Ecommerce player Shopclues has been slapped with a legal notice from audio devices manufacturer Harman International for selling fake and counterfeit products from various vendors on its website, reports the Indian Express.

ShopClues

The report adds that a probe by Harman International, which makes the popular JBL speakers and headphones, found a sizable number of fake products on the website and has asked the e-tailer to withdraw all products and remove any listings of fake JBL branded products as well as blacklist the vendors.

This seems to be the second time this month Shopclues has run into trouble for showcasing and selling counterfeit products. L’Oreal, Tommy Hilfiger, Skullcandy and RayBan have initiated legal actions against Shopclues in the Delhi high court in connection with sale of counterfeit goods and the HC has granted interim injunctions against the website, restraining it or anyone associated with it from the use, manufacture, sale, supply or display of counterfeit goods of these brands.

We have written to Shopclues about the legal notice and what steps the company has taken to ensure consumer protection and will update the same once we hear back from them.

Need for greater consumer protection

The latest incident highlights a growing problem in online marketplaces and shows the need for greater consumer protection. One of the most memorable examples in December last year was when a customer ordered two iPhones from Snapdeal.com but was delivered pieces of wood.  Some more examples here and especially the fake Rolex case, here.

As we’ve highlighted before, maybe it’s time that India got a consumer protection regulator, which can define processes and accountability in the value chain. It’s strange despite so many complaints on forums and comment sections, the Indian government has only received nine complaints regarding fraud committed by e-commerce companies.

We also understand that most ecommerce websites are aggregators and cannot be 100% sure of its vendors and most of the action taken against fraud is post-facto. For example, Amazon delists sellers if they are selling fake products and will take back the fake product and replace it with a genuine product. However, Amazon does not check products for authenticity prior to shipment but it does random checks via mystery shopping and for complaints about fake products, apart from processes it has present.

Nikhil adds: Shopclues is a marketplace, which connects buyers and sellers, and this takes us back to the question about whether intermediaries should be held responsible for products that merchants sell via their platform. In India, Section 79 proffers safe harbor to Intermediaries, as long as they act on complaints and do not knowingly allow the usage of their platform to break the law. Safe Harbor is under threat here.

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