Ten years ago, online retailers such as Flipkart, Snapdeal and Amazon probably had immunity when it came to responsibility for the authenticity of the products sold on their platforms.
On the Internet, counterfeit electronics, counterfeit clothing, cosmetics and over-the-counter medicines are in circulation.
However, the flood only started after a court ruling against the dotcom vendor Baazee.com in 2004 for selling a miserable student video on its website.
This creates the conditions for the application of the laws to intermediaries that neither the buyers nor the OEMs (Original Equipment Manufacturers) could take over earlier. This is due to the size and influence of the customer base.
In view of the way in which the draft electronic commerce guide is being drawn up, this is, according to the experts, a thing of the past.
This has contributed to an increase in the number of legal disputes, both between original and counterfeit manufacturers and between manufacturers and online traders, also known as intermediaries in the world of electronic commerce. An e-commerce expert explained that policymakers are indeed following the main online intermediaries in the field of counterfeiting. Counterfeiting is a real and serious problem. According to the Association of Authentication Solution Providers (ASPA), India suffers losses of more than Rs. 1 trillion a year from consumer sales and purchases of counterfeit products.
In the past, intermediaries have enjoyed some protection thanks to the Information Technology Act (2000), which gave them security rules that are still part of the relevant legislation. However, Nandan Pendsey of AZB & Partners remarked that the facilitator should be a person who just acts as a guide and does nothing to influence or change the content of the message.
The new e-commerce policy being developed by the government is expected to extend its scope to four main areas. These include access to data, the fight against counterfeiting, market regulation and inventory models, as well as consumer protection measures.
The decision of the Supreme Court of Delhi in the case of Christian Louboutin SAS against Nakul Bajaj & others shows whether the Internet market can be interpreted as an intermediary, depending on its involvement in one or more activities, as in this case. This includes ensuring the transport, storage and quality control of the products on the platform, repackaging the products with their own packaging, advertising the products on the platform and providing guarantees of authenticity, according to Pendsey.
Mr. Pandsey added: The court also stressed the importance of the duty of care as prescribed in the guidelines for intermediaries under the Information Technology Act.
Recently, legislation has required providers to offer certificates of authenticity and identification data in order to track and trace persons and to create a much more user-friendly and transparent common platform. The house of Anita Dongre, one of the leading fashion manufacturers, was present at the reception because the design work was interrupted. The problem became so serious that we had to sue a number of well-known offline retailers in New Delhi, says Kavindra Mishra, CEO of the fashion house. Normally, our designs for brands like Global Desi are honestly copied by small operators who work at night, and we use every means to contain them.
We work with all major online stakeholders to ensure that our brands are well represented on their portals, Mishra said.
The battle for authenticity is leading to an increasing number of legal disputes, both between OEMs and counterfeiters and between manufacturers and online retailers. Mishra, who was CEO of Pepe Jeans India, said it is not uncommon for total sales of counterfeit products or their value to be equal to or even higher than the original.
Ganesh Prasad, technology partner at the law firm Haytan & Co, said a stronger regulatory framework was needed to control counterfeit products. A centralized government agency that only controls counterfeiting is one way to do this, he said.
Today there is also a law in America that prohibits counterfeiting, and I think it’s very prescriptive. The intermediary must, of course, be careful and checked when hiring a seller. Mr Prasad added that, in addition to e-commerce, he urgently needed a separate regulatory authority to combat counterfeiting. Because it is important to remember that imitators can be sold online, but made offline.