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.---------------------------------------------------------------------------
(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:
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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- Application Form for Sales Promo Permit for Contests
PDF format (31 kB)
- Application Form for Sales Promo Permit for Discount
- Application Form for Sales Promo Permit for Games
- Application Form for Sales Promo Permit for Premium
- Application Form for Sales Promo Permit for Raffle
- Application Form for Sales Promo Permit for Redemption
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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.
(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.
-------------------------------------------------------------
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.
-------------------------------------------------------
(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:
- Internet and Mobile Marketing Association of the Philippines (digital marketing)
- Juned Sonido (blogging)
- DigitalFilipino Club (e-commerce)
I suggested the following groups to be invited, to send a representative, as part of the TWG.
- Philippine Retailers Association (retailers)
- Philippine Association of National Advertisers (advertisers)
- 4As (ad agencies)
- Mobile Marketing Association Philippines Council (mobile marketing)
- SEO Organization Philippines (search engine marketing)
- Computer Professionals Union (computer users)
- Consumer Union of the Philippines (consumers)
- Association of Marketing Educators of the Philippines (education / academe)
- Philippine Marketing Association (marketers)
- National Bloggers Association (bloggers - currently under formation)
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:
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:
- DTI-DAO 10-04 series of 2010 No expiry date on gift card / certificates / checks sold beginning July 1, 2012
- DTI-DAO 10-02 Series of 2010 Addenda on Chapter IV Sales Promotion
- Joint DTI-DOH-DA DAO 1 series of 2008: Consumer Protection in E-Commerce Transactions
- DTI-DAO 8: Protection of Personal Data in an Information and Communication System
- DTI-DAO 06 series of 2007 on Administrative Fines
- DTI-DAO 5 series of 2007 - Rules on Mediation in the Resolution of Inquiries, Complaints and Cases Filed with the DTI in violation of the Consumer Act
- DTI DAO 7 series of 2006 - Instituting Simplified and Uniform Rules of Procedure for Administrative Cases filed with the DTI for Violations of the Consumer Act
- E-Commerce Law
- DTI-DAO 2 Series of 1993: IRR on Sales Promotion - Consumer Act of the Philippines
- Consumer Act of the Philippines
- a few more to be added..
Update - August 17, 2011
The DigitalFilipino Club had a webinar session discussing the DTI Sales Promotion issues and have presented this proposed position.
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.
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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.
