E-commerce Law in the works

creative picture3The internet has become a popular and easy channel for product distribution around the world. It has created a marketplace of more than half a billion users in China, more than a third of the world’s total online population, and is still expanding. Apart from being a forum for legitimate vendors and original products, the internet is also used by businesses as a platform for the distribution of counterfeit goods which infringe intellectual property rights (IPR).

Alibaba.com and Taobao are the main online platforms of the e-commerce giant, Alibaba Group. Alibaba.com and Taobao dominate the business-to-business (B2B) and business-to-consumer (B2C) retail platforms respectively with 700 million users worldwide. However, both are also being used by businesses for illegal activity, including:  trade mark violation and copyright infringement.

In response to the rise in IPR infringement on e-commerce platforms, the National People’s Congress Financial and Economic Affairs Committee have been tasked with drafting China’s first e-commerce law to be completed by the end of 2015. The new law will include provisions for the protection of consumers’ interests and intellectual property rights as well as an honest trade environment and quality of goods and services.

This new law will look to encourage innovation and competition while taking into account regulation; however a spokesperson from the State Administration for Industry and Commerce (SAIC) is still encouraging e-commerce platforms such as Alibaba.com and Taobao to also bear some of the responsibility for policing brand infringement. The e-commerce sites already offer services for regulation on their site and consumers can actively monitor the site themselves and request take-down notices in the event of infringement, given the company can provide proof of ownership.

If the new law can guarantee that platforms provide a trusted means to certify brands and products as the real deal, Chinese consumers do and will use them. They are more discerning and affluent than ever before and want to display that by buying genuine, not fake, products. This at least should inspire some confidence in European businesses thinking about entering China via the Internet, and reassure them that if they take the available steps to show the authenticity of the products they offer, while also monitoring for infringements, it will more often than not pay off.

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