What has happened to online ecommerce platforms? Over
the past few months news reports have multiplied – or, perhaps, their underlying
issues have acquired greater visibility – that brand owners have been increasingly voicing criticisms against, sued, or discontinued sales on ecommerce sites. In
particular, after the criticisms made against Alibaba, it seems that Amazon is now making the headlines.
Let’s have a quick look at what has happened over the
past few months.
Court
actions
First, there have been legal proceedings being brought
by trade mark owners, claiming a direct responsibility of Amazon in the
sale of counterfeits or invoking a right to prevent sales on such platform.
An example of the former is the lawsuit
filed by Daimler against Amazon in late 2017 in the US District Court for the
Western District of Washington at Seattle. The well-known German car manufacturer argues that Amazon is
directly responsible for the “offer for sale,
sale and distribution of wheels which blatantly copy issued design patents in
various distinctive and artistic wheel designs owned by Daimler” under the Lanham
Act (§ 1051 ff), the US
Patent Act (§ 1 ff), and Washington State statutory and common law.
As explained on Forbes here,
this is not the first time that a trade mark owner is seeking to have the direct
liability of Amazon established. However, back in 2015 a 9-member jury in the
same court that has now been asked to rule on the lawsuit filed by Daimler held
that Amazon was not liable for the sale of counterfeit Milo & Gabby (now JoliMoli) animal-shaped pillows.
If the case brought by Daimler ended
with a finding of liability for Amazon, that would likely have a significant impact on the liability of platforms allowing third-party
listings, and set a different approach to platform liability in the US.
As readers knows, the particular issues surrounding
platform liability have been at the centre of attention also in Europe.
Reference in the online trade mark realm goes instinctively to the landmark
decision of the Court of Justice of the European Union (CJEU) in eBay, C-324/09, in which the highest EU court clarified that the safe harbour for hosting providers within Article 14 of the E-Commerce
Directive does not apply to “an information society service [which is]
aware of facts or circumstances on the basis of which a diligent economic
operator should have identified the illegality in question and acted in
accordance with Article 14(1)(b) of Directive 2000/31.” [para 120]
More recently, the CJEU appears to have pushed the
liability of platforms even further than the realm of safe harbours (hence,
scenarios of secondary liability) by holding that a platform may be even
directly (primarily) liable for third-party infringements. It has done so in the
copyright context, especially in the recent Filmspeler decision [Katposts here] and – even more
clearly – in the Ziggo ruling [Katposts here].
If we remain in the EU context, the issue of platform
liability is not the only aspect that has been touched upon in relation to
ecommerce platforms. Readers will in fact remember the recent judgment
in Coty Prestige, C-230/16 [here],
in which the CJEU tackled the compatibility with EU competition rules of
selective distribution agreements for luxury brands, including clauses that
would prevent resellers from distributing branded products via Amazon. The CJEU provided an interpretation of
relevant EU provisions that allows – at certain conditions – trade mark holders
from preventing distribution of their goods via platforms of this kind.
Have you bought your KatBirki's yet? |
Discontinued sales
In parallel with court
actions, other brands have recently announced their intention to discontinue
sales on Amazon, over issues of counterfeiting and allegedly excessive
discounts.
In a timeframe of just a few weeks, this has been for
instance the case of Birkenstock and Italian publisher E/O, respectively.
Shoe producer Birkenstock announced
that as of 1 January 2018 it would terminate its business relations with Amazon,
on grounds that
“there have been a series of violations of the law on the Marketplace
platform operated by Amazon which the platform operator has failed to prevent
of its own accord. On a number of occasions, BIRKENSTOCK lodged a complaint
that counterfeit products of poor quality which infringed BIRKENSTOCK’s
trademark rights and misled the consumers regarding the origins of goods were
being made available on the platform.
Putting the issue of legal obligations aside, BIRKENSTOCK is of the
opinion that an integral part of a trusting business relationship is that, upon
being first notified as the operator of the Marketplace platform of such a
breach of the law, Amazon would, of its own accord, do everything within its
power to prevent this type of and similar infringements. To this day, no
binding statement has been made to the effect that no more counterfeit
BIRKENSTOCK products would be offered for sale through the platform.”
A couple of weeks ago also E/O [the Italian
publisher of Elena Ferrante’s books, amongst others] announced
that it would no longer sell on Amazon, on consideration that the discounts
requested by the ecommerce provider would be excessive. It is not the first time that a complaint
of this kind is made by the publishing industry.
What’s next?
In all this, what does the future hold?
On the one hand, it appears that brand owners' complaints may result in the adoption of new approaches towards responsibilization and liability of online platforms.
This could occur not just at the court level, but also by means of initiatives of policy- and law-makers. In Europe,
for instance, the issue of platform liability, notice-and-stay down
obligations (including filtering), as well improved enforcement tools are currently central items to the agenda of the EU Commission and legislature. In the first half of 2018 it
is expected that the Commission will unveil further legislative proposals in this
area, under the umbrella of its Digital Single Market Strategy.
On the other hand, platforms like Amazon
may not rely just on partnerships with brand owners or the making available third-party
offerings but, rather, increasingly invest on the making available of their own offerings.
In this sense, the trend in fashion seems to be already reality. As noted by The
Fashion Law, Amazon has in fact been working on and launched a number of
in-house collections that have been already finding success among consumers, “particularly
in light of the current retail environment, when brand loyalty is low,
consumers are overly price/value conscious, and branding is simply not as
significant a player as it used to be.”
In this sense, the general trend seems to be towards a configuration of platforms' activity as no longer - or just - passive hosts of third-party offerings but, rather, active providers of own offerings. What should the legal treatment of this evolving and evolved scenario be? While the functioning of the internet must be safeguarded [as was also recently stressed by the German Federal Court of Justice, here and here] the questions that lie ahead and require a response are whether new rules are needed, existing rules should be applied differently ... or what else?
Brands and ecommerce platforms: a tainted relationship?
Reviewed by Eleonora Rosati
on
Thursday, January 04, 2018
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