Internet Transactions Act Philippines (R.A. 11967): What Online Sellers Must Know

The Internet Transactions Act of 2023 (Republic Act No. 11967) is the Philippines' first comprehensive law governing e-commerce. It applies to business-to-business and business-to-consumer internet transactions where one party is in the Philippines or where a digital platform, e-retailer, or online merchant is availing of the Philippine market. The law does not cover online media content or consumer-to-consumer transactions. For online sellers, this law creates clear obligations, establishes liability rules, and empowers the Department of Trade and Industry (DTI) to regulate e-commerce through a new E-Commerce Bureau.

Who Is Covered Under R.A. 11967?

The law covers online merchants, e-retailers, e-marketplaces, and digital platforms. An online merchant sells goods or services through an e-marketplace or third-party platform. An e-retailer sells directly to consumers through its own website, webpage, or application. A seller becomes an online merchant if it offers goods outside its own website through a third-party platform.

The law has extra-territorial application. A foreign seller who avails of the Philippine market and establishes minimum contacts is subject to Philippine laws, even without legal presence in the country. The law also requires equal treatment — online businesses cannot enjoy more favorable treatment than offline enterprises.

Key Obligations for Online Merchants and E-Retailers

Section 23 of the Act spells out the responsibilities of e-retailers and online merchants:

• Indicate prices consistent with Article 81 of the Consumer Act of the Philippines (R.A. 7394)
• Deliver goods in the same condition, type, quantity, and quality as described, including functionality, compatibility, and fitness for purpose
• Include accessories and manuals as advertised, with information in Filipino and/or English
• Ensure digital goods have standard qualities and performance features for functionality, compatibility, interoperability, accessibility, continuity, and security
• Publish business information on the homepage: corporate and trade name, physical address, and contact details including a mobile or landline number and valid e-mail address
• Submit information to the Bureau with at least one government identification card or registration document
• Issue paper or electronic invoices or receipts for all sales
• Maintain a redress mechanism for handling consumer complaints

Obligations of E-Marketplaces and Digital Platforms

E-marketplaces must ensure transactions are clearly identifiable as e-commerce, identify the person on whose behalf the transaction is made, and disclose promotional offers and conditions. They must require online merchants to submit valid government identification or business registration documents, geographic address, and contact details before listing.

E-marketplaces must also maintain an updated list of registered merchants, protect consumer data privacy under the Data Privacy Act of 2012 (R.A. 10173), prohibit sale of regulated goods without permits, and provide an effective redress mechanism. Digital platforms that do not retain oversight over transactions must enable consumers to distinguish commercial from private accounts and require merchants to indicate product name, brand, price, description, condition, and contact information.

Liability Rules: Who Pays When Something Goes Wrong

E-retailers and online merchants are primarily liable for indemnifying consumers in civil actions or administrative complaints arising from internet transactions. The e-marketplace or digital platform is treated as one and the same as the merchant if both are the same entity.

E-marketplaces and digital platforms are subsidiary liable when they fail to exercise ordinary diligence in their obligations, fail to act expeditiously in removing infringing goods or content subject to a takedown order, or when the merchant has no assets to answer for the claim.

Consumer Remedies and the Internal Redress Mechanism

Consumers may pursue repair, replacement, refund, or other remedies under the Consumer Act of the Philippines for defects, malfunctions, or loss without their fault. When a consumer avails replacement or refund, the merchant is entitled to the return of the original goods without cost to the consumer.

Before filing a complaint in court or with a government agency, an aggrieved party must first avail of the internal redress mechanism of the platform, e-marketplace, or e-retailer. This mechanism is deemed exhausted if the complaint remains unresolved after seven calendar days from filing.

DTI Enforcement Powers

The DTI Secretary can issue compliance orders requiring conformity with the Act, the Consumer Act, or other DTI issuances. The Secretary may also issue ex parte takedown orders directing removal of listings involving prohibited goods, goods subject to cease and desist orders, reposted listings previously taken down, or transactions threatening public safety. The violating entity must be heard within 48 hours, and the order lasts a maximum of 30 days unless extended or made permanent by court order.

The DTI can maintain a publicly accessible blacklist of websites, webpages, applications, or social media accounts that fail to comply with orders. The E-Commerce Bureau also handles complaints, referring them to appropriate agencies under a "no-wrong-door policy."

Frequently Asked Questions

Does R.A. 11967 apply to small online sellers on social media? Yes. The law covers online merchants selling through digital platforms, including social media platforms. If you sell goods or services in the ordinary course of business to Philippine consumers, you are covered.

What happens if a seller does not comply with the law? The DTI can issue compliance orders, takedown orders, and blacklist non-compliant businesses. Failure to comply may result in penalties under Section 29 of the Act and other applicable laws.

Are consumer-to-consumer sales covered? No. The law expressly excludes consumer-to-consumer transactions done for personal, family, or household purposes and not in the ordinary course of business.

Practical Takeaways

• Register and verify your business details with e-marketplaces, including valid government identification and contact information
• Publish required information on your own website if you are an e-retailer: business name, physical address, and contact details
• Describe products accurately — goods must match their description, samples, and specifications
• Issue receipts or invoices for every sale, whether paper or electronic
• Set up an internal complaint mechanism and respond within seven calendar days to avoid escalation to courts or government agencies
• Understand your liability — as the primary seller, you are responsible for indemnifying consumers; platforms may share liability if they fail their own duties

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.