Recently, media exposed prevalence of fake Serta mattress of aprovider on an online trading platform (“Online Platform”)It is reported, a shop called Serta Household Life Shop (the “Seller”) on the platform asserted “absolutely authentic, decuple penalty for fake” on its mattresses. Ms. Chen bought a mattress with 14,000RMB from the Seller, which later was confirmed a high imitation fake product. Ms. Chen tried to negotiate with the Seller but reached nothing. Furthermore, not only had the link of such goods been removed by the Seller, but also Ms. Chen’s comments on same had been deleted, and as a result the complaint channel had been shut down as well. According to the report, though a statement on Serta’s official website alleged that no online sale had been authorized officially by Serta, nevertheless, there remain nearly 200 shops using Serta as the searching keyword on the Online Platform.

Based on the above facts, HaoLiWen E-Commerce legal services team believe that the Online Platform may be confronted with following legal risks:

  1. In case the Online Platform actually provided no more than a phone number to Ms Chen and the number holder rejected to be identified as the Seller, it may be required to undertake an alternative liability to the consumer for its failure to provide valid contact information of the Seller to the consumer pursuant to Article 44 (1) of the Law of the People⊙s Republic of China on the Protection of Consumer Rights and Interests (hereafter referred to as “PCRI”) .
  2. In case it is indeed impossible for the Online Platform to provide valid contact information of the Seller, it is likely to have violated Article 23 of Measures on the Administration of Online Transactions(hereafter referred to as “Administration Measures”) which requires a business operator of a third-party transaction platform to perform identity verification and registration of sellers applying for access to the platform. Besides, the Online Platform might also be given a warning and be ordered to make correction by the administrations of industry & commerce pursuant to Article 50 of the Administration Measures. If it refused to make correction, a fine between RMB 10,000 to RMB 30,000 will be imposed.
  3. Where i) it is aware of the statement on Serta’s official website in addition to the fact that Ms Chen has bought a fake Serta mattress; ii) it fails to take any verification measures on shops selling Serta products on its platform; and iii) as a result more consumers have purchased fake Serta products, the Online Platform is likely to bear a joint and severable liability to these consumers in accordance with Article 44 (2) of the PCRI for failure to take necessary measures where it knows or should have known that infringements upon the legitimate rights and interests of consumers are taking place on its platform.
  4. Pursuant to PRC Trademark Law, the Online Platform might be liable in addition to these infringing sellers for joint infringement of Serta trademark rights, and/or be investigated and penalized by administrations of industry & commerce.