Case Analysis About E Commerce Law

I. Introduction: In this age of mobile phone shopping, online bookings, web based promotions and social networking, legitimate business transactions and permit applications can now be served via the internet. As early as June, 2000, the Philippine government through the Senate and the House of Representatives approved the E-Commerce Law in recognition of the vital role of information and communications technology (ICT) in nation-building. Known as the "Electronic Commerce Act of 2000" or House Bill No. 9971, the act was passed because of the need to create an information-friendly environment which supports and ensures the availability, diversity and affordability of ICT products and services that provides for the recognition and use of electronic transaction and documents in the country. The bill likewise recognizes the responsibility of the private sector in contributing investments and services in telecommunications and information technology as well as the need to develop appropriate training programs and institutional policy changes. The House Bill also took cognizance of the human resources involved in the use of ICT, the population capable of operating and utilizing electronic appliances and computers and its obligation to facilitate the transfer and promotion of adaptation of these technologies. But, in order to ensure network security, connectivity and neutrality of technology for the national benefit, information infrastructures comprised of telecommunication networks and information services shall be organized and deployed. E-commerce is a system that includes not only those transactions that center on buying and selling of goods and services to directly generate revenue, but also those transactions that support revenue generation, such as generating demand for those goods and services, offering sales support and customer service, or facilitating communications between business partners.

The Philippine E-Commerce Law: A Preliminary Analysis

1 By Dr. Emmanuel C. Lallana and Atty. Rodolfo Noel S. Quimbo When President Estrada signed the e-commerce law, the Philippines became only the third country in Southeast Asia with legislation to promote and protect electronic transactions. This culminates a very long and tedious process that was started way back July 1 st 1998, when Senator Juan M. Flavier filed the first of many bills that would eventually lead to the Philippine Electronic Commerce Act (R.A. 8792, an act providing for the recognition and use of electronic commercial and non- commercial transactions, penalties for the unlawful use thereof, and for other purposes). The E-Commerce law addresses the significant legal challenges facing Filipinos who wish to participate in this wealth-creating global phenomenon. First, it gives validity and legal recognition to electronic documents, electronic signatures and electronic transactions. Second, it facilitates the admission of electronic documents and electronic signature as evidence in cases of disputes. Third, it outlaws and penalizes unauthorized access to information and interference in communications systems (i.e., hacking, introduction of viruses and the like). Finally, it calls upon government to formulate and institute programs that are not only supportive of e-commerce but would actually get the government online. Many questions will be raised especially in the first months of the laws implementation. This is an initial attempt to provide some answers to questions regarding to how the law was intended to mean. This will discuss many, not all, provisions of the law that we feel is the most important for the private as well as public sectors. TOWARDS THE INFORMATION ECONOMY

In this law, the Philippine government explicitly recognizes the vital role of information and communications technology (ICT) in nation-building. The need to create an information-friendly environment that would ensure the availability, diversity and affordability of ICT products and services is also recognized as an important component of government policy. It also recognizes the need for policies and programs to develop human resources for the information age. The law also recognizes the need to marshal, organize and deploy a national information infrastructure. In achieving these goals, the primary responsibility of the private sector in contributing investments and services in ICT is acknowledged. This e-commerce law is intended to facilitate the use of electronic contracts and agreements, domestically and internationally. It recognizes the authenticity and reliability of electronic data messages, as well as to promote the universal use of electronic transactions (section 3). While it has been believed by many that the law is intended to apply only to commercial transactions between and among private persons, the law is intended to cover government as well in its dealings with the public. In terms of coverage, this law is to apply to any kind of electronic data message or electronic document used in commercial and noncommercial activities (Section 4). It is important to underscore that non-commercial electronic documents such as wills and affidavits could fall under the purview of this law. LEGAL RECOGNITION OF ELECTRONIC DOCUMENTS With this law, electronic documents are provided the same legal protection as paper-based documents. For instance, Philippine courts will be duty- bound to accept electronic documents as evidence. This is not to say that courts can accept any type of electronically- generated document for the very same bills have set

certain standards for its acceptability. Under this law, information shall not be denied validity or enforceability solely on the ground that it is in the form of an electronic data message or that it is merely incorporated by reference in that electronic

1 This project is managed by Jaime Faustino, Investment Policy Advisor for AGILE, a joint Philippine government-USAID project. The report was written Dr. Emmanuel C. Lallana, E-commerce Policy Team Leader and Atty. Rodolfo Noel S. Quimbo, Chief of Staff of Senator Juan M. Flavier. Dr. Lallana and Atty. Quimbo are co-authors of Business@ Philippines.com: Electronic Commerce Policy Issues in the Philippines (w/ L. Salazar) and e-Primer: An Introduction to Electronic Commerce (w/ Z. Andam). The Philippine E-Commerce Law: A Preliminary Analysis Page 2 of 7 message (section 6). This provision refers to two things: the electronic data itself, and/or another that has been merely incorporated by reference to it. There are many messages whereby the original refers to another data message. For example: A sends an e-mail to B offering to sell his car the picture and specifications of which are contained in say, a web page. That web page that has been referred to is in a sense, incorporated into the email message and becomes part of the whole communication even if it was merely referred to. The law says that both cannot be denied legal effect: the email and the web page that has been referred to. This creates convenience also because the primary messages do not have to be too bulky as they are allowed to incorporate by reference something else. Section 7 assuages whatever doubts Section 6 might still create by explicitly saying that electronic

documents shall have the legal effect, validity, or enforceability as any other document or legal writing. Further it states that 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. This applies whether the requirement in the law is in the form of an obligation or whether the law simply provides consequences for the document not being presented or retained in its original form. For evidentiary purposes, the electronic document is now deemed to be the functional equivalent of a written document under existing laws. The limits has been set, however, when the provision states that this Act is not intended to modify any statutory rule relating to the admissibility of electronic data messages, except the rules relating to authentication and best evidence. The phrase functional equivalent recognizes that electronic documents can never be the same as paper-based ones, they simply are different. But electronic documents can achieve the purposes or functions of paper-based documents: as a record, as a preservative mechanism of facts, as proof of existence of a particular fact or agreement, etc. Legal recognition of Electronic Signatures is provided for in Section 8. Electronic signature on the electronic document is now recognized as equivalent to the signature of a person on a written document. However, certain conditions are given for electronic signature is to be recognized--that a prescribed procedure was followed under which such procedure identifies the party sought to be bound and that he had access necessary to obtain his consent and approval through the electronic signature. The legal recognition of electronic signature will allow digital or electronic contracts subject to the Statute of Frauds. The Statute makes unenforceable certain contracts- e.g., contracts that have for their object goods exceeding P500 in value- unless they are written and subscribed. In this situation the

requirement for a memorandum is now met by the legal validity of the electronic document, and the subscription part is now answered by the declared equivalence between manual and digital signatures. INTEGRITY OF ELECTRONIC DOCUMENTS The integrity of electronic documents (in Section 9) provides for prima facie presumptions relating to electronic signatures: that the electronic signature is that of the person to whom it correlates, and that the signature was affixed with the intention of signing or approving the electronic document. This means that when As signature is attached to a document, one may presume that it is As signature and that he was the one who signed it with the intention of signing or approving the same. The presumption is, of course merely prima facie, it may be rebutted with better evidence to the contrary. What constitutes Original Documents is also discussed in the law. This is important as it impacts on rules of evidence or court procedures where the concept of original is most vital to whether ones piece of evidence is admitted or not. Presently, where the law requires information to be presented or retained in its original form, that requirement would be deemed met by an electronic data message or document if the integrity of the information is shown by evidence aliunde or otherwise and that it is capable of being displayed to the person to whom it is to be presented. This provision of law will be of great help to those who go to court presenting electronic evidence. While the old paradigms could only conceive of original document as just being generally singular, this paves the way for the existence of many originals as long as the provisions criteria of integrity and reliability are met. The authentication of electronic data messages and electronic documents, covered in section 11, amends

the rules on evidence. Given the different nature of electronic data messages vis-a-vis paper or other objects, authentication procedures necessarily will have to be different too. This law calls for electronic data messages to be authenticated by demonstrating, substantiating, and validating a claimed identity of a user, device, or another entity in an information system. Electronic signatures are to be authenticated by proof that The Philippine E-Commerce Law: A Preliminary Analysis Page 3 of 7 a symbol or character representing the person named therein or attached thereto or that an appropriate technology or security was used with the intention of authenticating or approving the electronic document. The electronic data message shall be authenticated by proof that an appropriate security procedure, when applicable, was used for the purpose of verifying the originator, or detecting errors. The law also provide a guide as to when a data message is to be admitted in evidence and to how much weight is to be given them (Section 12). The provision states that no rule shall render the data message inadmissible on the sole ground that it is in electronic form or on the ground that it is not in the standard written form. Evidential weight is to be given such electronic document after assessing the reliability of the manner in which the originator was identified, and other relevant factors have been given due regard. The provision is designed to function in the interim, i.e., pending the promulgation by the Supreme Court of its own rules. FROM FILE CABINETS TO ELECTRONIC FILES Nothing represents the modern office more than filing cabinets. Offices have rooms full of filing cabinets largely because there are no other ways of keeping files that are required by government or by law. This Act may yet make filing cabinets obsolete.

Under this law, the retention of documents in its original form is satisfied by retaining them in the form of an electronic data message or electronic document as long as the criteria of accessibility, integrity, and identification of person and time is assured. (Section 13, Retention of Electronic Data Messages). The person required to retain the forms may also do it by using the services of a third party. This may be applied where the government, say the BIR, requires the retention of receipts for at least three years, for audit purposes. This can free corporations from having to keep the required documents in paper form. Affidavits are dealt with under Sections 14 and 15. The requirements in Section 9 on integrity, and Section 12 on admissibility may be established by affidavit. This is useful as the requirements may prove to be too stringent and inflexible. Of course, as in any statement contained in affidavits and presented in courts, such are subject to the right of the person against whom the affidavit is executed, to test the accuracy and truth of the affidavit by cross-examination. ELECTRONIC CONTRACTS The Formation and Validity of Electronic Contracts is considered in section 16 of the law. Despite the provisions of the Civil Code which says, that a contract is a meeting of the minds and generally could take whatever shape or form, many still feared that contracts entered into electronically may encounter some problems. Here the law states unambiguously that, an offer, the acceptance of an offer and such other elements required under existing laws for the formation of contracts may be expressed in, demonstrated and proved by means of electronic documents. The law further stipulates that no contract shall be denied validity or enforceability on the sole ground that it is in the form of an electronic document. The question From whom does the message come from? is answered in sections 18. A message is

that of the originator if the originator him/herself (or his/her authorized representative) sent it and it was sent by an information system programmed by or on behalf of the originator to operate automatically. The last phrase recognizes the situation whereby one programs a computer to look for bargains or, on the other hand, by another to look for buyers. When these two systems meet, even without the direct intervention of the parties at that particular exact time, the messages sent will be deemed as having come from both the originators. The issue of when and where meetings of minds or contract have been reached is revisited in Section 20 (on the agreement on acknowledgment of receipt of electronic data messages), Section 21 (on the time of dispatch of electronic data messages), Section 22 (on time of receipt of electronic data messages), and Section 23 (on place of dispatch and receipt of electronic data messages). The autonomy of parties-to-a-transaction in the choice of type or level of security for their own purposes is explicitly recognized in section 24. However, this is subject to rules and guidelines which government may promulgate regarding e- commerce transaction security. The law is designed also to apply to actions on contracts related to carriage of goods. What is envisioned is that airway bills, bills of lading, receipts, sales, transfers of ownership, and other documents or papers related to carriage of goods by land, sea, or air may now be done electronically. Given the scores of The Philippine E-Commerce Law: A Preliminary Analysis Page 4 of 7 copies of documents required and necessary for imports and exports, and even domestic trade, this will be of great help in reducing inefficiency and making transactions move faster. In fact in subsections (f) and (g)

that where one or more electronic data messages or electronic documents are used to effect any action, no paper document used to effect any such action is valid unless the use of electronic data messages or electronic documents has been terminated and replaced by the use of paper documents. This is meant to encourage further the use of electronic data messages in trade transactions. TOWARDS E-GOVERNMENT The law will move us closer to e-government, or, at least, to the electronic delivery of government services. It mandates that government as well as government- owned and controlled corporations use electronic transactions in all its processes (Section 27). The law also mandates government to undertake these initiatives within two years. In order to facilitate the abovementioned goal, Section 28 of the law call for the installation of a government-wide electronic online network, that would facilitate the open, speedy, and efficient online transmission amongst all government agencies, down to the regional and provincial offices. Section 29 empowers the DTI to promote and develop electronic commerce as well as to promulgate rules and regulations, provide quality standards or issue certifications in the pursuance of this Acts intentions. By 2003 we should expect government agencies to do most of their licensing functions, acceptance of payments, or the issuance of receipts on line. To make this a reality, the executive agencies should immediately develop a strategic plan to deal with the public online. An important effect of this provision of law is it will create a huge market for private sector activities in this area. This law clearly shows that aside from creating a favorable environment for electronic commerce, government is interested in stimulating its growth by being a leading-edge user itself. DEVELOPING TRUST

An important goal of any e-commerce legislation is to ensure that electronic transactions are safe and that data collective electronically are kept private and confidential. Privacy issues are addressed in sections 31 and 32 of the law. Section 31 says that access to an electronic file, signature or document shall be limited only to those that are authorized to possess and use it. Electronic keys used for identity and integrity may only be made available to another upon consent of the individual in lawful possession of the key. Section 32 obliges those who obtain access to an electronic key, signature or document not to convey or share the same with another. These two sections are important in that it recognizes that these files are property of an individual and can be possessed only by another upon the consent of its owner. It further recognizes the privacy and personal nature of the key by obliging those who gets to possess it not to share it with others. We submit that a violation of these two sections may be punishable by the catch- all provision in Section 33 paragraph (d). Security issues are addressed in section 33. While this section deals with penalties, its net effect is to help create a more secure environment for electronic transactions. This law specifically punishes hacking or cracking which has been defined as either unauthorized access or interference in a computer system or any other type of access- authorized or not- with the intention to destroy, corrupt, alter, or steal data. Included in this definition is the introduction of viruses. Penalty is rather steep by contemporary Philippines standards: a minimum fine of P100,000 and mandatory imprisonment of from six months to three years. Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, as well as broadcast of protected works is also punishable by penalties ranging from a minimum fine of P100,000 and

mandatory imprisonment of from six months to three years. The extent of liability of service providers is tackled in Section 30. Under this law no person or party shall be held liable for any data message to which the party - acting as a service provider- merely provides access, subject to certain requirements. Service providers who have no knowledge that the materials passing through them are unlawful and those who do not financially benefit directly from such unlawful activity, or do not commit an unlawful act need not be penalized. This refers to materials that pass through a provider that may either be libelous, seditious, or is a pirated material, etc. The service provider is not tasked with monitoring every material that passes through his facilities as that may either be impossible or an undue invasion of the privacy interests of others. The Philippine E-Commerce Law: A Preliminary Analysis Page 5 of 7 A GLOBAL LEGAL FRAMEWORK? The Philippine e-commerce act is based on UNCITRAL (United Nations Commission on International Trade Law) Model Law on Electronic Commerce. The UNCITRAL is that UN organ tasked to draft model laws, which its member nations may adopt in order to have harmonized legal regimes insofar as business and trade are concerned. Under Section 37 it is stipulated that in the interpretation of this law regard must be had to its international origin. Section 39 states that if the other party to a transaction comes from a country that does not grant the Filipino similar rights contained herein, he will not be allowed also to enjoy the benefits of this law's provisions. In recognizing the international character of electronic commerce, this law is not merely bowing to reality. It is committing the country to a mode of action that would move us closer to a universal set of rules

for e-commerce. This is important, as the real benefit of electronic commerce is experienced not when we are able to electronically transact among ourselves. The real benefits of e-commerce will be felt when Filipinos outside the country are able to buy goods from Filipinos in the Philippines and when Filipinos in the Philippines are able to sell their goods internationally as easily as they would sell them to fellow Filipinos. Source: www.tamis.dai.com 02/05/2002 http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan002704.pdf

DEVELOPMENT RESEARCH NEWS- http://dirp4.pids.gov.ph/ris/drn/pidsdrn06-6.pdf

Legal Ramifications of Philippine E-Commerce

By Franklin I. Cueto* http://ublawjournal.tripod.com/issue/jan-mar2000/legal_ramifications.html With the advent of the internet, a person is now capable of accomplishing certain tasks through electronic means. One time, my professor in taxation assigned 15 cases for recitation and since I didn't had a time to read them in the original, I asked a friend to e-mail me a copy of his case digests. In a matter of seconds, I was able to receive the needed file. Apart from electronic mails, web tech has also introduced a different concept of commerce that transgressed the traditional image of buy and sell. Highly technical in some aspects and relatively complex in operation, this field introduced various issues on the subject of law. Electronic commerce or E-commerce is yet to be legally recognized in its fullest sense. Armed with the goal of joining the communication process in promoting public awareness regarding the subject, it is therefore my objective in writing this article to provide a "bird's eyeview" on the topic. I may not be a cyberspace law expert, but with the present stand of our legislators in addressing the internet, who is? None of the existing laws anticipated the advent of electronic commerce. As what the Philippine Internet Commerce Society has put it, "Philippine laws deals exclusively with paper-based transactions and regards paper documents as the highest form of evidence to prove their existence. In some cases, such as the Statute of Frauds, validity depends upon the existence of a writing. The Rules of Evidence admit only original documents which must further be authenticated by, among others, the identification of a signature."1 Obviously, our present laws do not apply to on-line or virtual transactions. As a consequence, the validity and enforceability of e-commerce transactions are faced with legal uncertainty. Speaking at a Seminar-workshop on E-Commerce Policy held last March 1, 2000, Supreme Court Administrator Alfredo Benipayo stressed the need for "a legal framework that will support the far-reaching changes that will be occasioned by going on-line. E-commerce, to survive and thrive, requires that the virtual marketplace be recognized as a real and functioning arena where the participants deal in actual rights, concrete obligations, and contracts no less binding than those in the real world. For that to happen, electronic documents must necessarily be recognized as having the same validity and enforceability of their paper counterparts."

What is E-commerce E-commerce can be defined as doing business on the internet in all its various shapes and forms. This definition is refined to mean transactions that are completed over the internet, that is, selection, purchase and payment.2 With the internet, a person can now communicate with another person irrespective of their location, at such pace and expedience nothing compared to the telephones, fax machines and the like. Communication carries with it the opportunity to transact business, buy and sell goods or services, or even pull together a virtual organization that will perform the entire process of trading or merchandising. This technological advancement has come to be known as electronic commerce or e-commerce. Laws Relevant to Electronic Commerce 1. Contracts. The provisions of the New Civil Code on the law on obligations and contracts will generally govern the validity of online contracts. Under Art. 1305 of the NCC, a contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. As long as the essential requisites concur, that is, there is consent, object certain and cause, then there is a valid contract. In online contracts, however, issues as to forms and legal capacity of minors are often discussed since the present rules governing them in paper contracts may not be applicable in the case of online contracts. Under the NCC, to prevent fraud and not to encourage the same, certain agreements are required to be in writing so that they may be enforced. Its chief characteristic is the provision that no suit or action shall be maintained on certain classes of contracts or engagements unless there is a note or memorandum thereof in writing signed by the party to be charged or by his authorized agent. Obviously, this law has no application to online contracts. The legislators could have not possibly thought of digital signatures when they had the statute of frauds in their agenda. As to the incapacity of minors to enter into contracts, a computer has no mind of its own to determine whether both or either of the contracting parties have the capacity to contract. With the increasing concern against internet pornography, however, certain mechanisms are now designed to prevent minors from accessing adult sites and/or online shops such as requiring the input of a credit card account number (although it is possible for a minor to use his father's credit card without the latter's knowledge). Filtering softwares are also available to prevent unauthorized access to sites with potentially offensive materials, such as NetNanny, Cyber-Patrol and SurfWatch. These utilities requires age authentication through certain means not accessible to minors. 2. Enforceability of "Web Wrap" licenses. A "web wrap" agreement is when an online shopper is supplied with a copy of a license agreement flashed on his or her computer screen and is instructed that by clicking on an "Accept" button, he or she is deemed to have read and agreed with the terms of the license. In some cases, the internet user is asked to choose between "enter" or "do not enter". When the button "enter" was chosen, it is deemed an acceptance of the terms of the agreement. Though the Supreme Court has not ruled on the enforceability of "web wrap" agreements, it is argued that all the requisites to a valid contract are present in such agreements.3 It may even be pointed out that such licenses falls under the category of contracts of adhesion, or the take it or leave it contracts. In the case of Angeles vs. Calasanz, the SC held that the terms of a contract of sale which has the characteristics of a contract of adhesion must be construed and interpreted against the party who drafted it, especially if the interpretation will help effect justice to buyers who, after having invested a big amount of money, are sought to be deprived of the same through the application of a contract, clever in its phraseology, condemnable in its lopsidedness and injurious in its effect which, in essence, and in its entirety is most unfair to the buyers.4 3. Reproduction of published works. Most of the people seek access to the internet to obtain information which they either download to their personal computers or print a copy of the same for whatever purpose they may use them. The present statute in the Philippines on intellectual

property rights is R.A. 8293 otherwise known as the "Intellectual Property Code of the Philippines" which was approved on June 6, 1997 and took effect on January 1, 1998. Under the law on copyright, "published works" are defined as works, which, with the consent of the authors, are made available to the public by wire or wireless means in such a way that members of the public may access these works from a place and time individually chosen by them. Written articles published in a website is an example of such work that is protected by the code. Works are protected by the sole fact of their creation, irrespective of their mode or form of expression, as well as of their content, quality and purpose.5 The general rule is that if you copy without permission, you will be liable for copyright infringement. It is noteworthy to explain that not all works are protected and that the mere act of copying is not by itself an act of infringement. First, no protection shall extend to any idea, procedure, system method or operation, concept, principle, discovery or mere data as such, even if they are expressed, explained, illustrated or embodied in a work; news of the day and other miscellaneous facts having the character of mere items of press information; or any official text of a legislative, administrative or legal nature, as well as any official translation thereof.6 Second, the fair use of copyrighted work for criticism, comment, news reporting, teaching including multiple copies for classroom use, scholarship, research and similar purposes is not an infringement of copyright.7 The code further provided that the private reproduction of a published work in a single copy, where the reproduction is made by a natural person exclusively for research and private study, shall be permitted, without the authorization of the owner of copyright in the work.8 The copyright in works shall be protected during the life of the author and for fifty years after his death. Any person infringing any right secured by the code shall be punished by imprisonment ranging from one year to nine years, plus a fine ranging from P 50,000.00 to P 1,500,000.00. If you really want to play safe, the best way to avoid being sued for infringement of intellectual property right in cyberspace is to simply ask permission to use the information you are downloading or copying. It's worth the effort! 4. Credit Card Transactions. I have a personal experience in purchasing a password from a British webpage where I used the password to gain access to their site for a period of one year. The price was quoted in US dollars and the service may be availed of through credit cards. I simply typed my credit card's account number and there it was, on my next credit card billing statement, I was charged the corresponding amount. I didn't even had to sign any receipt, the transaction was consummated as simple as 1-2-3. Disclosing your credit card's account number is extremely risky, and in buying goods online, one should choose a company that is reputable and prominent. Also, if you are a credit cardholder, you should be more watchful of your card's whereabouts. The law relevant to this issue is R.A. 8484 otherwise known as the "Access Devices Regulation Act of 1998". The state recognizes the recent advances in technology and the widespread use of access devices in commercial transactions. Access Device was defined as any card, plate, code, account number, electronic serial number, personal identification number, or other telecommunications service, equipment, or instrumental identifier, or other means of account access that can be used to obtain money, good, services, or any other thing of value or to initiate a transfer of funds (other than a transfer originated solely by paper instrument). Any person committing any of the acts constituting access device fraud shall be punished by a fine of P 10,000.00 or twice the value obtained by the offense, whichever is greater and imprisonment ranging from 6 years to 20 years. 5. Lawsuit against foreign corporations. In conducting commerce electronically, a Filipino may want to transact with a foreign corporation and in some unfortunate cases, the former end up filing a suit against the latter. Question: May the Filipino sue the Foreign Corporation? May the foreign corporation maintain any action, suit or proceeding in any court of the Philippines? Under the Corporation code, license is necessary for a foreign corporation to do business in the Philippines.9 The purpose of the law requiring the license is to subject the foreign corporation doing business in the Philippines to the Jurisdiction of its court. If the foreign corporation transacts business in the Philippines without a license, then it shall not be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative agency of the

Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid cause of action recognized under Philippine laws.10 In the case of Pacific Micronesian Line, Inc. vs. del Rosario, the SC held that one single or isolated transaction does not constitute "doing business", and that transactions which are occasional, incidental and casual, not of a character to indicate a purpose to engage in business do not constitute the doing or engaging in business contemplated by law. In order that a foreign corporation may be regarded as doing business within a State, there must be continuity of conduct and intention to establish a continuous business.11Essentially, each case must be decided in the light of its peculiar circumstances. Im pretty sure there are several other laws pertinent to electronic commerce. In the meantime, however, allow me to conclude this part of the topic and proceed to the nextareas in e commerce where there is no applicable law at all. Issues that may arise in Electronic Commerce 1. Admissibility of Electronic Documents in Court. Supposed I was offered to enter into a contract by a friend based in Cebu and she sent me the offer via an electronic mail. I decided to accept the offer so I e-mailed her back manifesting my acceptance. Question: In proving the consummation of a valid contract, is a copy of my e-mail admissible as evidence in court? Does the printed copy of my e-mail constitute an original document as defined under the Rules of Evidence? The legal recognition of electronic documents and the admissibility and evidentiary weight of data messages are among the legal uncertainty that impedes the growth of Philippine ecommerce. The absence of clear guidelines is one of the main reasons for e-commerce's relatively slow growth in the country, as companies, particularly foreign investors, remained wary of taking the plunge. Precisely, this is one of the highlights introduced by the proposed ecommerce bill, as it seeks to recognize electronic signatures the way normal signatures are recognized and the admissibility and evidentiary weight of digital data as evidence. 2. Taxation. At present, the Bureau of Internal Revenue has not issued any regulations regarding electronic commerce. Besides, with its poor level of performance in the collection of taxes imposed on the real world, I don't think it is smart to address the issue on online taxation at this stage. 3. Importation. The importation of softwares into the Philippines through the internet is a typical day-to-day transaction in this computer age.Unfortunately, it is not clear how the customs and tariff code will apply in this scenario. The law did not categorically include the importation of an article through electronic means as within the definition of "importation". Under sec. 1202 of the Tariff and Customs Code, By this time, perhaps you will agree with me that in the virtual world, "places" are not confined within borders. Here, the impact of an activity is global. On the contrary, the local g o v e r n m e n t cannot enforce its rules on the global population. It is difficult which rule or law applies. In practice, the transmission of software into the Philippines by electronic means is not being monitored. 4. Digital Signatures. 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 data message 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 document.12 There is no law that recognizes digital signatures. 5. Encryption Policy. There is no law that deals with encryption. 6. Domain Names. Domain names are chosen on a first-come-first-serve basis. Some companies provides free hosting for domain names while others will normally charge you on a yearly basis. There is no registry for Domain Names in the Philippines. Present Status of E-Com in the Philippines

Legal problems such as conflicts of law, the determination of jurisdiction, taxation, the treatment of digital intellectual property, the regulation of certification authorities, the criminalization of on-line offenses, the settlement of domain name disputes and the protection of online consumers are among the issues which our legislators should take into account in this growing age of computer world. Other issues such as privacy and personal data protection, trademarks, indecency/pornography, internal security/sedition, and data transfer restrictions should also be considered. According to Senator Ramon Magsaysay Jr., author of the proposed law on electronic commerce (Senate Bill No. 1902), there are presently 150,000 households in the country with internet access equivalent to 500,000 to 600,000 internet users who can benefit extensively from the proposed law. The Philippines is expected to be the fourth country in the Asian region next to Malaysia, Singapore and Korea to allow online business transactions with the expected passage of the electronic commerce law. As sponsored by Senator Magsaysay, "if the bill becomes a law, the electronic document will have the same effect as a written document, and shall be admissible in court. An electronic document that becomes part of the data of either party, whether it stays in the server or hard disk, as long as it is not tampered with, is considered original. This legislation is long overdue." Sooner or later, the Philippines will encounter problems brought about by e-commerce. This is but a natural consequence of the increasing online users in the country. If caught unprepared, like what happened to the "I Love You" virus, the country will be left without a law to resolve whatever dispute that will arise in the futurethe near future. Comments are welcome at bhound@i-next.net

* LLB. 2000, Article Editor, UB Law Journal 1 Position paper of the Philippine Internet Commerce Society 2 Latest trends:e-commerce, Randy Batholomew, Accountants' Journal 3 APEC legal guide to Philippine E-Commerce. 4 G.R. No. 42283, March 18, 1985 5 Sec. 172.2, Chapter II, Part IV, R.A. 8293 6 Sec. 175, Chapter IV, Part IV, R.A. 8293 7 Sec. 185, Chapter VIII, Part IV, R.A. 8293 8 Sec. 187.1. Chapter VIII, Part IV, R.A. 8293 9 Sec. 126, Corporation Code 10 Sec. 133, Corporation Code 11 96 Phil. 23 12 sec. 5, Chapter I, Part II, SB 1902