Hangzhou Internet Court will soon hear a case brought by Taobao against a store selling fake masks. Taobao claims that the sale of fake goods not only infringed on buyers’ rights and interests, but also degraded consumer trust in its platform. 

Why it matters: Medical supply shortages in China as a result of the Covid-19 outbreak have left consumers vulnerable to online sellers who claim they have masks in stock. Fraudsters are using this demand for their benefit and placing people at risk of infection. 

  • China’s Ministry of Public Security announced yesterday that it had confiscated 31 million fake masks and related materials valued at RMB 174 million (around $24.7 million), and arrested 1,560 suspects.

Details: This is the first court case to be brought by an e-commerce platform against fake mask sellers since the outbreak of the virus, reported (in Chinese) the Paper.

  • Taobao has promised to block traffic to suspected fakes and hand over clues to law enforcement departments. 
  • Its counterfeit special task force worked alongside Suzhou’s Market Regulation Bureau to find 10,000 fake masks at the premises of the biotech company involved in the allegations.
  • Alibaba e-commerce platform Taobao has demanded the seller issue an apology to its users and is suing for compensation of RMB 1 million, according to Sina News.
  • In its complaint, Taobao cites the service agreement signed by the seller at the time of registration which bans the sale of any goods which infringe on intellectual property rights, and stipulates that all subsequent losses require compensation.
  • China’s state media Xinhua said that the online public trial would also serve to warn and educate others.  

Context: In a press conference on Wednesday, Supreme People’s Court deputy president Zhang Shuyuan said that the courts, in accordance with criminal law, would severely punish crimes that disrupted epidemic prevention efforts.

  • Taobao is not the only platform that sellers are using to hawk fakes. A resident of Xiamen told TechNode that he had recently reported a WeChat contact for selling fake masks. The seller was listing masks for RMB 10 (around $1.40) per piece, and required that buyers meet a minimum purchase amount of RMB 1,000.
  • The resident said that he was concerned that the seller would “block buyers and run after receiving a deposit.”

Update: added detail about lawsuit demands.

Lavender covers regulation and its effects on people. She previously worked in a policy advisory analyzing China’s internal governance for foreign governments and multinationals. A History graduate from...

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