Senators rue lack of liability of online sellers for counterfeit goods

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In a Senate hearing on Thursday, Oct. 1, lawmakers said the booming online business and growing paperless transactions following the lockdowns across the country due to the coronavirus pandemic has spawned the need to further safeguard against fraudulent traders and sale of counterfeit items.

DTI undersecretary Ruth Castelo

“The very nature of online business which has borderless market, unlike the traditional brick and mortar stores, has practically provided the platform for the sale of counterfeit goods and has now necessitates us to strengthen consumer protection,” Sen. Sherwin Gatchalian said.

During the hearing which tackled Senate Bill No. 1591 or the proposed Internet Transactions Act, Gatchalian noted the lack of any liability in the country’s laws of online sellers for counterfeit products.

“Definitely, we have to find a solution to minimize or totally eliminate the exposure of these counterfeit items in our market and ensure that our consumers will not buy those items,” he said.

“This is where the challenge comes in and this is where the problem lies. Anyone can sell and anyone can buy but do we have enough safeguards to prevent counterfeit items to come in to the Philippine market?” Gatchalian asked.

Department of Trade and Industry (DTI) undersecretary Ruth Castelo told senators that, currently, they have no means to protect consumers from sellers that are not known in the country or which they have no access with.

While the proposed Internet Transactions Act, through the DTI, may be able to address consumer complaints with the registry of all online platforms or sellers in the country, the agency admitted it faces the difficulty in imposing liability to those that cannot be located or do not provide any physical address.

Gatchalian’s Senate Bill No. 1591 proposed the creation of an e-commerce bureau, a virtual one-stop shop for consumer complaints and internet transactions and regulatory body for online selling in the country.

During the same virtual hearing, Sen. Pia Cayetano pointed out there is a law — the Intellectual Property Code of the Philippines — which prohibits the selling of counterfeit products.

Cayetano stressed this after Lazada chief executive officer Ray Alimurung was supposedly quoted as saying that the buyers have an option to buy counterfeit or non-counterfeit products from LazMall.

“I have never heard any platform, whether it’s a mall or online, say something like that. I think that’s a very careless statement to make, if that is true that it came from them,” Cayetano said.

Alimurung, however, said Lazada strictly observes the Intellectual Property Code and will not allow their platform to be used to sell fake products.

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