By Shilpi Sharan and Rima Majumdar
We are currently living in an era where shopping trends have transitioned from bustling storefronts to the palm-sized screen of our smartphone. The Covid- 19 pandemic has further catalyzed the culture of online shopping and innumerable e-commerce websites have mushroomed in the cyber space. E-commerce platforms have become everyone’s go to place for all purchases, you name it and they have it. Yet amidst the ease, the fundamental question that looms large is that “Who are we really buying from in the vast expanse of cyberspace?
Recently, the Hon’ble Delhi High Court tackled this very question in the case of Abhi Traders v. Fashnear Technologies Private Limited & Ors.,[1] by mandating e-commerce websites to disclose the names of sellers to customers. This ruling marks a significant step towards transparency and consumer empowerment in the digital realm.
In this case, the Plaintiff filed a case for Copyright Infringement and passing off against the Defendants – 2 to 9 who were involved in advertising, publishing and offering for sale of products which were a copy of the Plaintiff’s products. Furthermore, the Plaintiff also submitted that Defendant- 1 (Meesho) was under the obligation to publish contact details of all sellers on its platform under Rule 5(3)(a) of Consumer Protection (e-commerce) Rules, 2020. The Plaintiff alleged that this omission by the Defendant-1 made not only contravened the legal obligations incumbent upon e-marketplaces but also implicated Defendant No. 1 in aiding and abetting the other Defendants in their infringing activities.
The Hon’ble Delhi High Court in this case passed an injunction order against the Defendants- 2 to 9, restraining them from using the Plaintiff’s mark. The Court also prohibited other sellers who were displaying the products that imitated the Plaintiff’s product on the e-commerce website Meesho.com owned by Fashnear Technology (P) Ltd, (Defendant-1). The Court also directed Meesho in the case to “reveal all the available details of the sellers including the address, mobile numbers, email addresses, total sales made by the sellers, GST details, payments made to the sellers since the time listings have been put up”[2]
The Consumer Protection (E-Commerce) Rules, 2020
The main objective of the Consumer Protection (E-Commerce) Rules, 2020 to protect consumers on E-Commerce sector and at the same time foster an environment for the facilitation of transparent transactions and fair trade practices. E-commerce platforms like
Rules 3 (g) of the E-commerce Rules, 2020 defines Marketplace E-commerce entity as “E-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers”.
Liabilities and Obligations of E-commerce Entities
Rule 5 discusses about the Liabilities of marketplace e-commerce entities and Rule 5(3)(a) specifically outlines the obligation of marketplace e-commerce entity to disclose details about “the sellers offering goods and services, including the name of their business, whether registered or not, their geographic address, customer care number, any rating or other aggregated feedback about such seller, and any other information necessary” which can help the consumer to make an informed decision before making any transaction online.
In order to follow the letter and spirit of the law enacted to safeguard the rights of the consumer in this digital jungle, the courts in its various judgement have stressed on the need of e-commerce platforms to be complied with Rule 5(3)(a) of the Consumer Protection (E-commerce) Rules, 2020.
Case studies on disclosure of seller details on E-commerce platforms
In the case of Tibra Collection v. Fashnear Technologies (P) Ltd,[3], the Plaintiff was involved in the business of selling designer clothing items catering to both men and women on various e-commerce platforms.
The Plaintiff got to know that Defendant nos. 2-6 were using photographs, copyrighted pictures owned by the Plaintiff without permission and authorization to sell there counterfeit products on e-commerce platform MEESHO owned by Fashnear Technologies (P) Ltd (Defendant-1). Observing the situation the Hon’ble Delhi High Court opined that Defendants 2-6 have misused the photographs and copyrighted pictures of the products owned by the Plaintiff to sell their counterfeit products and gain monetary benefit by riding on the Plaintiff’s reputation.
The Court further noted that “While E-Commerce provided new platforms for small designers and businesses, the same ought not to be misused for the purposes of imitating and producing look alike products thereby violating the intellectual property rights of the plaintiff. There was also an obligation upon the E-Commerce platform to ensure that the complete details of the sellers were available on the platform so that the consumer was aware of the sellers from whom the product have been purchased and the entity, who was listing the product.”[4]
Similarly in the case of, Shri Gandhi Behera v Flipkart Internet Private Limited[5], a similar issue regarding compliance of Rule 5(3)(a) of the Consumer Protection (E-Commerce) Rule, 2020 was put forth in front of the Berhampur District Commission. In this case Defendant had cancelled the Plaintiff’s order on its own. Upon inquiry by the Plaintiff, the Defendant justified its act by stating that the cancellation was due to an unforeseen error that had occurred at the seller’s end. Aggrieved with the Defendant, the Plaintiff filed a complaint at the District Consumer Disputes Redressal Commission, Berhampur. The Plaintiff further alleged that the Defendant did not furnish accurate details of the seller like accurate name and address of the seller.
Upon inquiry it was disclosed that the Defendant not only failed to furnish the seller’s details to the Plaintiff but also did not provide any information of the seller on its website. The District Commission imposed costs of Rs. 20,000 on the Defendant for causing emotional distress to the Plaintiff and instructed the Defendant to be compliant with the Rule 5(a)(3) of the Consumer Protection (E-Commerce0 Rules, 2020.[6]
Apart from addressing the issue of non-disclosure on E-commerce platforms, the Indian Courts in plethora of cases have discussed the issue of counterfeit and its impact on the IP rights of the brand owners as well as the consumer. In the case of Sirona Hygiene Private Limited v. Parulben Navnath Chothani[7], the Hon’ble Delhi High Court has observed that sale of counterfeit products on the internet has become rampant. The Plaintiff in the case alleged that look-alike and counterfeit of its products were being sold on the internet through various e-commerce platforms by Defendants. While examining the case, the Hon’ble Delhi High Court noted that:
- E-commerce platforms are being used for selling counterfeit and knockoff products;
- Sale of such counterfeit/knock-off products has become prolific on the internet and needs to be arrested in order to protect the trademark owners as well as customers.
The High Court of Delhi also observed that the said manufacturer and seller’s products and the counterfeit products were simultaneously being promoted and sold on the online platforms, thus the Court directed e-commerce platforms to remove such products and also, share a complete list of all sellers of such products with the complainant.
Conclusion
The phrase of “Buyer Beware” has been around for a long time. The phrase acts as a constant reminder for people to be careful when purchasing products. On E-commerce platforms, where thousands of people shop on an everyday basis, it becomes more important to know who you are buying from. There are legal frameworks which puts obligation on e-commerce websites to take appropriate measures in order to safeguard consumer rights. E-commerce websites, by disclosing the sellers name and other important details to the customers, demonstrate their commitment to ethical business, transparency and consumer protection. This helps consumers navigate the realm of online shopping without the fear of being deceived or cheated.
Swayamsiddha Das, Associte Advocate at S.S. Rana & Co. has assisted in the research of this article.
[1] 2024 SCC OnLine Del 1604
[3] 2023 SCC OnLine Del 6237
[5] CC/88/2022
[7] CS (COMM)- 260/ 2022.
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