are unaware of the benefits that they offer.

It added that the country lacks policies and regulations that should facilitate online transactions and cross-border processes, addressing concerns such as a lack of trust, low internet speeds, weak last-mile delivery options and payment mechanisms, as the majority still prefer to pay in local currency , lack of a regional-level government agency that can fight cybercrime and resolve cross-border disputes, difficulties in returning products, taxation, VAT registration of foreign e-commerce operators, the 12 percent VAT on the total value of online transactions in the Philippines, and online consumer complaints.

The proposed Internet Transactions Act will apply to all phases of all e-commerce and Internet transactions between business and consumers, including those related to Internet retailing of consumer goods and services, online travel services, online media providers, amusement ride-telephone services and digital financial services, but do not cover consumer-to-consumer transactions.

If the bill is approved, it will have extraterritorial scope, so a person engaging in e-commerce and targeting the Philippine market will be deemed to be doing business in the Philippines and be subject to the law.

All individuals engaged in e-commerce must register as a business, either as a sole proprietorship, sole proprietorship, partnership, corporation, or cooperative.

It proposes the creation of an e-commerce office under the Ministry of Trade and Industry, which will have powers, among other things, to investigate motu propio and to file the relevant cases of violations of the law.

There will also be a Register of Online Businesses (ROB) to give consumers access to data from registered online business entities to check their validity and existence, among other things.

The DTI Secretary, meanwhile, has the authority to issue an interim order ordering that any website, webpage, online application, social media account or other similar platform be shut down, effective for a period not exceeding 30 days and in the Philippines, or that no entity will process or otherwise economically disable any payment made to any such entity to prevent further violations. The Secretary also has the power to issue cease and desist orders.

To build trust in Internet transactions, the bill requires, among other things, that tracking be provided as part of the services of online merchants, that a cancellation option be provided, and that secure technologies and protocols be used, including those proven by visible certificates of trust to ensure the security of online payments and sensitive data,

Online merchants are required to provide e-commerce platform operators with, among other things, business registration documents, a geographic address to which subpoenas and other court proceedings can be served, and contact details.

To address complaints from ride-hailing services, the bill would prohibit consumers from canceling confirmed orders for delivery of groceries or grocery items if the items have already been paid for or are already in the ride-hailing service partners’ possession or are already at the consumer, unless the consumer uses credit card services or the delivery is delayed by at least one hour due to the fault or negligence of the ride-hailing service partner. Inappropriately shaming, demeaning, shaming, or humiliating these ride-hailing service partners is also illegal.

However, if the delivered goods are not in accordance with the contract, the consumer has the right to terminate the contract with the online retailer. The trader can be held liable to the consumer for damage caused by the lack of conformity of the goods.

Operators of e-commerce platforms are only liable towards the consumer with an online trader to the extent of the civil damages that the consumer suffers as a direct result of the transaction, without prejudice to other liabilities.

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