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E-Commerce
E-commerce describes the process of buying, selling, transferring, or exchanging products, services, and/or
information via computer networks, including the Internet. E-business refers to a broader definition of e-
commerce, not just the buying and selling of goods and services, but also servicing customers, collaborating
with business partners, conducting e-learning, and processing electronic transactions. Electronic commerce
can take several forms depending on the degree of digitization (the transformation from physical to digital).
Brief History of E-Commerce:
 1970’s – E-commerce meant the facilitation of commercial transactions electronically, using technology
such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT), allowing businesses to send
commercial documents like purchase orders or invoices electronically.
 1980’s – The growth and acceptance of Credit cards, the growth of Automated Teller Machines or ATM,
Telephone Banking, Airline Reservation System.
 1990’s – The internet commercialized and users flocked to participate in the form of dot-coms’ or Internet
start-ups. Innovative applications ranging from online direct sales to e-learning experiences.
 2000’s – Many business companies offered their services through the World Wide Web. The E-commerce
Word was born.
 2010’s – E-commerce business is all over. (E.g. eBay, Amazon, OLX, Lazada, Zalora)
Types of E-Commerce
 Business to consumer (B2C) – Online transactions are made between businesses and individual
consumers. (E.g. eBay, Amazon, OLX)
 Businesses make online transactions with other businesses.
 Some of the other categories are:
 Consumer-to-consumer (C2C)
 Mobile Commerce (m-commerce)
 E-Learning
 E-Government
Benefits of E-Commerce
Benefits to Organizations
 Global Reach
 Cost Reduction
 Supply Chain Improvements
 Extended Hours: 24/7/365
 Customization
 Improved Customer Relations
Benefits to Consumers
 More products and services
 Cheaper products and services
 Instant delivery
 Information availability
 Participation in auctions
 24/7/365 Availability
Disadvantages of E-Commerce
 There can be a lack of system security, reliability, or standards because of poor implementation of e-
Commerce.
 In many countries, such as the Philippines. Network bandwidth might cause an issue as there is
insufficient telecommunication bandwidth available.
 There could be software/hardware compatibility issues or some E-Commerce software may be
incompatible with some operating system or any other component.
 Initial Cost: The cost of creating/building E-commerce application in-house may be very high. There could
be a delay in launching the E-Commerce application due to mistakes and lack of experience.
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 User Resistance: User may not trust the site being an unknown faceless seller. Such mistrust makes it
difficult to make users switch from physical stores to online/virtual stores.
 Security/Privacy: Difficult to ensure security or privacy on online transactions.
 Lack of touch or feel of products during online shopping.

Most Popular Online Shopping Sites in the Philippines

Lazada – http://www.lazada.com.ph
Lazada is a major e-commerce presence not just in the Philippines, but across Southeast Asia. Backed by
German startup machine Rocket Internet, the site offers a wide range of items, including fashion apparel,
electronics, car accessories, and home appliances.
OLX Philippines – http://www.olx.com.ph
In 2014, the e-commerce scene was rocked when classifieds giants Naspers, Schibsted Media, Telenor, and
Singapore Press Holdings put an end to their rivalry and decided to join forces. Four countries were affected
by this change: Indonesia, Thailand, the Philippines, and Bangladesh. In the Philippines, the deal translated
into the merging of brands OLX (formerly Sulit.com.ph) and Ayosdito.
Cebu Pacific – http://www.cebupacificair.com
Philippine airline company Cebu Pacific launched in 1996 but took off in earnest as a low-cost carrier in the
mid-2000s. It has since offered customers discounted e-tickets they can purchase online using a credit card.
Zalora – http://www.zalora.com.ph
Zalora is another Rocket Internet-funded e-commerce company that has expanded fast in Asia, with funding
of US$238 million to date. The three-year-old website focuses on fashion and footwear. Last year, it launched
a marketplace for independent merchants to sell their products through the store.
Metrodeal – http://www.metrodeal.com
Metrodeal is a daily deals site offering discounts for spas, restaurants, cinemas, salons, travel and tours, and
more. The company was acquired by Tokyo-based outsourcing giant Transcosmos last year.
eBay – http://www.ebay.com
Ebay features online auctions and shopping. Users may buy and sell a broad variety of new or used items such
as electronics, cars, fashion apparel, collectibles, sporting goods, digital cameras, baby items, and coupons.
Lamudi – http://www.lamudi.com.ph
Lamudi is a site that connects sellers, buyers, and renters of homes, land, and commercial properties. It’s an
international startup born from the Rocket Internet stable.
Carmudi – http://www.carmudi.com.ph
Also part of Rocket Internet, Carmudi is a vehicle classifieds site where buyers and sellers of cars, motorcycles,
and commercial vehicles can link up.
Autodeal – http://www.autodeal.com.ph
Autodeal is another site for prospective car buyers, but it goes beyond listings. It helps buyers compare
vehicles and find the latest promotions and financing schemes to ensure they get the best deal. The site also
offers vehicle reviews and buying tips.
Zipmatch – http://www.zipmatch.com
Backed by VC firms 500 Startups and Monk’s Hill Ventures, ZipMatch is a real estate portal that does a lot
more work than the usual classifieds. The startup has interactive pages containing mainly property reviews
and recently it launched a service allowing property sellers and brokers to showcase homes in virtual reality.

RA 8792: E-Commerce Law

The Electronic Commerce Act of 2000 – RA 8792
RA8792 aims to facilitate domestic and international dealings, transactions, arrangements, agreements,
contracts and exchanges and storage of information through the utilization of electronic, optical and similar
medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic

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documents relate to such activities and to promote the universal use of electronic transaction in the
government and general public.
The four (4) strategic areas which were keys to technological development include ICT infrastructure and
systems, the e-business environment, human resources/IT education and the legal policies. In the current
Philippine scenario, few of the Filipinos have access to the Internet. Some of Pampanga’s wooden furniture
businesses, for example, cannot even avail of the Internet because of the lack of telephone lines in the area.
Republic Act (RA) 8792 or E-Commerce Act of 2000 made the country one of the first to enact a law governing
e-commerce transaction. The Department of Information and Communications Technology provides laws
protecting e-commerce security and addressing problems of classification of firms in the telecommunications
industry.
Scope of RA 8792
Republic Act 8792 or the Electronic Commerce Law was enacted last June 14, 2000. Efforts for its passage
started as early as 1992 with the Electronic Evidence Act. The law defines Philippine policy on electronic
transactions to enable the country’s players and consumers to actively participate in electronic trade. It was
signed by Former Pres. Joseph Estrada on June 14, 2000. The general objective is to facilitate domestic or
foreign agreements and transactions digitally, through monitoring of the authenticity and reliability of
electronic documents.
Hacking and Cracking was placed under RA 8792 included under Part V, Section 33a. This includes the
definition and penalties for violators. In June 2001 the Philippine National Bureau of Investigation announced
their intention to bring the first formal hacking and piracy charges under the Electronic Commerce Act. The
charges involve two former employees of a business school who allegedly broke into the school's computer
system and stole an undisclosed amount of proprietary digital material
The implementing bodies of the act are:
• Department of Trade and Industry
• Department of Budget and Management
• Bangko Sentral ng Pilipinas (BSP)
In coordination with:
• Department of Transportation and Communications
• National Telecommunications Commission
• National Computer Center
• National Information Technology Council
• Commission on Audit
• Private Sector

RA 8792 Terminologies
For the purpose of understanding the contents of the Act, the Act itself provides a definition of terms used in
the act. The following terms are defined, as follows:
 "Addressee" - Refers to a person who is intended by the originator to receive the electronic data
message or electronic document. The term does not include a person acting as an intermediary with
respect to that electronic data message or electronic document.
 "Computer" - Refers to any device or apparatus which, by electronic, electro-mechanical or magnetic
impulse, or by other means, is capable of receiving, recording, transmitting, storing, processing,
retrieving, or producing information, data, figures, symbols or other modes of written expression
according to mathematical and logical rules or of performing any one or more of those functions.
 "Electronic data message" - Refers to information generated, sent, received or stored by electronic,
optical or similar means.
 "Information and communications system" - Refers to a system intended for and capable of
generating, sending, receiving, storing or otherwise processing electronic data messages or electronic
documents and includes the computer system or other similar device by or in which data is recorded

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or stored and any procedures related to the recording or storage of electronic data message or
electronic document.
 "Electronic signature" - Refers to any distinctive mark, characteristic and/or sound in electronic form,
representing the identity of a person and attached to or logically associated with the electronic data
message or electronic document or any methodology or procedures employed or adopted by a person
and executed or adopted by such person with the intention of authenticating or approving an
electronic data message or electronic document.
 "Electronic document" - Refers to information or the representation of information, data, figures,
symbols or other modes of written expression, described or however represented, by which a right is
established or an obligation extinguished, or by which a fact may be proved and affirmed, which is
received, recorded, transmitted, stored, processed, retrieved or produced electronically.
 "Electronic key" - Refers to a secret code, which secures and defends sensitive information that
crosses over public channels into a form decipherable only with a matching electronic key.
 "Intermediary" - Refers to a person who, on behalf of another person and with respect to a particular
electronic document sends, receives and/or stores or provides other services in respect of that
electronic document.
 "Originator" - Refers to a person by whom, or on whose behalf, the electronic document purports to
have been created, generated and/or sent. The term does not include a person acting as an
intermediary with respect to that electronic document.
 "Service provider"- Refers to a provider of online services or network access, or the operator of
facilities therefore, including entities offering the transmission, routing, or providing of connections
for online communications, digital or otherwise, between or among points specified by a user, of
electronic documents of the user’s choosing; or the necessary technical means by which electronic
documents of an originator may be stored and made accessible to a designated or undesignated third
party.

Provisions of E-commerce Law

Provisions of the E-Commerce Law include legal recognition of electronic documents, electronic data
messages, and electronic signatures, retention, and storage of documents in electronic form, recognition and
validity of electronic contracts, and provision of guidelines for use of transport documents in the carriage of
goods.
The law also gave a two-year mandate for government to have the capability to transact its business
electronically. The e-commerce law also served as a directive for the Department of Trade and Industry to
function as the country’s e-commerce authority. The penalties for crimes such as hacking, cracking, and piracy
offenses were also defined in this law.

RA 8792 has a total of 42 sections. Section 33 defines the penalties for violations done in relation to e-
commerce
1. Hacking or cracking which refers to unauthorized access into or interference in a computer
system/server or information and communication system; or any access in order to corrupt, alter,
steal, or destroy using a computer or other similar information and communication devices, without
the knowledge and consent of the owner of the computer or information and communications
system, including the introduction of computer viruses and the like, resulting in the corruption,
destruction, alteration, theft or loss of electronic data messages or electronic document shall be
punished by a minimum fine of one hundred thousand pesos (P100,000.00) and a maximum
commensurate to the damage incurred and a mandatory imprisonment of six (6) months to three (3)
years;
2. Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use,
removal, alteration, substitution, modification, storage, uploading, downloading, communication,
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making available to the public, or broadcasting of protected material, electronic signature or

copyrighted works including legally protected sound recordings or phonograms or information
material on protected works, through the use of telecommunication networks, such as, but not
limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a
minimum fine of one hundred thousand pesos (P100,000.00) and a maximum commensurate to the
damage incurred and a mandatory imprisonment of six (6) months to three (3) years;
3. Violations of the Consumer Act or Republic Act No. 7394 and other relevant or pertinent laws through
transactions covered by or using electronic data messages or electronic documents, shall be penalized
with the same penalties as provided in those laws.
4. Other violations of the provisions of this Act, shall be penalized with a maximum penalty of one million
pesos (P1, 000,000.00) or six (6) years imprisonment.

RA 8293 – Intellectual Property Code

Another Philippine IT law is RA 8293, more popularly known as Intellectual Property (IP) code of the
Philippines. Established through RA 8293, or the Intellectual Property Code of the Philippines divided into:
• The Bureau of Patents
• The Bureau of Trademarks
• The Bureau of Legal Affairs
• The Documentation, Information and Technology Transfer Bureau
• The Administrative, Financial and Personnel Services Bureau
The intellectual property code has the task to examine applications for patents for inventions, register utility
models, and industrial designs, examine applications for registration of marks, indication and integrated
circuits register technology transfer arrangements and settle disputes involving technology transport
payments. This also develops and implements strategies to promote and facilitate technology transfer.

Registering Trademark in the IPO

For example, when a person applies for a
trademark, an examination of it will be
done. After filing the application, it takes
around 12 to 18 months before the result
comes out. Other actions such as the
issuance of a notice of allowance and
publication for purposes of opposition,
payment of publication fees, and
publication in official gazette for purpose
of opposition all are included in the
tabulation of the regular time it takes for
these processes.

RA 8293 Terms of Protection

The Intellectual Property Office, formerly the IPO is under the Department of Trade and Industry as provided
in RA8293. Currently, it is now under the Office of the President as per Executive Order No. 39 issued on
October 2001. Other Agencies involved in the registration of certain Intellectual Property Rights are the
National Library and Supreme Court Library and National Plant Variety Protection Board. The terms of
protection state the duration to how long the intellectual property applies. For example, for a patent, the
term of protection is 20 years from the filing date of the application. For utility models, the term of protection
is 7 years from the filing date of the application. For an industrial design, the term of protection is 5 years
from the filing date of the application and may be renewed for not more than two consecutive periods of five
years each from the filing of the application.

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For a trademark, it was mentioned previously that the term of protection is 10 years from the filing date of
the application, provided that a declaration of actual use is filed within three years from the filing date and
within one year after the 5th anniversary. Layout designs have a term of protection that is 10 years from the
filing date of the application. Finally, copyrights have a term of protection of generally the lifetime of the
author and 50 years thereafter.
Different kinds of property, the nature of intellectual property and major intellectual properties
By nature, an intellectual property can be considered such by its nature. By nature, an intellectual property is
a creation of the human mind (Intellect) and/or an intangible property, and/or exclusive rights given by
statutes and/or attended with limitations and exceptions such as time and/or territorial.
According to the WIPO convention, an “Intellectual Property shall include the rights relating to literary, artistic
and scientific works, performances of performing artists, phonograms, and broadcasts, inventions in all fields
of human endeavor, scientific discoveries, industrial designs, trademarks, service marks and commercial
names and designations, must cover protection against unfair competition and all other rights resulting from
intellectual activity in the industrial, scientific, literary or artistic fields.”
The basic principle behind IP code is that there must be a contract between creator and sovereign state,
basically to have a protection for revelation. The IP code balances the rights between the creator and the
public interest by specifying the rights, limitations, and exceptions.
Major intellectual properties include copyright and related rights, industrial property, patents, industrial
designs, trademarks, geographical indications, layout designs/topographies, integrated circuits, trade secrets
and protection of new plant varieties which were all defined earlier.

Different Kinds of Rights

Two (2) kinds of rights exist Moral and economic rights. Moral rights exist to protect the personality of the
author and economic rights exist to bring economic benefits.
Moral rights encompass the right of authorship, right of integrity and inalienable rights.
Economic rights include the right of reproduction which involves making copies and storage in computer
memory, right of distribution or issuance of copies even by digital means, right of communication to the public
which may include public performance or internet communication, adaptation rights which is conversion into
another form, abridgement or condensation, rights to make a cinematograph film or sound recording,
translation rights, rental rights and finally, resale rights for original artistic works. However, there are
exceptions of authors as the owner of rights. The most common exception is an employee in the course of
employment to an employer whether in private, government or an organization.
Copyright protection is automatic once a work is fixed in a tangible medium. Joint authors each have full and
equal copyrights. Copyright can be transferred only in writing. Not all rights have to be given away i.e.
author/copyright rights can be broken apart. No publication or registration or other action in the Copyright
Office is required to secure copyright. There are, however, certain definite advantages to registration.
Copyright is secured automatically when the work is created, and a work is "created" when it is fixed in a copy
or published for the first time.
Literary, dramatic, musical and artistic works published during the lifetime of the author is Life + 60 years. All
other works have a copyright duration of 60 years from the date of publication. Related rights are rights
granted by law to communicators of works to the public. These rights are given to performers and
broadcasting organizations.
Performer’s rights include recording, broadcasting and communicating to the public of a live performance. It
has a copyright duration of 50 years.
Broadcasting organizations have broadcast reproduction rights including re-broadcasting, recording and
communicating to the public. It has a copyright duration of 25 Years.

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REFERENCES:

Lavina, C., Erise, M., Barcenas, C., & Calyua, S. (2012). Ethics for IT. professionals with legal aspects in computing.
Intramuros, Manila: Mindshapers Co., Inc.

Reynolds, G. (2014). Principles of ethics in information technology. Pasig City, Philippines: Cengage Learning
Asia Pte Ltd.
Coleman, S. & Ho, E. (2016). What is electronic commerce? - Definition, types, advantages & disadvantages.
[MP4 Video]. Retrieved from http://study.com/academy/lesson/what-is-electronic-commerce-definition-
types-advantages-disadvantages.html 15 July 2016

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