MANILA - (UPDATE) Lazada on Thursday said it might consider banning "small sellers" as well as food and drug vendors on its app after a Senate panel flagged the sale of thousands of counterfeit goods on the online shopping giant's platform.

"We will probably have to go to a direction where no small seller can list on our platform or the food and pharmaceutical category will be deactivated," Lazada chief executive officer Ray Alimurung said during a Senate Committee on Trade, Commerce and Entrepreneurship hearing.

Alimurung gave the remark after Sen. Sherwin Gatchalian pushed for a measure that would hold e-commerce service providers liable for the sale of counterfeit items, after the senator found dietary supplements - banned by the Food and Drug Administration - being sold on Lazada and Shopee.

"Siguro we can forgive mga pirated videos... pero [but] this is something the public consumes," Gatchalian said.

"There is a chance for consumers to buy these things to the detriment of their health... Obviously the platforms are not doing enough to stop these unscrupulous activities on their own platforms," he said.

• Gatchalian wants online shopping apps penalized for sale of fake items

Aside from counterfeit drugs and supplements, the Optical Media Board (OMB) said that around 900,000 items - including Adobe and Microsoft products - "without necessary license or permits" are being sold on Lazada and Shopee, two of the biggest online shopping apps in the country.

Some 40,000 pieces of unlicensed USBs, SD cards, and other tech items amounting to P20 million have been confiscated, but the illegal sale of these goods continue online, OMB chair Anselmo Adriano said.

Alimurung said Lazada has been enforcing multiple layers of security in its app, but some unscrupulous sellers still get past these gates.

"We have an intel property portal. Brand owners are enrolled in this portal. It is possible that they are not doing it or they are not doing it fast enough," he said, noting that some 50 million products are sold on Lazada.

An automated system that detects blacklisted sellers who are trying to enlist again is also in place, he said.

"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.

Sen. Pia Cayetano said it would be unjust to shut down online shopping companies over the sale of illegal goods because counterfeit items are also sold in physical shops.

"Hindi tayo magkaka-skin disease [we won't get a skin disease] for wearing a fake Lacoste shirt, but when it comes to food, pharmaceuticals and supplements it becomes a concern. But this also happens in brick and mortar stores," Cayetano said.

"It is a valid concern. We need to find solutions, but I think we are going in the wrong direction if we would just close down online platforms because it's (fake products) available there," she said.

"It (fake products) is also available in streets. It's available everywhere," she said.

Lazada is "very willing" to cooperate with the Senate in finding ways to plug the sale of illegal goods online, Alimurung said.

"I understand the concern and we take it seriously," he said.

"We would like to brainstorm with your body... on how we would do it because there is a practicality aspect," he said.

Shopee said it would just submit its position paper to the Senate.