Thursday, August 18, 2011

Individuals, Bloggers, Businesses need a DTI Sales Promotion Permit even if there is no purchase required

Last July 28, the DigitalFilipino Club and IMMAP discussion / briefing on online promotion with the Department of Trade and Industry gave a better understanding on the intent of the DTI Sales Promotion permit process that makes it a requirement even if there is no purchase required. The bottom-line is to protect the consumer joining these online promotions. Lessons learned from the said briefing: DTI DAO 10-02 series of 2010: Addenda to DAO 2 series of 1993 or the Rules and Regulations Implementing Rep... 1. Are bloggers, individuals, businesses required to get a DTI Sales Promotion permit even if there is no purchase required?


The answer is YES, individuals, bloggers, and businesses do need a DTI Sales Promotion Permit whenever they run an online or offline sales promotion even if there is no purchase required as you are targeting consumers to participate. This is in compliance with the Consumer Act of the Philippines whose application to E-Commerce transactions is explained. (Note that the running of an online promotion, the activities that take place in it, whether commercial in nature or not, is an e-commerce transaction. The E-Commerce Law recognizes e-commerce as activities that can be commercial or non-commercial in nature.) Here are some of the provision under the Consumer Act of the Philippines:
"Consumer" means a natural person who is a purchaser, lessee, recipient or prospective purchaser, lessor or recipient of consumer products, services or credit. 
"Sales Promotion" means techniques intended for broad consumer participation which contain promises of gain such as prizes, in cash or in kind, as reward for the purchase of a product, security, service or winning in contest, game, tournament and other similar competitions which involve determination of winner/s and which utilize mass media or other widespread media of information. It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product. 
Art. 116. Permit to Conduct Promotion. - No person shall conduct any sales campaigns, including beauty contest, national in character, sponsored and promoted by manufacturing enterprises without first securing a permit from the concerned department at least thirty (30) calendar days prior to the commencement thereof. Unless an objection or denial is received within fifteen (15) days from filing of the application, the same shall be deemed approved and the promotion campaign or activity may be conducted: Provided, That any sales promotion campaign using medical prescriptions or any part thereof or attachment thereto for raffles or a promise of reward shall not be allowed, nor a permit be issued thereof. 
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(Update - August 4, 2011) However, until November 4, 2011 the following limit applies for bloggers running online promotion (as agreed last August 4, 2011 during the DTI discussion with bloggers). 
  • For personal bloggers with self-purchased incentives or tokens for online promotions (discount, raffle, contest, games, premium, redemption), for as long as the annual value given out is less than 1 million pesos, no DTI Permit necessary.
  • For sponsored incentives or tokens for online promotions, for as as long as the annual value received and then in turn given out by the blogger is no more than two hundred thousand pesos (P200,000), no DTI Permit necessary.
  • Individuals and Bloggers are expected to be clear in their online promotion mechanics and clearly stated on their website or blog.
Exclusions: CURRENTLY DOUBLE-CHECKING THIS
  • If the blogger got specifically chosen by a brand or agency to carry out an online promotion and received payment for doing such, DTI Permit is necessary and the blogger shall be the one to apply.
  • If the blogger collects payment from participants as part of its sales promotion, DTI permit is necessary.
  • It doesn't cover worldwide contest.
  • The limits DTI stated is only good for the DTI Sales Promotion Permit. Requirements of other government agencies are not included herein.
Update (November 5, 2011)


As no regulations were successfully issued, current regulation still holds. All promotions, with or without purchase required, needs a DTI Sales Promotion Permit.


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2. Bloggers and individuals who wants to carry out an online promotion, under their personal name, needs to present a Mayor's Permit and all documents necessary when applying for a DTI Sales Promotion Permit as stated in the corresponding application form: DTI References:
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(Update - August 4, 2011) CURRENTLY DOUBLE-CHECKING THIS


However, until November 4, 2011, the Mayor's Permit requirement shall not be enforced to bloggers as a result of the DTI consultation session last August 4, 2011. Individuals can register as themselves should their personal and sponsored online promotions exceed the indicated limits.


Update (November 5, 2011)


As no regulations were successfully issued, current regulation still holds. All promotions, with or without purchase required, needs a DTI Sales Promotion Permit.



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 3. For businesses, it is tricky if one decides "not to register" a no-purchase-required promotion.
DTI or any government agency that covers your promotion, under the Consumer Act of the Philippines, can run after you if a consumer files a complaint about it citing that "you are running a promotion without the required DTI Sales Promotion Permit".

4. What is IMMAP's position on the DTI issue? 
The organization is proactive in finding a solution that will work to all parties concern. The association also recognizes the need to update existing laws. Finding a workaround in between is being explored that will recognize new forms of promotion while maintaing adherence with the Consumer Act of the Philippines.

5. I am a blogger based outside of Metro Manila. How do I learn more about the DTI Sales Promotion Permit Process?

I suggest checking first if there is a bloggers association in your community. E-mail and call your local DTI office to request for a meeting - to be given clear information on the DTI Sales Promotion Permit process.

6. How does a DTI Sales Promotion Permit protect not only the consumers and contest joiners, but the business or individual organizing a promotion as well?

 The Consumer Act, as implemented by the DTI and other government agencies, primarily protects the consumer. However, in the course of running the promotion, if you have an abusive joiner that will game the system and got caught, DTI can also make them liable. This I believe provides a sense of security rather than making this decision, as a promotion organizer, on your own.

7. What potential problems might occur from holding contests, promos and giveaways without a DTI permit? What are the benefits for securing a permit?

In addition to what I mention in #6, if you have sponsors or partners who signed a commitment supporting your promotion (and this is included when you submit your permit application), it binds them with you in ensuring that the promises are delivered as stated in your promotion. If they don't deliver or back-out, it makes them equally liable. (under the DTI Permit process) Without a DTI permit, if your sponsors / partners backs-out on you halfway in your promotion, that accountability rest on you who made that promotion especially if those who joined files a complaint with the DTI.

8. The Consumer Act of the Philippines is already old. How can it be used to cover online promotions?

The E-Commerce Law of the Philippines (Section 33c), from my understanding, empowered all existing laws to recognize its electronic counterpart. They also released a Department Administrative Order 10-02 Series of 2010 to cover no-purchase-required type of promotions.

9. A lot of personal attacks was said about you because of this. What can you say about it?

No harm done on issues-based discussion as that is certainly necessary. For the non-issues-based, I updated my blog post on the "politics of blogging" and added #11.

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(Update - August 4, 2011) Moving forward:


1. The DTI will be forming a Technical Working Group (TWG) headed by the Bureau of Trade Regulations and Consumer Protection to formulate DTI Sales Promotion Permit Guidelines that will define the process for online promotions. The guideline is aimed to be release on or before November 4, 2011. Got designated during the August 4, 2011 DTI consultation meeting to submit names of people who can be part of the Technical Working Group. 


Based on the discussion last August 4, the following groups were identified as initial TWG members:
I suggested the following groups to be invited, to send a representative, as part of the TWG.
The idea for the above is to represent the perspective of relevant stakeholders who are one way or another involved in online promotions, with or without purchase required, either as an organizer, service provider, or as a consumer. 


Note that TWG members provide inputs and insight in the drafting of policies representing the interest of their association or group and industry sector. It must be clear to all parties that the TWG-Chairman (DTI-BTRCP) shall have the final say on what it will adapt that will be fair to all parties concern while protecting the interest of the consumer as its highest priority as mandated in the Consumer Act of the Philippines. All parties in this process shall respect such.




Apart from the TWG, the DTI-BTRCP will hold 2 to 3 public hearings as well where the draft version will be open for comments. Associations participating, especially their designated representative, should allot time in reviewing the following existing policies:
Update - August 17, 2011
DTI Sales Promotion Guidelines: a proposed position on issues
View more presentations from Janette Toral


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Update (November 5, 2011)


As no regulations were successfully issued, currentl regulation still holds. All promotions, with or without purchase required, needs a DTI Sales Promotion Permit.


Monday, August 8, 2011

Contest round-up as of August 8, 2011


Here are some of the ongoing contest I spotted to date. If you have one, buzz me and will add it.

  1. Pakyaw Black Bag (weekly - every Tuesday to Friday)
  2. Dear Dad, I Want a Smart TV (deadline: August 15)
  3. "I Can Change for the Good" Photo Contest (deadline: August 15)
  4. "Shake the Grass" Video Contest (deadline: August 15)
  5. Follow Chicken Charlie on Facebook and Twitter to win Chicken Charlie Wings (deadline: August 18)
  6. I Like Panciteria Lido video contest (deadline: August 26)
  7. Love As I See It photo story contest by IslandRose.net (deadline: August 30)
  8. Magnolia Chocolait Name the Twins (deadline: August 30)
  9. Join the Top 10 Emerging Influential Blogs for 2011 Writing Project (deadline: September 7)
  10. Most Liked Household / Barkada Group Picture Photo Contest (deadline: September 30)
  11. Get Hired, Get Wired by SysGen (deadline: October 26)

Tuesday, August 2, 2011

August 4: DTI Briefing on Consumer Act, Sales Promo to Bloggers

The Department of Trade and Industry is organizing a briefing with the blogging community on:
  1. The Consumer Act
  2. Promo Permit process
This will be on August 4, 2011, Wednesday, 10:30 am, at BOI Penthouse, Board of Investments Building, 385 Sen. Gil Puyat Avenue (corner Paseo De Roxas), Makati City.

This is open to all interested bloggers. You can walk-in at the said briefing. However, it will help also if you can call 9765705 or 8971243 to register.


To fellow bloggers, kindly share the info.


This announcement also at the DTI Website. 

DTI DAO 10-02 series of 2010: Addenda to DAO 2 series of 1993 or the Rules and Regulations Implementing Rep...



Consumers, do you want online contest, raffle, games to have a DTI Sales Promotion Permit?

When I posted about the DTI Policy on Sales Promotion Permits, one suggestion received was to get the point of view of the consumer as well on these promotions happening in various forms online. And I'm glad to finally receive one:
Anonymous said... (August 2, 2011 7:57 am snippet of comment) 
Let's try putting ourselves on the other side. What happens if you join an online contest and you win. The promised prize was an all expensed paid trip to Boracay with a stay in a posh villa or something. When you got your prize and went to Boracay you find out that you will have to pay for your land travel, ferry ride and worst, the posh villa turned out to be a bedbug infested inn. What will you do? Where will you complain?  
Perhaps this is the right time for me to ask consumers on what they think:

Do you want online promotion (raffle, contest, games, discounts, redemption, premium), with or without purchase required, to have a DTI Sales Promotion (or other applicable government agency) Permit? If yes or no, why?

DTI DAO 10-02 series of 2010: Addenda to DAO 2 series of 1993 or the Rules and Regulations Implementing Rep...



Monday, August 1, 2011

August 4: DTI Briefing on the Consumer Act, Promo Permit, with Bloggers

The Department of Trade and Industry is organizing a briefing with the blogging community on:
  1. The Consumer Act
  2. Promo Permit process
This will be on August 4, 2011, Wednesday, 10:30 am, at BOI Penthouse, Board of Investments Building, 385 Sen. Gil Puyat Avenue (corner Paseo De Roxas), Makati City.

(DTI just change the schedule and got a heads-up now.)

This is open to all interested bloggers. You can walk-in at the said briefing. However, it will help also if you can call 9765705 or 8971243 to register.


To fellow bloggers, kindly share the info.


This announcement also at the DTI Website. 

DTI DAO 10-02 series of 2010: Addenda to DAO 2 series of 1993 or the Rules and Regulations Implementing Rep...



August 4: DTI Briefing on the Consumer Act, Promo Permit, with Bloggers

The Department of Trade and Industry is organizing a briefing with the blogging community on:
  1. The Consumer Act
  2. Promo Permit process
This will be on August 4, 2011, Wednesday, 10:30 am, at BOI Penthouse, Board of Investments Building, 385 Sen. Gil Puyat Avenue (corner Paseo De Roxas), Makati City.

(This was originally scheduled on August 5. Just got a heads-up that it is now moved to August 4.)

This is open to all interested bloggers. You can walk-in at the said briefing. However, it will help also if you can call 9765705 or 8971243 to register.

Fellow bloggers, kindly help spread the word.

This announcement also at the DTI Website. 

DTI DAO 10-02 series of 2010: Addenda to DAO 2 series of 1993 or the Rules and Regulations Implementing Rep...