What are the Obligations of Online Merchants and e-Retailers?

The Internet Transactions Act of 2023 has specified the obligations of e-retailers and online merchants in the Philippines.

These obligations are outlined by Republic Act No. 11967, also known as the Internet Transactions Act of 2023.

The e-commerce market in the Philippines has been steadily growing in the past few years. Numbers from GlobalData show that the market saw a compound annual growth rate (CAGR) of 28.6% from 2019 to 2023 as it reached $20.1 billion (approximately PHP 1.1 trillion) last year, as online merchants and e-retailers continued to thrive.

This growth is expected to continue this year with the market expected to grow by 19.6%. Projections state that it will reach $24.1 billion (approximately PHP 1.3 trillion) by the year’s end. 

As the e-commerce market continues to grow with the entry of more and more e-retailers, online merchants, and customers, a law was passed last year to ensure that order in the industry. Specifically, it introduces both regulatory and developmental guidelines that aim to build trust between merchants and consumers. 

This law is none other than Republic Act (RA) No. 11967, which is also known as the Internet Transactions Act of 2023. According to the implementing rules and regulations (IRR) issued by the Department of Trade and Industry (DTI), the law outlines certain responsibilities and obligations that should be exercised by e-retailers and online merchants of both digital and non-digital goods and services. 

Compliance with the Law, Invoice Requirement

First and foremost, all e-retailers and online merchants are obliged to comply with the Internet Transactions Act of 2023 as well as its IRR. E-retailers and online merchants are not allowed to transact with any platform that does not comply with any applicable laws in the country. 

Furthermore, e-retailers and online merchants are obliged to issue invoices for all sales made. These invoices can either be in paper or electronic form. 

Price of Goods

E-retailers and online merchants are not allowed to withhold the price of goods, according to the Internet Transactions Act. In fact, it is required to indicate the prices of goods or services offered. 

This should be consistent with Article 81 of the Consumer Act of the Philippines, which states “It shall be unlawful to offer any consumer product for retail sale to the public without an appropriate price tag, label or marking publicly displayed to indicate the price of each article and said products shall not be sold at a price higher than that stated therein and without discrimination to all buyers.” 

Condition of Goods

When it comes to goods sold to online customers, e-retailers and online merchants must ensure that the goods are received “in the same condition, type, quantity, and quality as described and stated and, in applicable circumstances, possess the functionality, compatibility, interoperability, and fitness for the purpose for which they are intended.” 

Goods should also be received in the same condition and quantity as any sample or picture presented by the seller upon the request of the customer. In addition, the item/s should match the descriptions and specifications given to the customer upon inquiry.

Conformity with Advertising and Functionality

In addition, goods sold to online customers must be delivered with complete accessories, including user manual, all other packaging, and installation requirements, among others. Relevant information should be found on the packaging, written or printed in either Filipino or English. 

These goods must also have the performance capabilities and qualities that are considered standard in goods of the same type. These capabilities include functionality, interoperability, and compatibility. This also applies to providers of digital goods and services. 

Engaging in Delivery Service

For e-retailers and online merchants engaged in delivery service, the Internet Transactions Act gives them the right to require a valid email address or mobile phone number from their customers. This information should be provided prior to entering a transaction. 

Special Rules for E-Retailers

The Internet Transactions Act likewise provides additional rules specific to e-retailers. First, the law requires that the following information are made available on an e-retailer’s homepage:

  • Corporate and trade or business name
  • Address of either the place of business or physical shop
  • Contact information of the e-retailer
    • Mobile or landline number
    • Email address
  • Details of membership in any professional body or other relevant institutions the e-retailer is registered with, if applicable 

E-retailers are likewise required by the law to take the necessary precautions in order to protect the data privacy of its customers in accordance with the Data Privacy Act of 2012. This means e-retailers are covered by the provisions stated within the aforementioned act.