On 14 June 2000, President Joseph E. Estrada signed into law R.A. 8792 "An Act Providing For The Recognition And Use of Electronic Commercial And Non-Commercial Transactions, Penalties For Unlawful Use Thereof, And Other Purposes, also known as the "Electronic Commerce Act."
In its Declaration of Policy (Section 2), it is declared that "The State recognizes the vital role of information and communications technology (ICI) in nation building. The Objective and Sphare of Application of the new law are as hereunder stated:
Sec. 3. Objective - This Act 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 data messages or electronic documents related to such activities and to promote the universal use of electronic transactions in the government and by the general public. Sec. 4. Sphere of Application - This Act shall apply to any kind of electronic data message and electronic document used in the context of commercial and non-commercial activities to include domestic and international dealings, transactions, arrangements, agreements, contracts and exchanges and storage of information.
The new law defines in Section 5 thereof what constitutes "electronic data message", "electronic signature" and "electronic document", as follows:
c) "Electronic data message" refers to information generated, sent, received or stored by electronic, optical or similar means.
e) "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.
f) "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.
A) Legal Recognition / Admissibility As Evidence
The new law gives legal recognition to electronic data messages, electronic documents and electronic signatures.
Thus, Section 6, 7 and 8 provides:
Sec. 6. Legal Recognition of Electronic Data Message - Information shall not be denied validity or enforceability solely on the ground that it is in the form of an electronic data message purporting to give rise to such legal effect, or that it is merely incorporated by reference in that electronic data message.
Sec. 7. Legal Recognition of Electronic Documents - Electronic documents shall have the legal effect, validity or enforceability as any other document or legal writing, and(a) Where the law requires a document to be in writing, that requirement is met by an electronic document if the said electronic document maintains its integrity and reliability and can be authenticated so as to be usable for subsequent reference, in that -
- i) The electronic document has remained complete and unaltered, apart from the addition of any endorsement and any authorized change, or any change which arises in the normal course of communication, storage and display; and
- ii) The electronic document is reliable in the light of the purpose for which it was generated and in the light of all relevant circumstances.
- i) There exists a reliable assurance as to the integrity of the document from the time when it was first generated in its final form; and
- ii) That document is capable of being displayed to the person to whom it is to be presented: Provided, That no provision of this Act shall apply to vary any and all requirements of existing laws on formalities required in the execution of documents for their validity.
For evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws.
This Act does not modify any statutory rule relating to the admissibility of electronic data messages or electronic documents, except the rules relating to authentication and best evidence.
Sec. 8. Legal Recognition of Electronic Signatures - An electronic signature on the electronic documents shall be equivalent to the signature of a person on a written document if the signature is an electronic signature and proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic document, existed under which -a) A method is used to identify the party sought to be bound and to indicate said party’s access to the electronic document necessary for his consent or approval through the electronic signature; b) Said method is reliable and appropriate for the purpose for which the electronic document was generated or communicated, in the light of all circumstances, including any relevant agreement; c) It is necessary for the party sought to be bound, in order to proceed further with the transaction, to have executed or provided the electronic signature; and d) The other party is authorized and enabled to verify the electronic signature and to make the decision to proceed with the transaction authenticated by the same.
The foregoing provisions put at rest the legal debate on whether or not Philippine Courts will accept electronic contracts or documents as evidence.
The Rules of Court (Rules 128-134) govern court procedures and processes. Rule 130, at Section 2 of the same, provides that documentary evidence are "those which consist of writings or any material containing letters, words, figures, symbols, or other modes of written expressions offered as proof of its contents." Are electronically generated data or documents covered under the said Rules?
The Supreme Court, in a sedition case (People vs. Burgos, 200 SCRA 67), had occasion to rule on whether evidence submitted in electronic form could be admissible as evidence. Burgos argued that the evidence – contained in diskettes – which the military had sought to introduce against him could not be admissible as the military could have tampered with it. The judge in the lower court agreed with him and disallowed the presentation of the evidence. In the Supreme Court, the lower court was reversed and was directed to admit the evidence. But instead of ruling, however, on whether an electronic –generated evidence was admissible or not, it relied on the presumption of regularity in the performance of public service. It allowed the introduction of the evidence on the ground that there was no showing that the military had tampered with the diskette. Thus, the issue of electronically generated documents/data as evidence was not squarely decided upon.
The new law now expressly provides that for evidentiary purposes, an electronic document shall be the functional equivalent of a written document under existing laws. Under this principle of "functional equivalent" any electronic data message, document or signature, which is the functional equivalent of a written document or original signature, it is now clearly admissible as evidence. The operative words for admissibility are "integrity", "reliability" and "can be authenticated". Thus, Sections 10 and 11 of the new law provides:
Sec. 10. Original Documents - (1) Where the law requires information to be presented or retained in its original form, that requirement is met by an electronic data message or electronic document if:a) the integrity of the information from the time when it was first generated in its final form, as an electronic data message or electronic document is shown by evidence aliunde or otherwise; and b) where it is required that information be presented, that the information is capable of being displayed to the person to whom it is to be presented.
(2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the information not being presented or retained in its original form.
(3) For the purposes of subparagraph (a) of paragraph (1):
- a) the criteria for assessing integrity shall be whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change which arises in the normal course of communication, storage and display; and
- b) the standard of reliability required shall be assessed in the light of the purpose for which the information was generated and in the light of all the relevant circumstances.
Sec. 11. Authentication of Electronic Data Messages and Electronic Documents - Until the Supreme Court by appropriate rules shall have so provided, electronic documents, electronic data messages and electronic signatures, shall be authenticated by demonstrating, substantiating and validating a claimed identity of a user, device, or another entity in an information or communication system, among other ways.
The new law further provides in Section 12 thereof that electronic messages and electronic documents are admissible and have evidential weight. Thus:
Sec. 14. Admissibility and Evidential Weight of Electronic Data Messages or Electronic Documents - In any legal proceedings, nothing in the application of the rules on evidence shall deny the admissibility of an electronic data message or electronic document in evidence -
a. On the sole ground that it is in electronic form; or
b. On the ground that it is not in the standard written form, and the electronic data message or electronic document meeting, and complying with the requirements under Sections 6 or 7 hereof shall be the best evidence of the agreement and transaction contained therein.
In assessing the evidential weight of an electronic data message or electronic document, the reliability of the manner in which it was generated, stored or communicated, the reliability of the manner in which its originator was identified, and other relevant factors shall be given due regard.(a) Carriage Of Goods
With reference to electronic commerce in carriage of goods, the new law provides in Section 26 thereof that "where the law requires that any action (in connection with a contract of carriage of goods) be carried out in writing or by using a paper document, that requirement is met if the action is carried out by using one or more electronic data or electronic documents." Thus, electronic messages or electronic documents may be used as "functional equivalents" of written or paper documents in connection with the following instances:
- i) furnishing the marks, number, quantity or weight of goods;
- the manner and format in which such electronic data messages or electronic documents shall be filed, created, retained or issued;
- where and when such electronic data messages or electronic documents have to be signed, the use of an electronic signature, the type of electronic signature required;
- the format or an electronic data message or electronic document and the manner the electronic signature shall be affixed to the electronic data message or electronic document;
- the control processes and procedures as appropriate to ensure adequate integrity, security and confidentiality of electronic data messages or electronic documents or records or payments;
- other attributes requires of electronic data messages or electronic documents or payment; and
- the full or limited use of the documents and papers for compliance with the government requirements: Provided, That this Act shall by itself mandate any department of the government, organ of state or statutory corporation to accept or issue any document in the form of electronic data messages or electronic documents upon the adoption, promulgation and publication of the appropriate rules, regulations, or guidelines.
- ii) stating or declaring the nature or value of goods;
- iii) issuing a receipt for goods;
- iv) confirming that goods have been loaded;
- i) notifying a person of terms and conditions of the contract
- ii) giving instructions to a carrier;
- i) claiming delivery of goods;
- ii) authorizing release of goods;
- iii) giving notice of loss, or damage to goods;
d) giving any other notice or statement in connection with the performance of the contract;
e) undertaking to deliver goods to a named person or a person authorized to claim delivery;
f) granting, acquiring, renouncing surrendering, transferring or negotiating rights in goods;
g) acquiring or transferring rights and obligations under the contract.
(b) Electronic Transactions In Government
The new law mandates in Section 27 thereof that Government, within two (2) years from the date of effectivity of the Act, must accept/use electronic data messages, electronic documents and electronic signatures. Thus:
SEC. 27. Government Use of Electronic Data Messages, Electronic Documents and Electronic Signatures. – Notwithstanding any law to the contrary, within two (2) years from the date of the effectivity of this Act, all departments, bureaus, offices and agencies of the government, as well as all government-owned and controlled corporations, that pursuant to law require or accept the filing of documents, require that documents be created, or retained and/or submitted, issue permits, licenses or certificates or registration or approval, or provide for the method and manner of payment or settlement of fees and other obligations to the government, shall-
a) accept the creation, filing or retention of such documents in the form of electronic data messages or electronic documents;
b) issue permits, licenses, or approval in the form of electronic data messages or electronic documents;
c) require and/or accept payments, and issue receipts acknowledging such payments, through systems using electronic data messages or electronic documents; or
d) transact the government business and/or perform governmental functions using electronic data messages or electronic documents, and for the purpose, are authorized to adopt and promulgate, after appropriate public hearing and with due publication in newspapers of general circulation, the appropriate rules, regulations, or guidelines, to among others, specify-
Section 32 of the new law underscores the obligation for confidentiality. Thus:
Section 32. Obligation of Confidentiality. – Except for the purposes authorized under this Act, any person who obtained access to any electronic key, electronic data message or electronic document, book, register, correspondence, information, or other material pursuant to any powers conferred under this Act, shall not convey to or share the same with any other person.
(d) Illegal Activities / Penalties
To protect internet users, consumers and owners of computer systems / servers and copyright owners, the new law defines what constitutes illegal activities and provides penalties thereof. Thus:
SEC. 33. Penalties. – The following Acts shall be penalized by fine and/or imprisonment, as follows:
- 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 documents 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;
- Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration, substitution, modification, storage, uploading, downloading, communication, making available to the public, or broadcasting of protected material, electronic signature or copyrighted works including legally protected sound recording 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;
- Violation 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;
- 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.
The web may not be an overnight substitute for our shopping malls, which still shall remain in the near term as the favorite air conditioned recreation park of Filipinos young and old alike. "Malling" is, and shall for a long time, still be a favorite "bonding" activity. Yet, as traditional companies shift to Internet related activities in their strategy and business plans, on-line malling for Filipino consumers may become more accepted, sooner than expected.
It is hoped that by then, our laws would be sufficient enough and adopt fast enough to protect consumers who shop on the web.
- Lawyers in the Networld, M. Ethan Katsh (http://www.ascusc.org/jcmc/vol2/issue/katsh.html)
- Internet / E-Commerce, Henry M. Blodget, 22 June 1999.
- Merril Lynch (In-depth Report) "Internet in the Philippines-caught in the web" 23 March 2000, at p. 4.
- Ibid, at p. 6
- e-primer (An Introduction to E-Commerce) January 2000, E.C. Lallana, R.S. Quimbao and Z.B. Andam)
- "Electronic Commerce and Consumers", Heathes Rome, International Business Lawyer, April 1998 at pp. 169-175.