Keep yourself updated on E-commerce sites, third party sellers and fake products. With many e-commerce sites coming under the legal radar these days for allegedly selling fake products, let us tell you more on what happens when e-commerce sites like Flipkart, Amazon, Shopclues sell fake or duplicate products?
Sites like Flipkart, Amazon, Shopclues etc are online shopping portals. They are into the business of providing platform/services to facilitate transactions by and between respective buyers and sellers, thus enabling dealing in a plethora of categories of goods. As an intermediary, they are not involved in the sale transaction but only in providing the online platform. They do not sell any products of their own on the website. The third party sellers sell their products and visitors/buyers purchase such products from the respective sellers on the e-commerce websites. This contract between the seller and buyer is a bipartite contract and the e-commerce sites are not a party to this contract. It is important to note that e-commerce sites hold no right/title to or interest over the product nor do they have any obligations or liabilities with respect to such a contract. For example Shopclues had been slapped with a legal notice from audio devices manufacturer Harman International (which sells speakers and headphones under the JBL brand) for selling fake and counterfeit products from various vendors on its website. L’Oreal, Tommy Hilfiger, Skullcandy and others have also initiated legal actions against Shopclues in the Delhi High Court in connection with sale of counterfeit goods and the HC had granted interim injunctions against the website, restraining it or anyone associated with it from the use, manufacture, sale, supply or display of counterfeit goods of these brands. It was also alleged that fake Xiaomi Power Bank were being sold on Amazon India, last year. In fact, verified buyers had written reviews indicating that the product being sold was fake. Now the question arises that should online marketplaces (intermediaries) be held accountable for products sold by merchants via their platforms?
In India, Section 79 of the Information Technology Act offers safe harbor to intermediaries, as long as they act on complaints and do not knowingly allow the usage of their platform to break the law. Therefore, legally these e-commerce marketplaces seems to be on safe ground. What steps do these e-commerce sites takes to curb the fake product selling issues?The maximum they do is only blacklist the offending sellers. There’s no doubt that online aggregators and marketplaces are good for consumers and competition. But the questions remain- Who is accountable when things get messed up? What about the liability of these platforms?
We are yet to find that out.