By: Atty. Gregorio B. Austral, CPA
Obligations of E-marketplaces
We have been buying and selling goods and services through the use of the internet. Internet transactions including the horrible experience of some of its users have not been given so much attention in the past until the pandemic happened when we were forced to buy our needs from the internet, relying solely on pictures and product descriptions which may or may not conform to the product described. It was only in the year 2023 that Congress enacted the Internet Transactions Act of 2023, Republic Act No. 11967, [December 5, 2023], which defines the obligations of E-marketplaces, among others.
E-marketplace refers to digital platforms whose business is to connect online consumers with online merchants, facilitate and conclude the sales, process the payment of the products, goods, or services through the platform, or facilitate the shipment of goods or provide logistics services and post-purchase support within such platforms, and otherwise retains oversight over the consummation of the transaction.
The top e-commerce marketplaces in the Philippines that offer a wealth of opportunities for both buyers and sellers are Lazada, Shopee, Zalora, e-Bay and many more.
What are the obligations of E-marketplaces under the Internet Transaction Act?
Under the law, e-marketplaces shall: (a) Ensure that the internet transactions on their platform: (1) Are clearly identifiable as an e-commerce transaction; (2) Identify the person or persons on whose behalf the e-commerce transaction is made; and (3) Identify any promotional offer including any discount, premium, or gift, and that conditions required to qualify for it are accessible, clear, and unambiguous.
(b) Require, as far as practicable, all online merchants, whether foreign or Filipino, to submit the following, prior to listing with their platforms: (1) Name of the online merchant accompanied by at least one (1) valid government identification card for individuals or business registration documents for juridical entities;
(2) Geographic address where the online merchant is located;
(3) Contact details of the online merchant which must include a mobile or landline number and a valid e-mail address; and
(4) In instances when the services offered by an online merchant is connected with the exercise of a regulated profession, the details of membership in any professional body or similar relevant institution with which the online merchant is registered or otherwise is a member of.
Except for the government identification cards or registration documents mentioned under Section 21 (b) (1) and the contact details of the online merchant as required under Section 21 (b) (3), the information required under this paragraph shall be published or posted on the e-marketplace or digital platform for transparency, unless the e-marketplace or digital platform establishes means to facilitate communication between online merchants and online consumers or provides a link to the OBD on their platform.
(c) Maintain a list of all online merchants registered under their platform, containing the information provided in Section 21 (b). The list shall be updated and verified regularly.
An e-marketplace shall be required to provide specific information upon the issuance of a subpoena by competent authority pursuant to an investigation based on a sworn complaint, stating that the e-marketplace or e-retailer is being used in the commission of a crime or that it was utilized as a means to commit a malicious, fraudulent, or unlawful act, and that the complaint is unable to ascertain the identity of the perpetrator.
(d) Take the necessary precautions to protect the data privacy of consumers, at all times, in accordance with Republic Act No. 10173 or the “Data Privacy Act of 2012,” and comply with the minimum information security standards set by the Bureau, NPC, and other issuances of relevant government agencies. Digital platforms and e-marketplaces shall be covered by the provisions of Republic Act No. 10173 and issuances by the NPC.
(e) Prohibit the sale of regulated goods unless they provide the necessary permits and license information, and contractually obligating their compliance with sale procedures and limitations, and other relevant conditions for the sale as may be imposed by any law or local government regulation.
(f) Provide an effective and responsive redress mechanism for online consumers and online merchants to report a user or information posted on the platform that are deemed in violation of relevant laws.
(g) Require all online merchants to clearly indicate the following in their product offers online, regardless of the nature of the goods and services: (1) Name and brand of the goods or services; (2) Price; (3) Description; and (4) Condition.
In performing their obligations under this section, e-marketplaces and other digital platforms are required to observe ordinary diligence. Failure to do so will subject them to penalties under Section 29 of this Act. (Internet Transactions Act of 2023, Republic Act No. 11967, [December 5, 2023])