China’s draft e-commerce law may increase pressure on small platform operators to fight fakes

China’s draft e-commerce law may increase pressure on small online retail companies to fight the sale of counterfeit products on their platforms, as lawmakers aim to make internet retail site operators directly liable for such online transactions.

Part of the proposed e-commerce law, the latest draft of which was reviewed by China’s parliament last week, would make domestic online retail platform operators jointly accountable with merchants for selling any counterfeit goods online. Online merchants are currently solely liable when caught selling fake products.

Once passed, the e-commerce law looks to rid online sales platforms of fake goods and clean up the country’s reputation as a major source of knock-off merchandise.

It could also pose a greater risk of sanctions for the country’s smaller online shopping platform operators, which may not have the same capabilities as China’s bigger players when it comes to identifying and removing counterfeit products, according to Paul Haswell, a partner who advises technology companies at international law firm Pinsent Masons.

“This [draft] legislation is almost certainly going to be passed,” Haswell said. “It puts the onus on the platform operators to better police online sales.”