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House internet transactions bill hurdles 2nd reading

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An electronic commerce (e-commerce) bureau will soon be created to protect consumers and merchants engaged in internet transactions as the bill proposing such hurdled second reading at the House of Representatives.

During Tuesday’s plenary session, the chamber passed via voice vote House Bill 4, or the proposed Internet Transactions Act, which is a priority legislation mentioned by President Ferdinand R. Marcos Jr. in his first State of the Nation Address last July 25.

In his sponsorship speech, Batangas Representative Mario Vittorio Mariño said the bill seeks to regulate all business-to-business and business-to-consumer commercial transactions over the internet, including those related to internet retail, online travel services, digital media providers, ride-hailing services, and digital financial services.

The proposed e-commerce bureau will serve as the “central authority” tasked to regulate online trade and shall act as a virtual one-stop shop for consumer complaints on internet transactions.

“No less than our Chief Executive underscored the need to enact a law which aims to establish 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 protected and product standards and safety are observed,” Mariño said.

According to him, any entity, domestic or foreign, that deliberately and voluntarily directs its activities to the Philippine market shall be subject to the Internet Transactions Act and shall be deemed to be conducting business in the Philippines.

In addition, the proposed regulation ensures parity and respects competition between online merchants and those who offer their goods and services through brick-and-mortar locations.

The e-commerce bureau will take the initiative in creating platforms for online dispute resolution that will serve as a single point of contact for customers and online retailers looking for out-of-court settlement of disputes.

Likewise, the same bureau is mandated to establish, manage and maintain a registry of online businesses which shall provide consumer access to data and information of registered online business entities for purposes of verifying the validity, existence, and other relevant information pertaining to business entities.

The Department of Trade and Industry shall lead in the implementation of an industry-led e-commerce trust mark to provide assurance of safety and security in internet transactions.

It sets distinct penalties for online retailers, e-commerce platforms, ride-hailing service providers, as well as users, found in violation of the requirements of the proposed law.

Mariño said online retail and other e-commerce services are a “mainstay” in the lives of Filipinos, citing the latest study from e-Conomy Southeast Asia that the Philippines achieved the greatest rise in digital investments in the area with a 63-percent gain from 2021 to 2022.

According to the same report, the country’s digital economy is expected to reach USD20 billion in gross merchandise value by the end of this year after growing 22 percent over the past year.

According to him, the local digital economy is expected to reach $35 billion by 2025, growing at a rate of 20% CAGR, and could reach $100 billion to $150 billion by 2030.

“Despite the partial resumption of in-store shopping, e-commerce accounted for 70 percent of the overall Philippine digital economy. E-commerce, food delivery, and video on demand are the top 3 digital activities of Filipinos showing an adoption rate of 88 percent, 69 percent, and 58 percent, respectively among digital urban users,” he said.

The Philippines is also expected to become a hot investment hub across sectors, including digital financial services, he noted.

“Given the real and predicted growth in e-commerce transactions, government laws must be securely in place in order to protect the rights and interests of consumers and to provide them with remedies in case of complaints,” he said.

“Likewise, by prescribing guidelines, businesses operating in the digital market, particularly small and medium enterprises, will be able to scale up, and expand their markets, build their reputation, and create a verifiable track record of their performance and trustworthiness,” he added.

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