THE Department of Trade and Industry (DTI) wants legislators to pass a law regulating the operations of e-commerce sites and imposing stiffer penalties on consumer rights violations.
Trade Undersecretary Ruth B. Castelo said it is high time that operations of online malls, such as Shopee, are covered under a law. Shopee is under fire for allegedly changing midway the promo mechanics of its meet and greet event with popular South Korean girl group Blackpink.
“We are including some general provisions on e-commerce in the proposed revisions to the Consumer Act, but a separate law focused on the platforms would be necessary,” Castelo told the BusinessMirror.
Castelo said the law must require e-commerce platforms to be registered with the Securities and Exchange Commission either as a corporation, partnership or single proprietorship. Both national and local authorities should also partake in the authorization and monitoring of their operations.
“These entities should likewise be accredited and given a license to operate, maybe by DICT [Department of Information and Communications Technology] before they can commence operations,” Castelo said. “Regulation and administration should be with DICT. Business permits should also be issued by the LGU that has jurisdiction over the principal address for tax purposes,” she added.
The trade official also proposed the imposition of heavier penalties on consumer rights violations to uphold liability and accountability among e-commerce sites.
Laban Konsyumer Inc. President Victorio Mario A. Dimagiba also batted for the passage of a law similar to House Bill 2646 filed in the 17th Congress by Rep. Wes Gatchalian of the First District of Valenzuela City. HB 2646 seeks to protect consumers in doing business with online sellers. Under the measure, consumers are granted several rights in transacting with e-commerce platforms, including the right to information on the product, its price and its seller, as well as the right to cancel payment in cases of fraud.
“There is a pending bill authored by the Gatchalian brothers on online commerce protection. Laban Konsyumer had listed the bill [for] refile for the next Congress,” Dimagiba said in a text message.
Shopee’s case
The DTI is investigating Shopee for possible violations of the Consumer Act, as hundreds of patrons reportedly spent over P200,000 to qualify for a spot in the online mall’s meet and greet with Blackpink on Thursday.
Shopee launched a promo wherein top buyers within a certain period will either get a pass for the meet and greet or go onstage for a close encounter with members of the girl group. However, it claimed its computer system made an error and mixed up the list of top spenders, and this resulted in the eventual revocation of the promised tickets.
The DTI is assessing whether Shopee, as alleged by some buyers, changed midway the promo mechanics, including the deadline for all purchases to May 25 from June 1 originally.
Shopee is facing a possible fine of up to P300,000 if proven it changed promo mechanics on the last minute. It could also be penalized up to P300,000 for each complaint received by the DTI.
Road map on course
In spite of the fiasco, Trade Secretary Ramon M. Lopez said this will not in any way impact on the growth of e-commerce in the Philippines.
Under the Philippine E-Commerce Roadmap 2016-2020, the government is targeting to increase the contribution to GDP of e-commerce to 25 percent by 2020, from 10 percent in 2015.
This should translate to at least 100,000 micro, small and medium enterprises capable of transacting online and 40 percent of Internet users doing e-commerce.
“I don’t think it would affect the trend toward increasing e-commerce, especially if the platform is willing to immediately compensate the aggrieved parties to keep the trust and credibility of their brand,” Lopez said in a text message. Shopee is trying to strike settlement deals with its patrons who were left out of the list. It is reportedly offering to fly one to Thailand for a Blackpink concert.