Final Report on Sales Promotions in Blogs BACKGROUND July 21, 2011 Request for Discussion/Briefing (Annex A) The Digital

al Filipino Club and the Internet Mobile Marketing Association of the Philippines (IMMAP), through Ms. Janette Toral, requested for a discussion/dialogue with DTI to seek clarification on online business issues, specifically on sales promotion in the online environment. July 28, 2011 Briefing/Discussion on Online Promotions with the Digital Filipino Club and IMMAP A dialogue was conducted last 28 July 2011 in the Old Swiss Inn, Makati City at 1:30 pm to discuss issues on online sales promotions. This was attended by representatives from the Digital Filipino Club, IMMAP, DTIBTRCP, DTI-NCR, DTI-OLA and DTI-ECO. August 1, 2011 Report on the 28 July 2011 Briefing/Discussion (Annex B) The dialogue served as a venue to clarify issues on online sales promotions and to learn about the changing face of e-commerce. Mr. Mike Palacios of IMMAP explained that brands are increasingly engaging in online promotions for paperless transaction and instant record-keeping and analytics. Furthermore, online transactions are more real-time and widespread. The concern of E-commerce practitioners with regards to sales promotion is eligibility. They would want to know whether they are required to secure a DTI sales promotion permit especially for promotions wherein no purchase is required. In the dialogue, DTI-NCR clarified that all promotions, regardless if a purchase is required or not, should have a DTI permit. August 1, 2011 Meeting of DTI-NCR, E-Commerce, OLA, BTRCP, CWBRG-Comm Group and Usec. Maglaya In lieu of the concerns raised by the Digital Filipino Club and IMMAP on online sales promotions, a meeting attended by representatives from key DTI Offices was held last 1 August 2011 to discuss whether bloggers are required to secure DTI sales promotions permit. The meeting was presided by Usec. Zenaida Cuison Maglaya.

 August 3, 2011 Highlights of the 1 August 2011 Meeting of DTI (Annex C) It was agreed in the meeting that online contests and sales promotions in group buying sites is subject to the rules being implemented by DTI on applying for sales promotion permit as per the Consumer Act, IRR, ECommerce Act, Joint DTI-DOH-DA Administrative Order No. 01, Series of 2008 and the Department Administrative Order No. 10-02, Series of 2010. Furthermore, bloggers/individuals who are openly earning profit and/or engaged in advertising are required to apply for a DTI permit before they conduct promotions in their blogs and/or social-networking (Facebook/Twitter) accounts. However, given the nature of blogging and social-networking, DTI realized the necessity to conduct more dialogues with bloggers. August 4, 2011 DTI Briefing/Dialogue with Bloggers (Annex D) Relative to the need for further dialogues with bloggers, DTI conducted a briefing with the blogging community to discuss whether giveaways by bloggers and/or individuals are covered by the Consumer Act and the sales promotion permit regulations/guidelines. Secretary Gregory L. Domingo, who presided the briefing, made a compromise of setting a de minimis rule on the application of a sales promo permit for online promotions that will be implemented for three (3) months or until 4 November 2011. A Technical Working Group, headed by Dir. Victorio Mario A. Dimagiba of BTRCP, will be formed and be in-charge of crafting the guidelines for promotions conducted in blogs. August 5, 2011 DTI-OLA Blogging/Bloggers (Annex E) Issues and Concerns Re:

Director Benjamin T. Subido of DTI-OLA stated in their memo dated 5 August 2011, that if a blog is purely personal then, it is not covered by the Consumer Act. However, if advertisers/product manufacturer/producers link with such personal blogger, the blog becomes commercial in nature. Therefore, the person whose consumer products, services, credit facilities, beauty contests, competition, game shows and the like are being promoted, files the application for sales promo permit. For corporate blogs, they are required to apply for DTI permit for any sales promotion that they conduct. While organizational blogs need only to apply for a DTI permit when their promotional activity extends to non-members.

 August 15, 2011 Minutes of the Meeting of DTI-BTRCP with Ms. Janette Toral of the Digital Filipino Club (Annex F) A meeting was held last 15 August 2011 between BTRCP and Ms. Janette Toral to further discuss matters on online sales promotion. Ms. Toral proposed that all DAOs affecting sales promotion be formulated into one Department Order. Furthermore, she insisted that guidelines on promotions conducted in blogs should refer to bloggers as individuals. Ms. Toral submitted a proposed list of TWG members. However, as head of the TWG, Dir. Victorio Mario A. Dimagib will have the final say on who will be part of the TWG. August 16, 2011 Minutes of the Meeting of BTRCP Re: Blogging (Annex G) The discussions that transpired in the 15 August 2011 meeting were reported to Dir. Victorio Mario A. Dimagiba and the final members of the TWG on blogging were decided. August 22, 2011 Guidelines on Online Promotion for Bloggers (Annex H) Official memoranda and letters of invitation were sent to the members chosen by Dir. Victorio Mario A. Dimagiba to be part of the TWG on blogging. August 31, 2011 Meeting of the TWG on Blogging (Annex I) The members of the TWG had their first meeting and convened at the BTRCP Conference Room last 31 August 2011 to discuss possible guidelines for promotions conducted in blogs. September 15, 2011 Briefing with IMMAP (Annex J) A memorandum was issued by Dir. Victorio Mario A. Dimagiba to Ms. Rosila F. Egmilan of DTI-NCR requesting to schedule a briefing with IMMAP regarding DAO No. 10-02, S 2010 and JAO No. 1, S 2008. September 16, 2011 Notice of Follow-Up TWG Meeting (Annex K) An email message was sent to the members of the TWG on blogging informing them of the follow-up meeting scheduled on 26 September 2011 in the BTRCP Conference Room and asking for comments and additional input on the minutes of the 31 August 2011 meeting.

 September 26, 2011 Follow-up Meeting of the TWG on Blogging (Annex L) The TWG on blogging has set its follow-up meeting on 26 September 2011 in the BTRCP Conference Room at 10:00 am but none of them confirmed their attendance nor did they submit comments and/or additional inputs on the minutes of the 31 August 2011 meeting. Having no quorum, the meeting was cancelled. ISSUE Do we need to apply sales promo permit to individual bloggers? RULES Department Administrative Order No. 10-02, Series of 2010 ( Addenda to Department Administrative Order No. 2, Series of 1993 or the Rules and Regulations implementing Republic Act No. 7394, otherwise known as the Consumer Act of the Philippines particularly Chapter VI thereof on sales promotion). De Minimis Rule setting an annual One Million pesos (PhP1,000,000.00) threshold for online promotions with self-purchased prizes and Two Hundred Thousand pesos (PhP 200,000.00) for online promotions with sponsored prizes. Should the individual bloggers exceed these amounts, they are required to secure DTI permit. The rule shall be implemented for three (3) months starting 04 August 2011 or until 04 November 2011. DISCUSSION As agreed upon in the DTI briefing with the blogging community last 04 August 2011, a Technical Working Group (TWG) was formed to discuss on the possible guidelines for sales promotions conducted by individual bloggers. The TWG were composed of the following:
1. DTI BTRCP Dir. Victorio Mario A. Dimagiba (Chairman) Mr. Gerald C. Calderon Mr. Homer A. Bunyi Ms. Joyce Ria B. Estares Mr. Hans Roxas Chua Mr. Juned Sonido Mr. Carlos Ople Mr. Tonio Cruz

2. IMMAP 3. Individual Bloggers

4. Digital Filipino Club 5. Philippine Retailers Association

Ms. Janette Toral

Atty. Paul Santos Mr. Jojit Alcazar Ms. Rosila F. Egmilan Atty. Marimel D. Porciuncula Dir. Lourdes Yaptinchay

6. Mobile Marketing Association Philippines Council 7. DTI NCR -

8. DTI OLA
9. DTI - E-Commerce

On 31 August 2011, the TWG had their first meeting at the BTRCP Conference Room. When asked by the Chairman (Dir. Dimagiba) what is the feedback of the blogging community on the de minimis rule, Mr. Juned Sonido replied that the blogging community was relieved upon the issuance of the rule and most of them agree for a dialogue. The blogging community stressed that they do not want any special privileges and they want to follow the law. Their only intention is to balance the situation. They suggested that if promotions in blogs are sponsored by corporate entities, corporation should be the one responsible in getting permit. Also, the bloggers giving away items for free started with the intention of rewarding their community as a way to attract them to constantly visit and support their blogs. According to the Philippine Retailers Association, the TWG must carefully craft guidelines for online promotions that would be fair for both personal bloggers and businesses. Further, they cited that blogging is another form of no purchase required promotion. The Chairman recommended that individual/personal bloggers must be identified then segregated from businesses using e-commerce as their platform. Bloggers themselves should help identify blogs doing business as stand alone or thru corporate entities. The TWG scheduled its second meeting on 26 September 2011 but only the BTRCP Director and two (2) of his staff (Mr. Bunyi and Ms. Estares) were present. Having no quorum, the meeting was cancelled.

RECOMMENDATION The BTRCP recommends the following: 1. Individual bloggers are not required to file and secure sales promo permit. 2. Individuals who work with companies or are being utilized by companies in their product advertising and marketing using blogs must file and secure sales promo permit. 3. Businesses who use blogging as their venue for product advertising and marketing should file the sales promo permit application. 4. Blogging community must police themselves and determine those professional bloggers who use blogs associated with business. 5. DTI NCR should brief IMMAP member associations/organizations to have them familiarized with DAO No. 10-02, Series of 2010 and JAO No. 01, Series of 2008 stating the rules and regulations on Sales Promotion and Electronic Commerce. CONCLUSION 1. There is no need to extend the de minimis rule. 2. DTI-NCR should monitor and implement DAO No. 10-02, Series of 2010 and JAO No. 01, Series of 2008 stating the rules and regulations on Sales Promotion and Electronic Commerce.
hab / bloggers /FINAL Report on Blogging2