Gatchalian wants online shopping apps penalized for sale of fake items

Katrina Domingo, ABS-CBN News

Posted at Sep 03 2020 08:01 PM

MANILA — Sen. Sherwin Gatchalian on Thursday said online shopping apps should be held liable for the sale of counterfeit items on their platforms as this would boost efforts to clamp down on products that may be dangerous to Filipinos' health.

The government needs to create a mechanism that would push online shopping firms to ban unscrupulous traders from doing business, Gatchalian told ABS-CBN News after a panel tackled his Senate Bill 1591, which seeks to regulate e-commerce in the Philippines. 

"Right now it is self-regulation. They are self-regulating themselves and it is not working because marami pa ring nakakalampas (many still get past)," he said, referring to Shopee and Lazada, the 2 largest online shopping apps in the Philippines.

"There is no incentive for these platforms to weed out illegal items and unscrupulous sellers because they make money out of it also. Whatever we buy from online sellers, they get a cut," he said.

Under Gatchalian's bill, online merchants and shopping platforms that will sell fake or unregistered items will have to pay a "fine equivalent to 100 percent of the amount of the digital goods offered."

E-commerce platforms and online sellers who will fail to submit complete details of their shops and goods may also face a separate fine of between P500,000.00 and P5 million, according to the proposal.

Their business permit may also be revoked "at the discretion of the court," Gatchalian said.

While the Philippines has existing laws and mechanisms to deter the production and sale of fake items, the policies do not cover overseas sellers, the senator said.

"Our laws do not reach them because they are located in another country. The only way we can reach them is through these online selling platforms," he said.

"The burden and the responsibility to double check and triple check on the sellers will be on the platforms," he said.

Lazada has been regulating its sellers, but sellers of illegal goods get past the system because there are about 50 million items sold on the app, the company's chief executive officer Ray Alimurung said during the Senate Committee on Trade, Commerce and Entrepreneurship hearing.

"It is not for lack of doing things... It's just a matter of us trying to do better mouse traps when these guys try to develop better mice," Alimurung said.

"The alternative is to potentially just close down everybody, but we feel that would do more harm than good," he said.

Shopee said they have similar mechanisms on their app to arrest the sale of counterfeit items.

But the Optical Media Board (OMB) said around 900,000 "without necessary license or permits" are still being sold on the Philippines' two biggest online shopping apps.

"We don't want the Philippines to be the dumping ground of illegal products," Gatchalian said.

"Obviously, the e-commerce platforms are not doing enough," he said.