In a ground-breaking move, China has introduced a legislation that will make e-commerce sites like Alibaba and Piduoduo accountable for counterfeit goods sold by third-party through their platform. The legislation was adopted by the 13th National People’s Congress. As per article 41 of the new law, it is mandatory for E-commerce platforms to establish rules and protect IP rights.
As of now sellers or third party was solely responsible for the distribution of counterfeit products on the e-commerce platforms. With the enactment of the new law, both online retail platforms and sellers are responsible for the sale and distribution of duplicate items.
The new law will be implemented on January 1, 2019. According to the new legislation, e-commerce companies will have to act quickly after a violation has been reported. Failure to take timely measures will lead to a fine, for serious violations the fine is more. The new law also encompasses non-conventional shopping channels like e-commerce providers, social media operators like WeChat. WeChat is owned by Tencent and has close to 1 billion active users. The platform is frequently used for trading goods along with social networking.
According to reports, China’s administration for market regulation has asked to investigate Pinduoduo for violating IPR by selling phoney goods though it was denied by the company. Alibaba which has created an anti-counterfeiting alliance has grown to 1000 members which include brands like Samsung and Louis Vuitton. The US Trade Representative’s Notorious Markets list 2017 included Alibaba’s online marketplace, Taobao.com, which reportedly continued to sell a high volume of infringing products last year.