Liability Of Online Service Providers

The growing e-commerce footprint in India has prompted OEMs, SMEs and MSMEs to take the route of e-commerce and establish an additional channel of distribution. The adoption rate has been much slower as compared to retail industry but the manufacturing is catching on fast. Let’s understand the glitches of the E-Commerce sector from the brand protection perspective before getting onto the bandwagon.

- Shreedhar Parundekar

The journey of e-commerce in India has been phenomenal. What started as a buzzword has now become a household reality and quintessence of the business world. The country has witnessed tremendous growth in the e-commerce world, changing the way people transact. The online market space is progressing in terms of diverse offerings; ranging from travel, movies, hotel reservations and books to matrimonial services, electronic gadgets, cosmetics, apparel, footwear, fashion accessories and even groceries.

A recent Gartner report revealed that the Indian e-commerce space is growing at nearly 40 percent each year, and is currently worth around INR 45,841 crore!

With the growth of internet commerce, new legal challenges have also been created. Of these challenges, dealing with counterfeit goods is one of the biggest concerns. Just a few days earlier a group of luxury goods makers sued Alibaba Group Holding Ltd. Reason? The suit was filed by the luxury brand owners contending that the Chinese online shopping giants had knowingly made it possible for counterfeiters to sell their products throughout the world. The lawsuit was filed in Manhattan Federal Court by Gucci, Yves Saint Laurent and other brands owned by Paris-based Kering SA seeking damages. This raises the question as to the liability of online service providers. While on one hand Intellectual Property owners are trying to effectively protect and enforce their rights, on the other hand online providers are trying to avoid liability for infringements committed by users of their sites.