Fake Products Online & the Responsibility of E-Commerce Websites

Fake products online: Is it not the responsibility of e-commerce websites to maintain the quality and standard of goods sold on their platform?

How many of us check seller details before buying a product? Only after an increase in fake listings does Amazon start adding the seller's address to the product details. A trusted e-commerce website like Amazon or Flipkart must be authentic if it is fulfilled. Most customers trust reputed e-commerce websites. After all, won't a company worth billions of dollars protect its customers? But even reputed e-commerce websites are filled with fake sellers and counterfeit products. Most e-commerce websites have made attempts to tackle the issue of fakes and fraud. But to what extent are these companies taking real accountability? 

Who is at fault, and who takes the fall?

The above question has recently been a topic of debate for the Parliamentary Standing Committee on Commerce. The committee submitted a report titled 'Promotion and Regulation of e-commerce in India' to the Rajya Sabha for further action. The report dismissed all common claims of e-commerce platforms to defer responsibility. For some time, e-commerce giants have been using the volume of transactions and listings as a shield. Claiming they have no control over their listings and sellers can no longer be an excuse. But the report's most intuitive yet valid argument was that while major players shift blame, the customers pay a heavy price. 

What happens when the seller associated with an e-commerce platform fails to deliver a product? Who helps a customer facing a loss due to the negligence of sellers?

Indeed, marketplaces do not manage or control the inventory directly. But can reputed E-commerce websites that promote a product on their platform shirk from taking any responsibility for the product? After all, both brands and customers trust the marketplace sites to act as responsible intermediaries. 

Draft Rules Set by the Parliament Panel for 2022:

The boom in e-commerce is a welcome sign for India. e-commerce has entered Tier 2 and Tier 3 cities, along with last-mile delivery options. With the global digital transformation, e-commerce is almost unstoppable. The Indian market offers a much-needed environment for e-commerce giants. So the government is set to take a balanced approach without over-regulating e-commerce sites. After all, whom does it benefit if the e-commerce sector takes a beating?

Here are some of the proposed changes:

• e-commerce firms need to take the role of intermediaries between the seller and end-user

• Large companies need to have a grievance redressal system in place for customer complaints

• Flash sales are to be prohibited. But more clarity is expected in this regard.

• Third-party sellers cannot sell wholly or partially owned label products of the e-tailers 

Overall, the committee recommended that marketplace websites have an active role to play in preventing counterfeit sales. While the regulations are still under discussion, reputed e-commerce websites have taken proactive steps. 

Fake Listings and Products: Solutions Implemented So Far:

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Have you heard of Amazon's Project Zero launched in 2019 for India? Project Zero was the company's first significant step toward tackling the issue of counterfeit products on its platform. Backed by machine learning technology, Project Zero automatically detects fakes. Brands need to register with Amazon's Project Zero to get its benefits. Are you wondering about the efficacy of this product? Amazon claims that Project Zero is a self-service tool for removing counterfeit products. If your brand detects one fake product listing, then Amazon's system can detect and remove 600 more. The technology is intuitive and self-learning.