Reaction on DTI Sales Promotion Permit for Bloggers

The article published on Janette Toral's blog, "Social Media Contest and Promotions Philippines," entitled, "Individuals, Bloggers, Businesses need a DTI Sales Promotion Permit even if there is no purchase required" stirred disgust and disbelief among many bloggers including me. However, I would like to comment on the wrong interpretation of the law as cited by the Department of Trade and Industry (DTI).

According to the Consumer Act of the Philippines, consumer is defined as "a natural person who is a purchaser, lessee, recipient or prospective purchaser, lessor or recipient of consumer products, services or credit"

In a personal blog contest, the winner and participant does not fall into this definition. First, he is not a purchaser, lessee, recipient of consumer products, services or credit. The product which he/she will receive as a prize does not serve as a promotion of that product but rather a promotion of the blogger's own blog for purposes of wider readership. The blogger does not receive any monetary compensation whatsoever from the prize he is giving away and in most cases these prizes came from the blogger's own purse.

The participant of any contest or online raffle maybe a prospective purchaser, lessor or recipient of consumer products, services or credit which the blogger incidentally promotes. However, since the blogger has no direct interaction with the producer or manufacturer of the product nor is he/she benifitting in such a similar way, this definition will not cover his follower.

In any case, the readers of a blog can only be covered by the definition of a consumer in cases where promotion is partnership between the blogger and the company producing such products or services. In that case, the burden of getting the DTI permit does not rest on the blogger but on the company producing the product or services.

The rest of the quote from the Consumer Act of the Philippines as posted in the blog and quoted again below refers to the "producer" of these products and services and not to the blogger doing the promotion. The burden of registration and permit is always with the company where these brands are registered.

"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 theret

Commonly, readers of blogs and contest participants are asked to do non-monetary participation in blog contests which involves non-purchase of products these includes subscription to the blog, Facebook page likes and sharing of the contest or blog. Someone cannot be considered a "consumer" until he/she had made an exchange in monetary terms to another individual. Hence blog readers of personal blogs are not consumers in this case.

A blog is NOT A BUSINESS ENTITY hence it is not covered by the rules under the Department of Trade and Industry and by the Consumer Act of the Philippines. However, bloggers who sell their own products online and create contests for that products is a clear exception to this analysis for in this case they are sellers/producers hence their blog readers became prospective buyers of their products for sale.

What about the fairness of online contests? Well, the main question here is WHAT IS THE IDENTITY OF THE BLOGGER DOING A CONTEST? If it is a blog for Asus, SM City or any other company related blog then they are subject to the DTI rule however individual blogs who run contests on their own without asking for any monetary favor in exchange of participation is logically and clearly not covered by this.

This is my opinion based on my interpretation of the law.

Comments and feedbacks are welcome as well.

Thanks for reading!
Share on Google Plus

About David D'Angelo

    Blogger Comment
    Facebook Comment

9 comments:

  1. This is merely a stupid move done by the DTI.. naghahanap lang sila na mapagkkukhanan ng pera kaya ganyan

    ReplyDelete
  2. Nice and concrete explanation! 

    ReplyDelete
  3. JuanmanilaexpressJuly 30, 2011 at 11:47 AM

    nice and well explained!

    ReplyDelete
  4. very clear explanation!

    ReplyDelete
  5. perhaps you can clarify then the sentence: "It also means techniques purely intended to increase the sales, patronage and/or goodwill of a product."?

    ReplyDelete
  6. A product in this case means commercial in nature.  For anyone to be considered a consumer he/she must be consuming a commercial product in which he/she had obtained for value.  A blog post which includes a contest definitely increases the patronage or goodwill of the blog but is it a commercial product?  I don't think so.

    ReplyDelete
  7. Please share this comments to other bloggers.  Bloggers need to know their rights and also the DTI needs to be informed.  Thanks!

    ReplyDelete