China’s proposed e-commerce law targets fakes

25/06/2018

A proposed Chinese e-commerce law would make online retail platform operators accountable for counterfeit goods sold by its merchants, as part of the country’s desire to root out rampant fakes on virtual marketplaces.

 

The latest draft of the law was reviewed by China’s parliament last week, the South China Morning Post reported.

Under current Chinese law, only the merchant is responsible for fakes they sell.

“This [draft] legislation is almost certainly going to be passed. It puts the onus on the platform operators to better police online sales,” Paul Haswell, a lawyer who advises technology companies at the international firm Pinsent Masons, told the SCMP.

Haswell noted that the law would disproportionately effect smaller platforms that don’t have the means to tackle counterfeiting as effectively as larger e-commerce players like JD.com and Alibaba Group.

 

“This [draft] legislation is almost certainly going to be passed. It puts the onus on the platform operators to better police online sales,” said Paul Haswell, a lawyer who advises technology companies at the firm Pinsent Masons.

 

Alibaba reported it identified and closed 24,000 online stores selling fakes on its Taobao marketplace, the outlet said.

In May, Swatch CEO Nick Hayek said in a televised interview that he thought Alibaba was doing a better job than Amazon at fighting fakes.

“If I look what Alibaba is doing and all these they are trying to make a service to the consumer and to earn money. And they are fighting actively against fakes. This Amazon is not doing,” Hayek told CNBC.

The head of the Swiss luxury watch brand’s controversial words followed the collapse of a deal that would have made Swatch’s products available on Amazon.

 

Alibaba reported it identified and closed 24,000 online stores selling fakes on its Taobao marketplace.

 

After months of negotiations, Hayek pulled out, claiming the e-commerce giant was not “proactively policing its site for counterfeits and unauthorized retailers.”

Both JD.com and Alibaba have set up anti-counterfeiting groups to help change the perception — and reality — that China’s e-commerce platforms are lax on enforcing intellectual property laws and allowing fake merchandise to flood the marketplaces.

Alibaba also committed $160 million to combating fraud in 2017, and strengthened tech and personnel devoted to the anti-counterfeit fight.

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