Editor’s Note: Here is an excerpt of IMMAP’s response to the DTI Sales Promo issue. You can view the full message on their website.

While we appreciate the DTI reaching out to communicate its policies with concerned individuals and entities, IMMAP recognizes that the definition of eligibility they are operating on can be seriously problematic for brands, companies, and individuals who run online promotions, many of them out of their own pocket.

The Consumer Act of the Philippines, in its current incarnation (it was last updated in 1992), does not seem to take into consideration the following:

1. The notion that a raffle can be conducted purely for goodwill purposes, and not by a company but rather an individual.
2. The fact that timelines to deploy and operate an online promotion have shrunk from weeks to days to hours (location-based promos).
3. The fact that individual user experiences online can vary depending on previous behavior, resulting in dynamic pricing or incentive models.

We would like to encourage other consumers (non-bloggers, non-marketing / advertising professionals, or anyone not involved in sales promotions) to comment on this issue, in relation to the Consumer Act. This can be brought to the ongoing discussions with DTI. Time for your voice to be heard.  - Jam Mayer-Flores

Blog Post

Last Thursday (July 28), I had the privilege of being invited by Ms. Janette Toral of Digital Filipino to the IMMAP-DTI meeting held in Makati City.  Here are some of the highlights in the discussion:

Under the Consumer Act of the Philippines (R.A. 7394), a Sales Promotion is defined as:

Techniques intended for broad consumer participation which contain promises of gain such as product, security service or winning in contest, game, tournament and other similar competitions which involved 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.

With or without the need of a product purchase, the DTI requires ALL promotions/contests (online and offline) to have permits.

• The fee ranges from P1,000 to P5,000 depending on the geographical scope and prizes, whichever is higher.  For the detailed procedure and breakdown of fees, please click here.  (File courtesy of Ms. Janette Toral of Digital Filipino)
• Any changes or add-ons in the contest mechanics will require another permit which costs P300 only.

A permit is only required if the contest will involve “consumers”.

• Example: If I have a website and I’d like to conduct a raffle promo for my “advertisers”, a permit is not needed anymore because my advertisers are not considered consumers.

The DTI is currently implementing strict screening prior to the approval of Facebook-based contests.

• The DTI is not amenable in approving the “Like” feature for popularity contests due to numerous reports of vote manipulation and in compliance with Facebook’s Promotions Guidelines.  Instead, the DTI is requiring organizers to have a microsite wherein they can conduct the voting process.
• The DTI may only approve a small percentage of the “Like” voting (e.g. 10%) so as not to greatly influence the contest results.
• IMMAP, on the other hand, still advised the promoters to carefully take into consideration the Facebook’s rules for they may be suspended by the site administrator once they are caught violating the said guidelines.

The DTI tests in actual all the computer-generated systems that are being used for the contests.  

Unfortunately, due to the lack in manpower and resources, they still do not have someone who can really be called an “I.T. expert” for online promotions screening.  Thus, it cannot be avoided that some online contests are not scrutinized thoroughly and declared as 100% cheat-proof.   The DTI, nonetheless, is checking all the details of all online contest mechanics to the best of their ability prior to the issuance of permits.

The DTI does not approve contests that can be categorized as “game of chance” unless it is time-bound.

An example: The 7th commenter with the correct answer wins. There should be a timestamp corresponding to the post for transparency purposes.

The registration of a business name is with the DTI but the securing of a business permit (i.e. for operating an online or offline business) has to be done with the local government (i.e. mayor’s permit).

Currently, the DTI has no clear guidelines for individuals/bloggers who conduct online businesses/promotions. Nonetheless, the DTI advised them to secure necessary permits for their own protection and for the consumers’ as well.

Promotions sponsored by companies or individuals related to food, drugs and cosmetics are under the jurisdiction of the DOH and the BFAD.

The securing of permits should be done with the said agencies and not with the DTI.

The DTI has no online application for promotions as of now. 

Each and every contest is different from one another and requirements would depend on the set of mechanics being presented.  Thus, they still prefer to meet with the organizer(s) personally.

The DTI has received some complaints regarding group-buying sites and they are also required to secure permits for their promos.

Consumers are having a hard time contacting the DTI, may it be through phone or online.

Feedback system should be improved to let the consumers be aware of the status of their complaints that have been pending for too long (In my case, almost 2 years). The DTI promised to attend to each case being filed but it will take some time due to their lack of manpower.

Separate meetings will be set again to tackle the following:

• Blog-sponsored promotions
• Group buying sites
• Consumers’ protests and resolutions arising from online promotions

Thanks to the IMMAP (Internet and Mobile Marketing Association of the Philippines) for sponsoring the said meeting.  Cheers to a better and more fruitful online community and camaraderie!

SlideShare resource from Janette Toral:

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Addendum:

After the forum, I had the chance to talk to Ms. Rose Egmilan of DTI-NCR.  I was a bit surprised to know from her that if a complainant is not a DIRECTLY-AGGRIEVED PARTICIPANT of a contest, his/her complaint will have no merit/bearing.   She was referring to my complaint against Sony Ericsson for their anomalous contest implementation involving Facebook’s “Like” feature. Please refer to my previous post.

Isn’t this unfair: just because one is not a participant, he has no right to complain about a contest’s loopholes? Why would I join in the first place if I know that the contest is flawed?  I had a bad experience already with a contest utilizing “Likes”, so why would I allow myself to be a victim again just for the sake of filing a complaint?  It is like saying that I witnessed a robbery but since I was not the one who got robbed, I cannot report to the proper authorities?

Honestly, I have nothing to gain from Sony Ericsson as far as prizes are concerned, but what I only want is for them to be penalized administratively by the DTI for their irresponsible conduct of their Facebook-based contest last year.

Due to a combination of the DTI’s slow-paced resolution of complaints and some existing flaws in the implementation of our consumer laws, no wonder there is a prevailing sense of the “hayaan mo na” mentality among many of our consumers when it comes to pursuing complaints.  After digesting Ms. Egmilan’s statement, I honestly felt very disheartened to continue upholding what is right and what is just.

Is this really the sad state of local governance?