On third and final reading, the House of Representatives adopted legislation creating a “Electronic Commerce Bureau” (eCommerce Bureau) to oversee online transactions.

The eCommerce Bureau would be the “virtual central authority” that receives and addresses consumer complaints about internet transactions, according to House Bill 4, which was adopted overwhelmingly Monday night with 245 positive votes.

Similarly, the law requires the eCommerce Bureau to create an online dispute resolution platform that would serve as a single point of contact for consumers and online merchants seeking out-of-court dispute settlement.

It also charges the eCommerce Bureau with establishing, having to manage, and preserving an Online Business Registry, which will give consumers access to data and information from registered online business entities for the purpose of verifying the validity, occurrence, and other useful facts pertaining to business organizations.

The bill also includes a code of conduct for all businesses involved in eCommerce that specifies the obligations of eCommerce platform operators and the obligations of online sellers of goods, as merchants are expected to act responsibly to build trust in internet transactions and to protect and uphold the consumer interests at all moments.

Concerning the specific restricted responsibility of internet platforms, the law states:

• Online platforms will be solidarily liable with an online merchant to the consumer only to the extent of civil damages suffered by the consumer as a direct result of the transaction, and
•     online platforms will be liable for civil and administrative indemnity with online merchants only under the following instances: (1) failure to exercise ordinary diligence;  (2) failure to  remove goods  or services not compliant with law; permission to an online merchant not authorized to do business in the Philippines.

Online platforms, on the other hand, shall not be held responsible in the following situations:

• reliance on the authenticity of an online merchant’s representations, warranties, or registration documents even if such information are later proved to be false, provided that the online operator is able to show evidence of good faith, and
• reliance on the representations, warranties or submissions of an online merchant stating that it is valid under the laws of the Philippines or conform to applicable laws, rules and regulations.

“The State recognizes the value and potential of the digital economy to increase competition and improve productivity, thus the need to establish secure and reliable eCommerce platforms where goods and services are transacted online with appropriate transparency and utmost efficiency to encourage the creation of new products, services, business models, and processes,” the bill read.

“Towards these ends, the state should ensure an effective regulation of commercial activities through the internet or electronic means to ensure that consumer rights and data privacy are protected, innovation is encouraged, fair advertising practices and competition are promoted, online transactions are secured, intellectual property rights are respected, and where product standards and safety are observed,” it added.