Lazada calls on Senate to relax bill’s liability clause

By Alyssa Nicole O. Tan, Journalist

LAZADA E-Services Philippines, Inc. on Thursday asked senators to temper the wording of a bill to regulate online transactions, saying making e-commerce platforms like this and Shopee accountable to buyers could make sellers less liable for product defects.

“This greatly reduces the seller’s liability and therefore emboldens potential wrongdoers as they will hide behind the platform and therefore also discourage law enforcement from pursuing the real offender,” Lazada CEO Raymond Alimurung said. , during a hearing in the Senate.

“It also creates an unnecessary differentiation between online and offline. [sellers] because today, shopping centers are not jointly and severally liable for the shortcomings of their tenants,” he added.

Senator Maria Imelda “Imee” R. Marcos, who heads the Economic Affairs Committee, asked if a compromise had been reached on the issue of accountability.

Mr. Alimurung noted that in the House of Representatives version of the bill, the provisions included subsidiary liability and joint and several liability in a specific set of circumstances, particularly involving damage or loss to the customer and the granting civil damages.

“It’s a very specific focus on accountability as opposed to a blanket approach,” he said.

Under several Senate bills relating to a proposed law on Internet transactions, “a market place or a digital e-commerce platform is jointly and severally liable with its listed online merchant, after due notice and hearing due form”, if it does not provide for dispute resolution mechanisms, or take measures to prevent the sale of illegal products.

“The other concern we have other than the decrease in vendor liability… is that it will potentially create unlimited liability on the platforms, which will significantly increase the costs of the platform which will then be passed on to MSMEs (micro, small and medium-sized businesses) and consumers,” Mr. Alimurung said.

He noted that despite due diligence on their part, a seller could still do something illegal before the platform finds out.

While there are mechanisms in place, such as artificial intelligence algorithms that track sellers and remove behavior deemed anti-consumer and fraudulent, this is not entirely preventable, he added.

During the hearing, the Department of Trade and Industry (DTI) asked the senators to remove a clause that tasks it with regulating online transactions.

“We see the need for an online business registry, a trustmark, and a bit of clarification on DTI’s regulatory jurisdiction over digital platforms,” ​​Deputy Secretary Mary Jean T. Pacheco said.

“The DTI respects the mandates of other agencies,” she said, adding that these are best left to carry out their own regulatory functions. These include the central bank of the Philippines and the departments of information and agriculture.

The DTI could intervene, in case the agencies do not exercise their competence in time.

Under the bill, the DTI would have primary regulatory jurisdiction over electronic marketplaces, online retailers, online merchants and other digital platforms that sell or enable the sale or exchange of goods, digital products or services.

Commerce Undersecretary Ruth B. Castelo called for swift passage of the bill, which she said would complement the consumer law.

“This is going to be a great help for consumer protection, especially the creation of an online business register… which will contain information on sellers engaged in e-commerce and internet retailing, which will will allow us to act more easily on [complaints],” she added.

She said the DTI often had to seek cybercrime help from the police because they couldn’t find any trace of the seller after a transaction was concluded.

“The DTI Secretary’s withdrawal powers are also very important so that we can act immediately if we know there is a violation by a trader or platform,” Ms Castelo said.

Ms. Pacheco also pleaded with senators to allocate 40 million pesos under next year’s national budget for the implementation of the e-commerce roadmap which will include webinars, trainings and skills projects. digital.

The Commerce Department’s proposed budget for next year has been cut by 10% to The DTI’s proposed 2023 budget has fallen by 10% to 22.196 billion pesos.

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