Senate Office of the Secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES ) FEB -2 P4:19 First Regular Session SENATE S.B. No. 1736 RECEIVED BY: Introduced by SENATOR IMEE R. MARCOS AN ACT AMENDING REPUBLIC ACT NO. 11967, OTHERWISE KNOWN AS THE "INTERNET TRANSACTIONS ACT", AND FOR OTHER PURPOSES" EXPLANATORY NOTE Article XVI, Section 9 of the 1987 Constitution mandates that "the State shall protect consumers from trade malpractices. Republic Act No. 11967, otherwise known as the Internet Transactions Act, places business-to-consumer internet transactions under the regulatory supervision of the Department of Trade and Industry (DTI). However, the law does not extend coverage to customer-to-customer (C2C) transactions, including those involving resellers and individuals engaged in small-scale buying and selling of goods and services through digital platforms. As a result, consumers involved in such transactions are left without a clear regulatory authority to which they may seek redress in cases of trade malpractice. Apart from online scams perpetrated by bogus or unscrupulous resellers, concerns have also arisen regarding the possible abuse of market power resulting from the vertical integration of e-commerce platform providers and logistics service providers. Such arrangements may restrict consumer choice and limit the ability of merchants and buyers to select logistics services that best meet their needs, thereby undermining fair competition and consumer welfare. The proposed measure seeks to address these gaps in consumer protection by expanding the scope of the Internet Transactions Act to include C2C transactions among those subject to DTI regulation. It further strengthens the enforcement powers of the DTI by authorizing the issuance of takedown orders to delist online listings or offers on e-commerce platforms when the rights and interests of online consumers are prejudiced. In addition, the bill aims to prevent potential abuses of market power by requiring e-commerce platform providers to allow consumers the option to choose their preferred logistics service providers. This measure promotes competition,
enhances consumer choice, and helps ensure that goods are delivered at reasonable cost and in proper condition. In view of the foregoing, the approval of this bill is earnestly sought. Free h. Marca IMEER. MARCOST
Senate Office of tie Secretarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES 26 FEB -2 P4:19 First Regular Session SENATE RECEIVED BY: S.B. No. 1736 Introduced by SENATOR IMEE R. MARCOS AN ACT AMENDING REPUBLIC ACT NO. 11967, OTHERWISE KNOWN AS THE "INTERNET TRANSACTIONS ACT", AND FOR OTHER PURPOSES" Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled:
SECTION 1. Section 3 of Republic Act No. 11967 is hereby amended to read
as follows: "Section 3. Scope and Coverage. - This Act shall apply to all business- to-business [andy, business-to-consumer, AND CONSUMER-TO- CONSUMER (C2C) internet transactions within the mandate of the Department of Trade and Industry (DTI), where one (1) 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: Provided, That online media contentL, and consumer to consumer (C2C) transactions} shall not be covered under the Act."
SEC. 2. Section 4 of Republic Act No. 11967 is hereby amended to read as
follows: "SEC.4. Definition of Terms. - As used in this Act: XXX (I) LOGISTICS PROVIDER REFERS TO A COMPANY THAT PROVIDES MANAGEMENT OVER THE FLOW OF GOODS AND MATERIALS BETWEEN THE POINT OF ORIGIN TO END-USE DESTINATION. THE PROVIDER WILL OFTEN HANDLE THE SHIPPING, INVENTORY, WAREHOUSING, PACKAGING, AND SECURITY FUNCTIONS OF SHIPMENTS. XXX"
SEC. 3. Section 8 of Republic Act No. 11967 is hereby amended to read as
follows: "SEC. 8. Functions of the E-Commerce Bureau. - The Bureau shall have the following powers and functions: XXX (e) Receive and refer business, MERCHANT, LOGISTICS PROVIDER, and consumer complaints ARISING FROM [on] internet transactions to the appropriate government agency, consistent with the no-wrong door policy of the DTI; XXX"
SEC. 4. Section 15 of Republic Act No. 11967 is hereby amended to read as
follows: "SEC. 15. Authority to Issue Takedown Order. - The DTI Secretary, after investigation or verification, may issue an ex parte takedown order directing the removal of a listing or offer on a webpage, platform or application, regardless of the intended nature of the transaction, when any of the following is present: XXX (d) Such other transactions or activities online, within the jurisdiction of the DTI, purporting to sell or lease of goods or services that otherwise threaten public or personal safety, compromises financial or personal information, OR HAS THE OBJECT OR EFFECT OF SUBSTANTIALLY PREVENTING, RESTRICTING OR LESSENING COMPETITION THAT PREJUDICES THE INTEREST OF ONLINE CONSUMERS. XXX"
SEC. 5. Section 21 of Republic Act No. 11967 is hereby amended to read as
follows: "SEC. 21. Obligations of E-marketplaces. - Except as otherwise provided in this Act, e-marketplace shall: XXX (H) ENSURE THAT MERCHANTS ARE PROVIDED WITH REASONABLE OPTIONS TO SELECT THEIR PREFERRED LOGISTICS SERVICE PROVIDER FOR THE DELIVERY OF GOODS PURCHASED THROUGH THE PLATFORM AND HAVE THE RIGHT TO CLEARLY IDENTIFY, PRIOR TO CONFIRMATION OF ANY
TRANSACTION, THE FEES AND CHARGES IMPOSED BY O) THE LOGISTICS SERVICE PROVIDER AND ii) THE E-COMMERCE PLATFORM IN CONNECTION WITH THE DELIVERY OF THE GOODS, IN ORDER TO AVOID COMMERCIAL ARRANGEMENTS THAT SUBSTANTIALLY PREVENTS, RESTRICTS OR LESSENS COMPETITION. XXX"
SEC. 6. Section 29(e) of Republic Act No. 11967 is hereby amended to read as
follows: "SEC. 29. Penalties. - The DTI shall impose the following administrative fines as penalty against: XXX (e) An online merchant, e-retailer, e-marketplace or digital platform found in violation of Sections 21, 22(b), (c), (D), AND (H) and 23(a), (f), or (i) of this Act shall be punished with: XXX"
SEC. 7. Implementing Rules and Regulations. - Within ninety (90) days from
the effectivity of this Act, the Department of Trade and Industry, Department of Information and Communications Technology, and other relevant agencies shall promulgate the implementing rules and regulations.
SEC. 8. Separability Clause. - If any portion or provision of this Act is declared
unconstitutional, the remainder of this Act or any provisions not affected thereby shall remain in force and effect.
SEC. 9. Repealing Clause. - All law, presidential decree or issuance, executive
order, letter of instruction, rule of regulation inconsistent with the provisions of this Act is hereby repealed or modified accordingly.
SEC. 10. Effectivity. - This Act shall take effect after fifteen (15) days following
its complete publication in the Official Gazette or the newspaper of general circulation. Approved,