Search for:

In brief

Various agencies led by the Department of Trade and Industry (DTI) have signed Joint Administrative Order No. 24-03, Series of 2024 containing the Implementing Rules and Regulations (IRR) of Republic Act No. 11967, or The Internet Transactions Act of 2023 (ITA).

The ITA is intended to regulate e-commerce, protect consumer rights and data privacy, and uphold intellectual property rights. (See our client alert on the ITA here).

The IRR clarifies the scope and coverage of the ITA, the enforcement powers of the DTI vis-Ă -vis other agencies, and the applicable procedure for imposition of fines. It also sets out the Codes of Conduct for online businesses and online consumers, and provides additional requirements and obligations.

The IRR is currently in effect. However, there is an 18-month transitory period granted by the ITA for affected parties to comply with the requirements of the law.


Key takeaways

The IRR provides additional guidelines that are expected to aid in the implementation of the ITA, which applies to all Business-to-Business (B2B) and Business-to-Consumer (B2C) internet transactions within the mandate of the DTI. In particular, the IRR clarifies the coverage of the ITA by defining key terms such as “availment of the Philippine market” and “minimum contacts”. The IRR likewise imposes additional requirements and obligations, which must be noted by affected parties to ensure compliance with the new regulatory regime.

Businesses engaged in B2B or B2C internet transactions should assess whether their current business models comply with the new requirements and obligations under the ITA and the IRR. Furthermore, businesses should identify whether aspects of their operations fall within the ITA’s definitions of digital platform, e-marketplace, or e-retailer or online merchant, each of which is governed by separate sets of requirements and obligations.

Quisumbing Torres is able to advise on the regulatory requirements under the ITA and the IRR, and assist in assessing existing procedures and policies, with a view to ensuring compliance.

In more detail

The salient provisions of the IRR are discussed below.

  1. Scope and coverage

The ITA provides that it applies to all B2B and B2C internet transactions within the mandate of the DTI, where one 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.

The IRR defines “availment of the Philippine market” as any action or conduct that leads to, or indicates the intention to transact with persons or businesses located in the Philippines including, but not limited to:

  1. Advertising directed to the Philippine market
  2. Soliciting, allowing or receiving within the Philippines orders, payments and deliveries (i.e., soliciting orders, allowing or receiving payments, making deliveries)
  3. Contracting with third parties to fulfil orders
  4. Providing technical or customer support to customers in the Philippines
  5. Procuring telecommunications services, bandwidth, or infrastructure

It further defines “minimum contacts” as any touchpoint or interaction with any potential or actual customer, whether an individual, partnership, corporation or business, located in the Philippines, regardless of residence or citizenship. Minimum contacts are deemed established if users in the Philippines are allowed to access and use a digital platform, and permitted to exchange information, goods or services while in the Philippines.

The IRR further clarifies the scope and coverage of the ITA by establishing a presumption that the following are considered B2C transactions:

  1. When a person sells or offers to sell a product or service through an organized business entity (e.g., uses a business name other than the seller’s real name with a barangay or Local Government Unit permit, issues a Bureau of Internal Revenue registered receipt, uses a logo, etc.)
  2. When a person sells or offers to sell a product or service as a continuous business activity to generate income
  3. When a person engages in e-commerce by “doing business” as defined by Republic Act No. 7042, or the Foreign Investments Act of 1991, as amended
  4. When a person engages in transactions not for personal, family or household purposes

It further provides that the value, frequency and volume of sale or offer for sale of products, goods, and services may be considered in determining the existence of a C2C transaction.

  1. Exclusions

The IRR clarifies that the following are not covered by the ITA:

  1. C2C internet transactions
  2. Transactions that do not constitute e-commerce, such as those solely and exclusively executed, consummated, and perfected offline
  3. A foreign entity that does not avail of the Philippine market through e-commerce
  4. A domestic entity that does not avail of the Philippine market through e-commerce
  5. Online media content, except that live-selling shall be considered advertising and the monitoring of live-selling by the DTI shall not be considered regulation of content nor censorship of online media
  1. Obligations of digital platforms, e-marketplaces, and e-retailers and online merchants

The IRR reiterates and expounds the sets of obligations that each apply to: (i) digital platforms that do not retain oversight over the consummation of the transaction; (ii) e-marketplaces, or digital platforms that retain oversight over the consummation of the transaction; and (iii) e-retailers and online merchants.

  1. Enforcement powers of the DTI vis-Ă -vis other agencies

The ITA confers solely upon the DTI secretary the power to issue summons, subpoenas, compliance orders, takedown orders, and blacklist orders. However, the IRR clarifies that the E-Commerce Bureau and other regulatory agencies may recommend the issuance of these processes based on their respective investigations.

  1. Applicable procedure for imposition of fines

The IRR adopts the Simplified and Uniform Rules of Procedure for Administrative Cases filed with the DTI for Violations of the Consumer Act of the Philippines and Other Trade and Industry Laws, as amended, as the governing procedure for the imposition of administrative fines as penalties provided under the ITA.

  1. Codes of conduct for online businesses and online consumers

The IRR provides Codes of Conduct for online businesses and online consumers, in the form of lists of general guidelines in engaging in e-commerce or availing of e-commerce goods or services. The IRR expressly states that the lists are non-exclusive. It also requires all persons engaged in e-commerce and online consumers to act with justice, give everyone his due, and observe honesty and good faith in the exercise of their rights and in the performance of their duties.

  1. Additional requirements and obligations

The IRR imposes the following requirements and obligations that are not explicitly provided under the ITA:

Digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce in the Philippines or purposely availing of the Philippine market are obliged to submit all required information to the E-Commerce Bureau upon establishment of the Online Business Database.

E-marketplaces are mandated to require online merchants to submit their Certificate of Registration to the Bureau of Internal Revenue (in addition to the names of online merchants with identification documents, address, contact details, and professional details required under the ITA).

Digital platforms are obliged to require online merchants to indicate where the goods are produced or manufactured (in addition to the names and brands of the goods or services, prices, descriptions, condition, and contact information of the online merchant required under the ITA).

Author

Donemark Calimon is a partner and the head of Quisumbing Torres' Dispute Resolution Practice Group and the Industrials, Manufacturing & Transportation Industry Group. Donemark has 19 years of experience in dispute resolution, including civil, criminal, corporate and regulatory litigation, and commercial arbitration. He is one of the founders of the Philippine Institute of Arbitrators (PIArb) and is an accredited arbitrator of the Philippine Dispute Resolution Center, Inc. (PDRCI). He is also an accredited arbitrator of the Construction Industry Arbitration Commission (CIAC). He was appointed as Member of the Panel of Arbitrators of the Singapore International Arbitration Center (SIAC). He was also recently appointed Secretary General of the Philippine International Center for Conflict Resolution, an alternative dispute resolution (ADR) center set up by the Integrated Bar of the Philippines to provide arbitration and ADR services and facilities.

Author

Bienvenido Marquez III is a partner in Quisumbing Torres' Intellectual Property, Data and Technology Practice Group. He also co-heads the Consumer Goods & Retail Industry Group and is a member of the Technology, Media & Telecommunications Group. He participates in initiatives of Baker & McKenzie International of which Quisumbing Torres is a member firm. He is a member of Baker McKenzie's Asia Pacific Intellectual Property Business Unit for Brand Enforcement. He is immediate Past President of the Philippine Chapter of the Licensing Executives Society International (2019-2021), and is currently co-chair of the LESI Asia Pacific. He is also a member of the Anti-Counterfeiting Committee of the International Trademarks Association (INTA). He has been appointed as member of the INTA Asia Global Advisory Council (GAC) for 2022 to 2023, making him the only Philippine representative on the council.

Bien has vast experience in handling IP enforcement litigation, trademark and patent prosecution and maintenance, copyright, data privacy, information security, IT, telecommunications, e-commerce, electronic transactions, cyber security and cybercrime. He has been consistently ranked as a leading individual for Intellectual Property and TMT in Legal 500 Asia Pacific, Chambers Asia Pacific, asialaw Leading Lawyers, Managing IP Stars, Asia IP, and World Trademark Review. He was also recognized as a Volunteer Service Awardee by INTA in 2018.

Author

Divina Ilas-Panganiban, CIPM is a partner and the head of Quisumbing Torres’ Intellectual Property, Data and Technology Practice Group and co-heads the Technology, Media & Telecommunications (TMT) Industry Group. She participates in initiatives of Baker & McKenzie International of which Quisumbing Torres is a member firm. She is a member of Baker & McKenzie International's Asia Pacific TMT, and the Asia Pacific Intellectual Property Steering Committees.
Divina is a Certified Information Privacy Manager by the International Association of Privacy Professionals (IAPP). She currently serves as the Vice-President and Director of the Philippine Chapter of the Licensing Executives Society International, the Regional Vice-chair of the LESI's Education Committee, the Co-chairperson of the Committee on Intellectual Property Rights of The American Chamber of Commerce of the Philippines, and the Chairperson of the IAPP KnowledgeNet Chapter for the Philippines.
Divina was recently appointed to be a member of the Advisory Council for Intellectual Property (ACIP) of the Intellectual Property Office of the Philippines (IPOPHL). The ACIP is an advisory board composed of a select group of people from different sector to which IP is of great value. She was recently recognized in the Hall of Fame for Best External Lecturers by the IP Academy of the IPOPHL.
Divina just finished her stint as the chair the Unreal Campaign of the International Trademarks Association (INTA) for East Asia and the Pacific and continues to organize anti-counterfeiting activities in schools and universities around the country, educating the youth about the importance of intellectual property protection.
Divina is a multi-awarded lawyer with a stellar track record in the IP, data and technology fields. She has garnered numerous awards and accolades, including the Woman Lawyer of the Year by the ALB Philippine Law Awards 2023. She has been cited as leading lawyer for intellectual Property and TMT by The Legal 500 Asia Pacific, Chambers Asia Pacific, Managing IP, World Trademark, Asialaw and IAM Patent 1000, among others. Known for her exceptional legal expertise and unwavering commitment to her clients, Divina has established herself as a leader in her profession.

Author

Ina Dominguez is a partner in Quisumbing Torres' Corporate & Commercial/M&A Practice Group. She is also a member of the Technology, Media & Telecommunications and the Energy, Mining & Infrastructure Industry Groups. She advises domestic and foreign clients on issues relating to mergers and acquisitions, commercial law, real estate, technology, mining and natural resources law, energy, and infrastructure projects.
Ina is cited as a Next Generation Partner for Projects and Energy by The Legal 500 for 2023.

Author

Frederick August Jose is a partner in Quisumbing Torres’ Intellectual Property, Data and Technology Practice Group and Technology, Media & Telecommunications. He has 12 years of experience in a wide range of IP and IT corporate and litigation matters.
Frederick is a Certified Information Privacy Professional for Europe by the International Association of Privacy Professionals (IAPP). He has been appointed as a member of the Co-Existence Agreement Sub-Committee of the International Trademark Association (INTA) for the term 2022 to 2023. He actively participates as a speaker in various regional and local seminars and trainings on IP, IT and data privacy in the Philippines. He also teaches summer law courses, and Intellectual Property Law.

Author

Camille Bianca Gatmaitan Santos is a partner in Quisumbing Torres' Dispute Resolution Practice Group. She has 12 years of experience in commercial and criminal litigation, as well as arbitration. She serves as Institute Treasurer of the Philippine Institute of Arbitrators (PIARB) and a member of the Local Steering Committee of the Young International Council for Commercial Arbitration (ICCA). She is an accredited arbitrator of the Wholesale Electricity Spot Market and a member of the Chartered Institute of Arbitrators. Previously, she also served as the Assistant National Secretary of the Integrated Bar of the Philippines, the official organization of all lawyers in the country.

Author

Felicisimo F. Agas III is a senior associate working in Quisumbing Torres’ Intellectual Property, Data and Technology Practice Group and a member of the Technology, Media & Telecommunications Industry Group. He has around 9 years of experience in a wide range of IP and IT corporate and litigation matters.
Prior to taking up law, he also worked as a logistics specialist in the Philippine subsidiary of a Swiss multinational food and beverage company. He graduated with honors, salutatorian in his class at the Ateneo de Manila Law School. He also worked as a Court Attorney for the Supreme Court, the highest court of the Philippine judiciary, in which he assisted in handling complex and novel cases involving IP, data privacy and other commercial law issues.
He actively participates as a speaker in various regional and local seminars and trainings on IP, IT and data privacy in the Philippines. He also teaches at the commercial law department of the Ateneo de Manila Law School, one of the most prestigious law schools in the Philippines. He has taught subjects on legal research and insurance law, and currently teaches Data Privacy Law in the same university.
Felicisimo was recently cited in the 2024 edition of IAM Patent 1000 as a highly recommended individual for patents in the Philippines.

Author

Oswald Imbat is an associate in Quisumbing Torres' Dispute Resolution Practice Group. Prior to joining the firm, he was a senior associate in a medium-sized general practice law firm. Oswald obtained his juris doctor degree from the University of the Philippines in 2015 and was admitted to the Philippine bar in 2016.

Author

Alvin Tan is an associate with the Corporate & Commercial/M&A Practice Group and Consumer Goods & Retail Industry Group at Quisumbing Torres. He ranked sixth in his batch upon graduation from the Ateneo de Manila Law School and placed 11th in the 2018 bar examinations.