Online Consumer Protection in the Philippines: Rules Under the Internet Transactions Act

Online consumer protection in the Philippines is governed mainly by Republic Act No. 11967, the Internet Transactions Act of 2023, which regulates business-to-business and business-to-consumer internet transactions where one party is in the Philippines or the digital platform, e-retailer, or online merchant is availing of the Philippine market. It builds on Republic Act No. 7394, the Consumer Act of the Philippines. Together, these laws give online buyers remedies such as repair, replacement, or refund, impose obligations on sellers and platforms, and create a complaints and enforcement system under the Department of Trade and Industry (DTI).

Who and what the law covers

The Internet Transactions Act applies to internet transactions within the DTI's mandate. Under Section 3, it covers business-to-business and business-to-consumer transactions, but not online media content or consumer-to-consumer (C2C) transactions, which are transactions between end-users for personal, family, or household purposes and not done in the ordinary course of business.

Coverage extends to foreign sellers. Under Section 5, a person who engages in e-commerce and avails of the Philippine market to the extent of establishing minimum contacts is subject to Philippine laws and cannot evade liability despite having no legal presence in the country.

Section 6 also requires that online and offline commercial activities be treated equally — e-commerce businesses should not enjoy more favorable treatment, nor be placed at a disadvantage, compared with offline enterprises.

Your rights as an online consumer

If goods are defective, malfunction, are lost without your fault, or fail to conform with a warranty, Section 20 gives you the right to pursue repair, replacement, refund, or other remedies under the Consumer Act or other relevant laws.

If you choose replacement or refund, the online merchant is entitled to the return of the original goods, at no cost to you, within a reasonable period from receipt, unless the parties agree otherwise. If a refund has already been paid but the goods cannot be returned because of your fault, you must reimburse the amount received, subject to a proportionate reduction in price if appropriate.

You also have duties. Under Section 19, you must exercise ordinary diligence in any internet transaction. If delivery is involved, you generally cannot cancel confirmed orders once the items are paid for, or when perishable goods are already with a third-party delivery service or in transit — unless you authorized the crediting of the amount despite cancellation, you reimburse the delivery service as a precondition, the transaction allows cancellation for a fee, or the parties agree otherwise.

Obligations of online sellers and e-marketplaces

E-retailers and online merchants must, among others, indicate the price of goods and services offered consistent with the Consumer Act, ensure goods are received in the same condition, type, quantity, and quality as described, deliver goods with their accessories and instructions, issue paper or electronic invoices or receipts for all sales, and maintain an accessible and efficient redress mechanism for complaints (Section 23).

E-marketplaces must ensure transactions on their platform are clearly identifiable as e-commerce, require online merchants to submit identifying information before listing, maintain and regularly update a list of registered merchants, protect consumer data privacy under the Data Privacy Act of 2012, and provide an effective redress mechanism (Section 21).

Who is liable when something goes wrong

Under Section 25, the e-retailer or online merchant is primarily liable for indemnifying the online consumer in civil actions or administrative complaints. The e-marketplace or digital platform's liability is treated as one and the same as the online merchant only upon a finding that both are the same entity.

An e-marketplace or digital platform that facilitated the transaction is subsidiarily liable under Section 26 if it failed to exercise ordinary diligence in complying with its obligations, failed after notice to act expeditiously in removing or disabling access to infringing or takedown-ordered goods, or failed to provide the contact details of an online merchant with no legal presence in the Philippines despite notice. Subsidiary liability is limited to the damages suffered as a direct result of the transaction.

Platforms are solidarily liable under Section 27 if they fail, after notice, to act expeditiously to remove or disable access to goods or services that are prohibited by law, imminently injurious, unsafe, or dangerous.

How to complain and claim damages

Section 24 requires an aggrieved party to avail of the internal redress mechanism of the digital platform, e-marketplace, or e-retailer before filing a complaint with any court or government agency or resorting to alternative dispute resolution. That mechanism is deemed exhausted if the complaint remains unresolved after seven (7) calendar days from filing.

Under Section 28, a consumer may claim damages by filing a case before the court or the DTI within two (2) years from the time the cause of action arose. The right to damages is governed by the Civil Code, the Consumer Act, and other existing laws.

The DTI also has enforcement powers, including issuing compliance orders and takedown orders, and maintaining a blacklist of non-compliant online businesses. The E-Commerce Bureau receives and refers consumer complaints consistent with the DTI's no-wrong-door policy (Section 8).

Frequently asked questions

Can I get a refund for a defective item bought online? Yes. Under Section 20 of the Internet Transactions Act, you may pursue repair, replacement, refund, or other remedies under the Consumer Act if the item is defective, malfunctions, is lost without your fault, or fails to conform with a warranty.

Do I need to complain to the seller first before going to the DTI? Yes. Section 24 requires you to avail of the platform's or seller's internal redress mechanism first. It is considered exhausted if unresolved after seven calendar days.

How long do I have to file a claim for damages? Section 28 allows a consumer to claim damages before the court or the DTI within two (2) years from the time the cause of action arose.

Practical takeaways

• The Internet Transactions Act of 2023 covers business-to-business and business-to-consumer online transactions, but not consumer-to-consumer transactions or online media content.
• Online consumers may seek repair, replacement, or refund for defective goods under Section 20.
• E-retailers and online merchants bear primary liability; platforms may be subsidiarily or solidarily liable in specific circumstances.
• The internal redress mechanism must be exhausted first, and it is deemed exhausted after seven calendar days.
• Claims for damages must be filed within two years from the time the cause of action arose.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• REPUBLIC ACT NO. 7394 - THE CONSUMER ACT OF THE PHILIPPINES

• REPUBLIC ACT NO. 11967 - AN ACT PROTECTING ONLINE CONSUMERS AND MERCHANTS ENGAGED IN INTERNET TRANSACTIONS, CREATING FOR THIS PURPOSE ELECTRONIC COMMERCE BUREAU, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES

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